Maty Siman has been in the same business for 30 years, and he loves every minute. He is not over 50 years old, however, or even over 40. The founder and CTO of Checkmarx, one of Israel's most promising cyber security companies, got his first computer when he was only seven, and has loved the machine that changed his life ever since.
As first reported by "Globe" early this month, Checkmarx is preparing for a Nasdaq IPO this year, and therefore appointed Shmuel Arvatz as CFO. Arvatz was previously CFO of Allot Communications Ltd. (Nasdaq:ALLT; TASE: ALLT), whose market cap is $175 million, and of ClickSoftware, sold for $438 million.
The Checkmarx IPO is likely to end a drought in Israeli high-tech IPOs on Wall Street. The last Israeli high-tech Wall Street IPO was in April 2015.
"Globes": Do you have any idea of what you are getting into? You will now be judged every day by your share price.
Siman: "I know. I've heard and read about this, but I'm not worried. There are other things that worry me."
You're in good company. It will be the fourth IPO by an Israeli cyber security company, after Check Point Software Technologies Ltd. (Nasdaq: CHKP), Imperva Inc. (NYSE: IMPV), and CyberArk Software Inc.(Nasdaq:CYBR).
"That's really heavy. I have a warm place in my heart for all the cyber security entrepreneurs in Israel."
When he was seven and in first grade, Siman was given his first computer for his birthday, and his eyes still sparkle when he talks about it.
"My parents heard about this thing called a computer, and it looked important to them. They didn't come from a technological background and didn't understand computers, so my mother stayed awake at night to learn how to operate it from manuals, so that she could teach me. I didn't know how to read and write yet. When I got home from school, she taught me."
What drove her to do this? Was she afraid you would not get the right training at school?
"To tell the truth, I never asked her this question, and maybe I should. My parents had to take a loan to pay for the purchase. A computer was expensive then. I remember to this day the trip to the store in the Dizengoff Center in Tel Aviv, and the cardboard box in which the computer was packed. We had a neighbor three or four years older than me who was a computer geek. Maybe he made them realize that I should learn it. He became my private teacher after my mother stopped teaching me. I studied with him once or twice a week for four or five years, and I sat and practiced on the computer by myself every day after school."
So you have your mother to thank.
"Right, and I say it almost every day."
Is your mother involved with computers now?
"Yes, you could say that she likes gadgets. She always wants her technology to be the most advanced, such as the latest iPhone, and when she has a problem at home, she engineers it by herself. Maybe she wanted the computer she bought me more for herself (laughs)."
Siman remembers well the moment when he wrote his first code.
"I was seven, just after they bought me the computer, during the Passover holiday."
Explain to me what it means to write code at age seven.
"It wasn't exactly programming. I had a neighbor I wanted to help fill in a lottery form. He had regular numbers, and he wanted to optimize, in other words to fill out the forms in the best way and at the lowest cost. He told me his numbers, and I calculated for him how many forms he would have to fill out in order to save so and so many shekels. He was delighted."
What did that do for you?
"I thought it was wonderful! To create something out of nothing, like a picture on a blank piece of paper."
Did you work as a paid programmer before you were drafted into the army?
"Yes, when I was 15. I wanted money, but not because I lacked things at home. I didn't have to work.
How much did you earn?
"Much more than my friends who worked in a canning factory."
Your daughters are age seven and four. Are you pushing them to write code?
"Not to write code, but how to think logically, in an organized way. It's important to me that they should learn arithmetic and mathematics, because that's an advantage, and it's forever. It's important to me that they shouldn't be afraid of numbers."
And if one of them wants to be an actress or a model?
"I'll be very glad. A model isn't as good as an actress."
While we are on the subject, as someone who has followed the path of the IDF cyber units and worked in thecivil service, what did you learn about the interface between the public and private sector, and the need for education in cyber and technology in general?
"I didn't know information security before I went in the army. I studied this subject from A to Z only because of the army. In the room next to mine were Amichai Shulman and Mickey Boodaei, the founders of Imperva (along with Shlomo Kramer, T.T.). They were the ones who taught me, and you could say that I learned from the best. I didn't have another opportunity."
What do you conclude from this?
"That the state should think how to give every seven year-old child a computer. My parents may have been ahead of their time, and I still have to teach my daughters about computers. The state should provide programming lessons in first grade, because programming is like a language - it's easiest to learn when you are six, seven, or eight years old. There's no reason why the state can't do this, especially in outlying areas."
At this point, Siman explains that his parents were not focused on his marks.
"The grade as a number was not important. The important thing was to learn, and if I got a low grade, it was because the teacher didn't know how to test me correctly, not because I didn't study well for the test."
Wait a minute - it's always the teacher's fault?
"We had a slogan at home, 'The teacher is wrong,' and my parents got along fine with it. It was usually right… (laughs)."
And outside school? The other person is always wrong, and I'm the one who's all right?
"No. It's simply that in school, I knew the material, but the question wasn't always worded properly."
Checkmarx has 310 employees ("as of this moment, but it's possible that by tonight, the number will increase. We're hiring all the time"), 200 of whom are in Israel.
"It's not easy to recruit good programmers," Siman says. "It's important to me that money should not be important to someone who wants to work here. If someone wants to work here just because he'll get NIS 1,000 more here than somewhere else, I don't want him. Checkmarx has people who have worked in the company since it was founded 11 years ago, who were hired at a time when we really couldn't be competitive in salary. These are people for whom working in the company is important because it's in the forefront of technology. That's the kind of people I want."
How do you figure that out in a hiring interview?
You give the candidate all sorts of tests, ask all sorts of questions, and check whether their answers are just to fulfill the requirements, or whether they really understands the technology, how much it has changed, and where it's going, in other words, answers that are correct for right now, not five years ago."
Would you import programmers from overseas?
"I see no great advantage in doing that. I'm a Zionist, but if I find someone in another country who is talented, I'll employ him in that country."
The difficulty in hiring good programmers, and maybe even excellent ones, and the difference in academic education in cyber professions between Israel and other countries can be deduced to some extent from the story behind the founding of Checkmarx's R&D center in Portugal. It has about 20 people, and they are "excellent," according to Siman.
How did you get to Portugal?
"We put an ad on the Rent A Coder website (one of the leading websites for recruiting freelance programmers, T.T.). We described our project, and Daniella, a Portuguese girl, answered it, and said that she was studying at one of the country's universities, and that it was full of students who could do these projects. They were temporary workers at first. Only later did we found a subsidiary in Portugal, and there are 20 people in this development center, compared with 10 a year ago. They're very satisfied! These are people from the code analysis group, in other words, the spearhead of our business. There are courses like this in Israel, but there's no specialty in it."
18 months ago, the company completed an $84 million financing round, including a sizeable offer for sale. The new and existing shares were bought by the Insight private equity fund, which became the biggest shareholder in the company, and will be the biggest beneficiary of the planned IPO. Checkmarx has raised almost no venture capital. The company grew up within Ofer High Tech's (now XT Investments) Naiot incubator. Checkmarx's first investor outside of Israel was the corporate venture capital arm of US cloud computing company Salesforce.com. The company later raised a little money from the K1 venture capital fund, and that was the end of it. No other venture capital was raised.
Why did you bring in private equity in the last financing round, not venture capital?
"I want to keep the company as independent as possible for as long as possible. The Insight fund gave us two things: we were able to remain independent, and to compensate some of the early employees in the company in the framework of an offer for sale."
Are you selling shares? For how much?
"Enough so that I can work at Checkmarx because I enjoy it, not because I have to."
You mentioned the company's independence. Are you hinting that venture capital funds interfere too much in daily management?
"I'd rather you ask (CEO) Emmanuel (Benzaquen) that question. I'll merely say that the board of directors makes all of its decisions unanimously."
Benzaquen claimed that a lot of people in the the venture capital industry have their nose in the air, but entrepreneurs also have pretty big egos."
"Right, and I think I've got a little, too."
You gave up the CEO post a little less than a year after founding the company, and recruited Benazaquen. How did you realize so quickly that he was suitable for you?
"Every person has to know what he's good at, and when he's good, he has to be really good. When he's not, he has to bring in someone else."
What specifically in management does not suit you?
"Management. I try to manage as little as possible. It's hard for me to be tough with people, and a manager has to be tough sometimes."
There is pessimism about the future of Israeli high tech. The supply of suitable personnel is low, and other countries are breathing down our necks. Do you agree?
"The world is very, very flat, and the best person in his field is the one who will work. If the programmers in Israel aren't better than the programmers somewhere else, then yes, Israel will lose its leading position. The competition for brains isn't in the local market, Checkpoint versus Checkmarx, for example; it's Checkmarx and/or Check Point against Microsoft in Seattle USA."
What gets you angry?
"A lack of professionalism. When someone says that he's good at something, and he really isn't. I don't run into it much at Checkmarx, because I don't select people like that. This company has DNA that was built from its first day - the DNA of professionalism. A lot of good things have happened at Checkmarx over the years, and we may have had some good luck. I believe in the slogan, 'The harder I work, the luckier I get.' For example, when Salesforce.com invested in the company, I think we had a little luck, and when I hired the first employee at the company, I had a little luck."
The first employee was chief software architect Dr. Alex Roichman, who sits in the room next to Siman's, and lead a 12-person team that is the creme de la creme.
"It was a Wednesday morning," Siman recalls the moment when he recruited Roichman to the company. "Alex asked me where we were meeting on Sunday, and I answered, 'I don't know, because I haven't got a lease yet. Somewhere between Rishon Lezion and Netanya.' We eventually rented a small office on La Guardia Street in Tel Aviv, where there are a lot of garages. I didn't even have a laptop to give him. I don't go far away from Alex. We've been together for 10 years already, and I see him more than my wife."
Are you saying that meeting him was lucky?
"Perhaps. What are the chances of meeting someone with that much talent on the first day? On the other hand, I interviewed a lot of people before I hired him, and that's why I say, 'The harder I work, the luckier I get.' In general, there are a lot of people here I would be glad to have in my next startup."
Does that mean that you are already thinking about the next startup?
"I have all sorts of ideas from various software sectors. Right now, though, the work is very interesting to me, because I'm doing things I've never done before. It's as if I'm at the same job, but constantly changing jobs. For example, part of my job is to look for companies to acquire, both Israeli and foreign ones, because we can afford it now."
So you're not in Checkmarx for life?
"As long as it interests me and the company is going forward, I'll be with it."
Doesn't starting over again make you anxious?
"No, because my position will be different this time. I'll have a reputation."
Published by Globes [online], Israel Business News - www.globes-online.com - on January 19, 2017
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