How many times did you hesitate before sending a sensitive document through gmail or IM? Israeli start up Confidela, created WatchDox, a SaaS platform for organizations to send documents securely, control and track who views, edits, prints or forwards them. VC Cafe asked CEO Moti Rafalin 10 questions about the document security, SaaS and lessons learned so far.
The interview and screenshots after the jump.
VC Cafe: How was the idea for WatchDox born?
Moti Rafalin: Working in business development and product management positions in various companies we’ve had incidents of potential clients or partners forwarding our specs and restricted design materials of our coming products to competitors. So we simply had a need for it.
We were looking for a light solution to these problems that could be implemented immediately and was easy to use. We couldn’t find any. All we found were cumbersome DRM products that were too costly and had too many limitations that didn’t fit external sharing (installations, passwords, heavy infrastructure). Then we started asking ourselves how big is this need and found that many people in organizations similar to ours (including people holding positions in management, marketing, sales, operations, product, project, finance, legal, HR, IT, etc) would use a product providing document protection, tracking, and control if and only if it were easy to use. Then we got to work…
VC Cafe: Long time ago, I used PGP encryption to protect emails. It was complicated and clumsy. How is WatchDox different?
Moti Rafalin: One important difference is that it would take you less time to utilize WatchDox than to read this answer. With WatchDox, it shouldn’t take you more than a minute to send your first document, and it won’t take your recipient more than a minute to view it. If you used PGP in the past I’m sure you’d appreciate the difference.
Let me elaborate on the differences though: first, WatchDox is not an email encryption product. It’s a document control, tracking and protection service. As a by-product it encrypts your attachment but that’s only a tiny piece of the value proposition, so it’s very different from PGP and other email encryption products. PGP and the likes help protect content that’s traveling from person A to person B. Once the content (email/attachment) got to person B, person A loses control over it. WatchDox protects the content even after it reached person B. The WatchDox user controls the content at all time, no matter where it is. Also, as I mentioned before, WatchDox doesn’t require any software installation (not on the sender’s and not even on the recipient’s side). It also doesn’t require any passwords (we leverage email authentication). We designed WatchDox to be as easy as possible to allow people to send documents in a protected manner within seconds, since we believe that “simplicity means more security”.
VC Cafe: Military and government services are big consumers of security products. Are your own systems secure enough for them?
Moti Rafalin: WatchDox today is one of the most secure SaaS services available as we employ multiple levels of security measures as well as encrypt the data at all times (click for our white paper). However, many military and government entities are very hesitant about using SaaS products and especially about storing data in the cloud. We do believe one can reach a very high level of security “in the cloud”, and that in the future through market education and based on our technology roadmap our service will be adopted by government and military organizations as well.
VC Cafe: Who would you consider as your closest competitors?
Moti Rafalin: What’s nice about WatchDox is that it has almost unlimited applications. You can view it as a classic DRM solution (although it is a lot more than that) and in that case the classic giants like EMC, Oracle, Microsoft and Adobe are potential competitors. You can look at WatchDox as a much more secure and easy-to-use Virtual Data Room and in that case companies like Intralinks are competitors. You can also look at WatchDox as an extension to email systems by providing tracking, protection and control for attachments in which case there are competitors like Voltage.
VC Cafe: What industry trends are you riding on?
Moti Rafalin: The major trend we’re riding is the migration to SaaS and cloud-based services and specifically SaaS security services – those have been talked about a lot. There is also a global business trend we’re riding – that’s the fact that companies need to share confidential information with external partners, suppliers, outsourcers and customers more than ever before. Thomas Friedman coined the term “The World is flat”. WatchDox helps facilitate business in a flat world.
VC Cafe: What is your target market?
Moti Rafalin: We’ve seen several vertical markets in which we have been getting initial traction such as Semiconductor/IP companies that need to share their confidential specs with suppliers or partners; financial services, where funds or investment banks need to share confidential reports internally or with customers and have heavy regulation to adhere to; Or manufacturing companies that need to share their design documents with outsourcers. There are also horizontal markets such as marketing professionals who need to share competitive analysis or price lists with their channels, sales people who need to send quotes, roadmaps or RFP responses with customers and any business development or corporate development professional who needs to share materials with potential partners or acquisition targets and be able to protect or in some cases revoke access to if the relationship doesn’t materialize. And of course entrepreneurs who need to share business plans with investors, partners or potential employees could use WatchDox.
VC Cafe: What are the biggest challenges for WatchDox in 2009?
Moti Rafalin: We’ve just launched the first version of our WatchDox service. The challenge now is building the sales and marketing machine, which we have started doing.
VC Cafe: Are you raising capital? How did you fund the development so far?
Moti Rafalin: Currently we’re not raising capital. We raised our first round from Shlomo Kramer, co-founder of Check Point, and Gemini Israel Funds in July 2008.
VC Cafe: You had an interesting challenge with your product name. Can you share with the readers of VC Cafe?
Moti Rafalin: Our company name is Confidela and initially the product was named the same. It turned out that although many people liked the name (it also conveyed something about confidentiality which is what the product helps protect) it was hard for people to pronounce and remember, especially in the US. That’s why we decided to name the service WatchDox – we believe that’s easier to remember and pronounce, while at the same time it tells you something about the service. I’m happy to say we have been receiving very good feedback on the new name.
VC Cafe: Finally, looking back to the time you started – what would you do differently now?
Moti Rafalin: I would have started Confidela earlier…
Watchdox was selected as one of the top most promising Israeli start ups in the recent TWS2009 event in Tel Aviv. I’ll keep an eye on this one.