Out of the elevator on the seventh floor, a busy scene unfolds. Wide-open office doors, removal men, boxes scattered across the space, a group of 20-somethings making their way around. The noise of cardboard against the tile floor is muffled by the rushed footsteps of a young man. He greets me; I step in. Once inside, I stand before a stunning panoramic view over the Danube.
This is central Budapest, just down from the National theatre, and south of the city centre – the office of Hungarian startup Tresorit.
“Our staff has doubled to 27 full-time employees in just six months, hence the office relocation,” Szabolcs Nagy, CMO of Tresorit tells me. The conversation is soon joined by co-founders Szilveszter Szebeni (CTO) and Istvan Lam (CEO) – two of the 20-somethings buzzing around the office.
Tresorit is a year and a half old, a startup with an innovative security product, most often described as a combination between Dropbox and Truecrypt. It was officially launched in April 2013, just before the NSA Snowden scandal broke in the US. At that time the team was offering 10.000 euros to anyone who could hack their servers. To date nobody has been able to defeat the security.
“We don’t like to think of ourselves as a data storage company unlike some of our key competitors who are data storage providers that have just bolted on security,” says Szilveszter. “We position ourselves as a security company first.” Indeed, Tresorit was designed from the ground up to be totally secure – even they cannot decrypt the files uploaded by users.
Tresorit’s office Photo credit: TresoritIt started as a hobby
“I’m a techie, a computer engineer, and I was bored,” says Istvan. He was not only working while studying at Budapest University of Technology and Economics (BME), but was also teaching and giving lectures in several different academic departments there. “I’m always in a rush,” he says. “If I waste an hour, then that’s a waste of my life. I need to do something useful, real; something that drives me. I try to find a goal to dedicate myself to.”
It was in the pursuit of a more engaging activity that led Istvan to embark on a two-year research project with his co-founder Szilveszter. The cryptographic technology they researched at the BME was named “ICE” and later patented. With the help of ICE, any number of users can securely share data among themselves. It was partly the drive to commercialise this sharing technology that led to the creation of Tresorit. The project has won several local awards for the technology researched, and was among the six Best Cloud Security Solutions for 2012, as named by the UP Cloud Awards.
Perhaps surprisingly, though, the team did not attend many startup events in Budapest or elsewhere, since it was “just too time consuming”. This is not to say Istvan and Silveszter did not need help in raising the funding necessary to realise the project. “The problem was that we were techies and we didn’t know much about business.”
Two techies and a businessman
CFO Gyorgy Szilagyi at an IT conference Photo credit: http://on.fb.me/1hnYHDMRealising that their business knowledge was lacking, Istvan approached a friend – Gyorgy Szilagyi, who came onboard the new company as CFO (although today he assumes the position of the COO). Gyorgy’s forte – business and finance. It was with his help that Tresorit obtained the funding they needed, the key to which was a comprehensive business plan and establishing close connections with investors.
In the summer of 2012, the team secured an investment the size of 1,7 million dollars from Budapest-based private equity and venture capital firm Euroventures. What’s more, several private investors came onboard the company, including Andreas Kemi, co-founder of UCMS Group EMEA, a business process outsourcing company, as well as Marton Szoke, founder and CEO of IndexTools Inc., sold to Yahoo in 2008 for an undisclosed sum.
Yet, getting investors on the board of directors meant getting ready to compromise. “They wanted [us] to include other features that weakened security,” says Istvan. “For example there is no password recovery in Tresorit,” a fact that surely reconfirms their policy that security comes first. “We needed to listen [to their advice] but drive the business at the same time, and that was hard.” It’s about finding the right balance, he says, and knowing when to strike it.
Deciding what features to include in the release product, what should be in the minimum viable product and how long to wait before the release was sure not easy. Yet it doesn’t seem to all be about precise planning, as chance seems to have been on their side. Launching the beta version in April turned out a good call, since it coincided with the Snowden NSA scandal. The Tresorit team got to market just in time to “ride that wave”.
PR on a silver plate
Photo credit: http://on.fb.me/1f0lOlCAs a result of the good timing of their launch, the team did very little PR work. At the moment, Tresorit have (an undisclosed) number of early adopters, mostly from the markets directly affected by the NSA scandal, the US and the UK, but also with many coming from diverse markets like India, Israel, and Australia.
Since April 2013, the startup has released a Mac OS version, an iOS and most recently one for Android. These were the key demands from early adopters and critics of Tresorit. The product is still in the “proving ground” stage. The next step is to create focused business software, and provide “protection for your files wherever they may be” – features soon to be released.
In today’s digital day and age, many realise that their data are not always as secure as they’d like them to be, so it’s probably safe to say that Tresorit will be around for a while. Because no one likes to be spied on.