Conversation with Neil Furukawa
Good day, this is Ken Forster with episode 94 of our Digital Leadership Podcast Series. Today I’m pleased to have Neil Furukawa, CEO of AKUA, one of our Momenta Ventures Portfolio companies. Neil’s an accomplished operating executive with over 25 years of cyber security expertise, solving hard problems in government, defense, and commercial markets. Neil’s expertise is in the creation of early stage technology startups through rapid growth.
Prior to founding AKUA, Neil spent five years as the Chief Operating Officer at CyberPoint International, from startup to over 150 employees, and $60+ million in revenue. Prior to CyberPoint Neil spent six years as Executive Vice President, and CTO of Savi Networks that was an early innovator in IoT and supply chain software as a service platform, and 8 years as a General Manager Director at Lockheed Martin Cyber Security Innovation Group.
Neil is a Bachelor of Science, Electrical Engineering Degree from the University of Hawaii, and completed the Executive Management Programme at the University of Maryland, Robert H School of Business.
Today I’ve asked Neil to focus on three things,
- His own digital industry journey, and some very rich companies in that.
- As a practitioner around communications, InfoSec, and of course supply chain.
- A leader, a startup or serial entrepreneur if you will, and CEO of AKUA.
Neil, welcome to our podcast.
Thank you, Ken, I’m happy to be here and happy to be working with Momenta.
And we are happy to have you as part of our portfolio. I know we worked long and hard to get this into the portfolio, and I’m really happy that we’ve done so.
So, your digital industry journey is really quite rich, from being an engineer, and we love engineers at Momenta, to a Cyber Security practitioner, to supply chain startup CEO. What were the key inspirations, decisions, and opportunities that led you down that path?
My first real job while I was still going to the University of Hawaii getting my Bachelor’s degree in electrical engineering, was I joined very early stage startup in Honolulu called Verifone. Verifone is a pretty well-known company today, they build these credit card point-of-sells terminal devices in stores. When I was there, it was pretty early stage, there still wasn’t even 10 employees at the company, and I remember we all had a really great time, almost like a big family all focused together on delivering a product that would make a huge different in the role.
I enjoyed that feeling of directly contributing hands-on, basically doing everything from designing circuit boards, to writing code, to emptying trash cans, and it was that company that actually brought me to California when they ended up expanding. Being in California a few years I had this great idea of returning back to Hawaii and continuing doing my electrical engineering work, so I decided to join a telecommunications company called GTE, which was the parent company of Hawaiian Telephone Company at that time. It was at GTE I started getting involved in the early days of what they called information security and intelligence. The term cybersecurity was not even used back then.
From there I got recruited by Lockheed Martin in early 2000 to start up their information assurance directorate, which was really the early start of cyber security, and then I lleft Savi in 2006 as part of a mergers and acquisitions activity, and I joined Savi working directly as Chief Technology Officer. One of my jobs at Savi, because I really enjoyed touching hardware, I’m a hardware geek at heart, was to transition Savi from the RFID the hardware company to a full managed service company, which is where Lockheed wanted them to be. That’s where I really realized that supply chain logistics was very starved of real-time data, because we started trying to sell into theat market.
That challenge of 15 years ago was that technology was not quite ready for a mass deployment, not ready for Internet of Things, so I left Savi in 2010 and joined a new cyber security startup called CyberPoint as their Chief Operating Officer, and as I mentioned earlier we built that company to about 150+ employees in five years, and that’s when I realized I really enjoyed dealing in companies from the ground up. That’s what led me to where I am today, deciding to start a new company called AKUA.
Very good. A pattern we see amongst the digital industry practitioners, many of which are founders of our portfolio companies, is this kind of move up the technology stack, usually starting off maybe I’m in semiconductor, I’m doing hardware, I’m doing software, I’m doing platforms, and I love the way you just bridged that over to, ‘And then I start building companies’. In some sense this a kind of a systems approach, which is how I’ve always viewed myself, I can do hardware, I can do software, but even when I think about investing in companies it’s about a system of systems. So, it’s interesting to see the common trend, I certainly see it in you.
I love the fact that you were involved in what you call information security, very early, and before it was certainly as you say branded cybersecurity. You and I share a common DNA in that we both spent time at Lockheed there in the Bay area. Tell me a bit about what really inspired you to move to Lockheed, but more importantly to focus on information security, and I guess some of the inspirations that came out at that time.
During my time at GTE I started to really start seeing that the internet and computer data security would emerge as a huge issue, more and more people were starting to use the internet and getting on computers to share data. Information assurance at that time was focused on creating a defensive posture, whilst the flipside of that was trying to turn that defensive technology into what we would call an offensive weapon, which is called hacking today. I found that all extremely challenging because nobody had the answers to that, and it could really open up a whole new market for businesses and research. The US government at the time were starting to heavily invest in companies, to build new cyber tools, so it was fun to get involved in all of that, and to try to build a company at the same time. I remembered all that, that’s why I ended up deciding to join CyberPoint back in the 2010 timeframe.
The move from Lockheed and the focus on information security, to Savi, and I’ll call it generally physical device security, and you may want to describe a little bit about the work Savi was doing at the time, but it’s an interesting one, what inspired that move?
Savi was a very early leader in what we call active RFID, and they were originally targeting the Department of Defense, especially during the Gulf War there was a lot of equipment being sent internationally and things were getting lost, they didn’t know when it was going to arrive. So Savi was very hardware focused, and I remember thinking back at Verifone I’d always missed that kind of machine to machine type of development. So, when I saw Savi as part of an M&A activity, I jumped at that chance and said, ‘Hey you know what, see this explosive growth’, at that time was cellular data technology. So, leveraging the Department of Defense and our connections there led me to try to join Savi, to try to develop a physical security device around physical security, meaning trying to protect your shipments in transit, that also took leverage to new emerging cellular data technologies that were coming out. At the time 3G was brand new, and then migrated to 4G, and now we’re heading towards 5G.
Savi is an interesting one, as you said they were an early leader in active RFID and of course I was heavily involved in MITs auto ID initiative way back when, and so Savi was always the poster child for RFID. For the listening audience, passive RFID would send a radio wave to a device and it will power-up using that energy and send you back information. Active is think about a power device that is constantly sending you information about a device. It was an interesting early test case to have.
So, in transparency our Talent practice has placed the new CEO of Savi, this is post the exit from Lockheed, we placed that CEO back in 2017 so we again got very close to the business as part of that executive search placement. Tell me, what was some of your key learnings there as CTO in this very early phase for them.
When I joined Savi, and working with Vikram, we had a really great vision at that time, we wanted to write ubiquitous coverage of a certain asset tracking data, but what I quickly realized when we started trying to develop products was that technology was not quite ready at such a ubiquitous level, meaning global. At that time trying to use active RFID as you mentioned, it required a reader infrastructure, meaning that you need a reader to be able to communicate with these active RFID devices. So, we ended up getting well-funded to do that, but it proved extremely costly to try to deploy a global commercial active RFID infrastructure. Not only deploying it but trying to maintain it became a huge cost.
So once we learned what that was, one of the lessons learned is you really need to take a look at the lifecycle of what you’re trying to do, and if it the financials don’t work out, then you really need to try to take better advantage of what is existing in the marketplace today. In our case at that time it was global cellular, so the telecommunication companies were maintaining and investing in those networks, so we ended up trying to pivot off of active RFIF into more of a cellular based network.
The lessons learnt there, especially in the passive RFID side were even more heavyweight in that regard, because reading infrastructure was needed simply to power up the devices. So, a lot of the great use cases, many may remember that Gillette razorblades going through Walmart use cases that all the industry was talking about, but it required a very heavy reading infrastructure in there. So, you’re absolutely right that moving to cellular and now probably more low-power wide-area networks is helping to revive some of those same use cases from way back when, but to do it… in some sense you can say Moore’s law, and perhaps even Metcalfe’s law has now caught up to the promise of what passive and active RFID were going to do.
What I love is, all of this has converged now at AKUA, your software experience, your hardware experience, and certainly your business building experience. So, tell us a little bit about AKUA and the problem that you’re trying to solve, and why.
Back around 2015 when I was still at CyberPoint, IoT was starting to gain a lot of traction, so I started to look at how cybersecurity could be applied to the IoT problems, and again also which markets may see an early adoption of our IoT. It was a fun buzzword, and it was fun playing around with these little devices and sensors, but really where was the market adoption going to be. The smart home market was starting to take off, but I remembered again my experiences at Savi and believed that supply chain logistics being that it was very starved for data, could become an early adopter for IoT; he very clean use case, as long as you could get the financials to work out.
I initially tried to approach some of the more traditional track and trace companies to sell them on this idea that cybersecurity would become a huge problem, and you would needed to provide some level of protection in an integrated cloud platform type of architecture, but there was very little interest frankly, especially in the commercial space because people weren’t thinking about security, they were just thinking about the data. So again, going back through my Lockheed experience, and my experiences and history with the government as a customer. I had a few contacts in the Department of Homeland Security that I knew from the past, so I gave them a call, had a meeting, and I presented them my idea of this type of gateway architecture to provide security of the data, of the IoT data, and they said, ‘Neil, we really see this as being applicable in our minds for cross-border security’, meaning for shipments being imported and exported out of the US.
So, I started seeing a shift, there was some activity in the government really pushing supply chain security, chain of custody if you read the news, so then I decided that was the time. I think now is the right time in where technology is ready, the market is ready, there’s enough concern around security to truly focus on a secure IoT data platform, integration platform with an edge architecture approach. That’s what we ended up using as the vision and basis of forming AKUA. So, ended up spinning AKUA out from CyberPoint with a handful of individuals that wanted to join me, and we ended up doing a prototype, getting some financing, and here we are today.
You may want to talk a little bit about the AKUA solution, because it is a full stack solution, as you say from edge all the way up to cloud, and I think it’s pretty unique in the way you guys have architected. I remember some of the early pitch meetings we had where you would bring this edge lock device, and so maybe you could say a little bit more about that for the audience.
Part of our architect is edge architecture, and the whole premise is that the cloud platform, the analytics platform, truly wants to be device agnostic. That really was one of the early reasons I believe why the track and trace players who used to be device focused, and did the stovepipe architecture where they try to sell the devices to you, and you have to use their platform to communicate with the devices, was not ubiquitously adopted, it’s because you would lock companies into a certain technology.
With the AKUA products, the actual platform itself is device agnostic, However, when you look at these IoT sensors that’s coming out in the marketplace, you want the sensors themselves to be very commodity, low cost, easy to use, so a lot of the processing power it wants to be placed into a kind of a gateway architecture. So, what we decided was for supply chain logistics in shipping, the best way to do that is to build an electronic seal, that is an ISO 17712 equivalent, meaning that customs organizations are on their own who mandate the use of a high security bolt seal on containerized shipments would recognize this electronic version of it, because they would have to use it anyway. And by the way, it’s also an IoT gateway, so it could recognize any sort of new protocols in a software approach that’s in the shipments themselves, and collect that data, encrypt that data, and send the security back to our cloud platform. So, that’s the kind of premise of our high-level architecture that we adopted in AKUA.
I really love the gateway concept in there, especially because we’ve continued to do a lot of work in, I’ll say disposable tag, track, and trace, a company called NanoThings, a you well know where they effectively do one-way tracking of pallets as an example. The beauty of something like that is, the gateway you’ve got can read the information those devices are sending themselves, and then relay it back as part of the inner model container, and so it’s a pretty unique architecture.
You referred to AKUA as a secure DAS, or data as a service platform; how do you differentiate this from just track and trace? Is this a great new marketing name, or does it represent something really unique?
Yes, it does represent something unique. As I mentioned earlier, we view traditional track and trace product vendors as primarily focused on selling their telematics devices, and the analytics platform is typically tied in a proprietary protocol manner to their hardware. When we designed AKUATrack as an IoT data analytics platform, we truly decided to make it device agnostic. The data itself can be used by multiple players, so when we collect all this data, it’s kind of a big data repository, that same data could be used by the benefit of cargo owners for example, to determine when somebody purchases something, when it’s going to arrive, what condition it’s in if we have sensors to detect that. That same data could be used by the transport carriers to basically do much more accurate ETA for example, than what they’re getting today with EDI and part data.
Then, that same data could be used by insurance companies for example for loss claims. If there is an issue that’s happening with a shipment, today it basically is paying an out based on product value, but if you have additional data one could do some analytics to see where the potential damage could have occurred, so they could assign the loss to certain companies that were handling the shipment for example. Ports and terminal might want to see that same data to look at delays, and compare efficiencies between transit delays, between their ports and other ports for competitive reasons. Even the US government will want to see that data, for example for imports coming in if there was some funky things happening with that shipment, like the container was open in an area where it’s not supposed to have been opened, the US Customer Border Protection might want to do inspections on that container, via the risk data rather than random inspections like they do today.
So, the whole key around AKUA, an AKUATrack, is that we have this data, people can pull that data, and we can sell that data many times over for whole different reasons. It all comes down to the analytics that we can do on that data. So, that’s why I really view what we’re doing is not a traditional track and trace, but it’s a whole new business model around leveraging IoT to the supply chain and logistics market.
Very good. Knowing that one of your key clients is the US Government, as you know we’ve taken this view that the current COVID pandemic, which I think we’re probably in week 11 or 12 depending on who’s counting, has been an accelerator for a lot of our portfolio companies and their digital technologies, mainly because it allows effectively a remote touch of these things. What impact will this current COVID crisis have on supply chain in general, and probably AKUA in particular?
One of the things that we’ve seen that the COVID-19 crisis has exposed is really the severe weakness in the global supply chain. For example, we’ve talked to some government customers who are handling segments of personal protection equipment, like N95 masks and things like that. What they’re telling us is that a lot of these shipments are getting redirected by the carriers because they’re changing booking schedules. A lot of it is frankly getting misplaced, and then the rival clients are also unknown. So, really what we’re hearing at a high level is that once the shipment leaves manufacturers, it enters what they call a black hole. People are guessing what’s going on with the shipment, but it’s hard to do real-time planning around that.
So, what we’re actually seeing is, both the DoD and the DHS in particular have recently come out and did a big call for ideas and products around digital logistics, so if you go to the SBR website there’s multiple SBRs open today on specifically just that. So, we’ve been keeping very busy over the last 30 days writing white papers, putting together our quotes to all these SBRs, so what we’re hoping is we will turn those into book contracts here shortly. I hate to take advantage of a crisis, but it’s been keeping us very busy here over the last two months.
And you’re not alone in that; as you may remember we had some early roundtable discussions with the CEOs of all of our portfolio companies at the beginning of this, comparing best practices and really just benchmarking one another. One of the early observations that came out is that business was actually ticking up both because in many cases companies were being considered to be critical infrastructure, i.e. ‘I can’t go out and send this person to maintain this compressor in the field anymore, I need to wait to remotely access it’. Second, purchasing agents in many cases were at home, and thus available! And third, what we were seeing is that a lot of corporate funding was being moved dramatically from normal operating costs to IT, mainly to support of course the newly remote workers. As a result of that we were seeing OT pick-up as well.
So, in some sense what you’re seeing is what most of our portfolio companies are seeing, and thus in some sense there is a new normal coming out of this. Technology adoption is driven by behavior change, and unfortunately pandemics in a negative way create rapid and holistic behavior change, so not surprising.
Let me ask you to switch back here and think about your own entrepreneurial experience, of course we have a lot of aspiring entrepreneurs that listen to these podcasts; what would your advice be to them in terms of what’s made you successful?
I’ve talked to a lot of our early entrepreneurs, and sometimes I hear comments like, ‘Yeah, it’s better to do this, because maybe we can make a lot of money’, and one of the first things I always mention to them is, entrepreneurs embarking on a startup purely for financial reason is not the right reason. You really need to have this genuine passion to do something that will be beneficial, and you have this ‘all chips in’ mentality. A tenacity about it that kind of drives your everyday actions, I sleep, I dream about it all the time. And really most important from experiences it becomes your whole life, being an entrepreneur is really like a lifestyle. So, you really need to have the buy-in, it’s only fair to your families, to your employees who are putting trust in you that you’re doing something great here, you have the ability to do our vision.
Secondly, we owe it to ourselves because we’re really getting into this, we’re not second guessing ourselves, we have this belief that drives us forward. What’s really important in doing a startup for an entrepreneur is you really have to have a clear vision, a really clear vision that’s always pointing you in the right direction. You can pivot around it, but the vision has to be clear, it has to be clear to everybody that’s involved, your investors, your employees especially, because you want to push towards that vision in every action that you’re doing in the company.
So, that’s kind of my advice that I always give folks, is that it becomes an all-encompassing activity going forward.
A recent podcast guest said, ‘You have to have a higher calling’, and certainly your passion and love for cybersecurity and supply chain, how all this converges has certainly been a higher calling. And again, one of the key reasons beyond your deep DNA as a practitioner that we invested in your guys earlier was, you were always passionate from the earliest conversations, and it felt like it really was a lifestyle for you.
In closing up the conversations I always like to ask two questions; What startups do you see as the ones to watch? And two, what inspires you? So, what startups are you seeing out there? Obviously, Momenta Ventures likes to invest in such startups, but what have you seen as the ones to watch?
Its interesting, there’s two areas I think are going to be critical to the success of IoT and supply chains. One is the continuing technology investment and product development around what we had mentioned earlier, low-cost disposable sensors, because that’s really what the market is trying to achieve. You mentioned earlier you’ve got investment in a company called NanoThings, they’re doing a really great job, they’re focusing on perishables and the environment in the sensors area, so that’s one company. I’ve forgotten what some of the other companies are, but we are trying to find similar companies that do similar sensors around, for example, shock detection, maybe chemical sniffing, and things like that. So, any companies around that is very interesting.
The other area is on the network side, and I think cellular networks have their limitations too sometimes, and what’s really exciting for me, especially being back from my Lockheed days is these new next generation satellite constellation communication technologies that’s coming out. I think Fleet Space is one that I think Momenta is invested in, Swarm that recently has come out of the news, I think these satellite nano-sats, micro-sats, that are focusing specifically on low raid data, ubiquitous data coverage rather than broadband, is what’s going to make this whole market really interesting in the future.
And we couldn’t agree with you more, and if the listening audience is wondering, no I didn’t pay Neil to recommend two of our portfolio companies! But it does end up we’ve actually created a bit of an ecosystem play specifically between NanoThings, Fleet Space and AKUA. We like to do that because I couldn’t agree more, the combination of those technologies and the solutions and market traction that AKUA has, could create some real killer applications in that regard.
Final question, what inspires you? Famous speakers, good books, resources etc. that you’d like to share with our listening audience?
In terms of books, there’s a book set that I read a number of years ago that kind of forms my guiding principles, and this is a making in leadership, it’s a book set called ‘Primal Leadership & Resonant Leadership’, what that book does is really studies and focuses on emotional intelligence of great leaders. I really feel that getting some of the specific tools around leadership is fine, what really separates great leaders from what a regular leader is truly the emotional intelligence side of it. To me, it’s all about the people, and trying to focus on the psychological side in self-awareness, and compassion really is what forms great companies. If you look at some of the great leaders out there, Steve Jobs, and things like that, you really see a difference in the way that their leadership styles are.
The second book is a bit different, this one always sticks in my mind, I actually met the individual. He was a speaker that I attended, and it’s a book called, ‘The Other Wes Moore’. Wes Moore is a gentleman that grew up in the Baltimore area, in a very low-income area, and he shares the exact same name and I think the same age as another Wes Moore, they grew up in the exact same area. But the difference is that as they grew up one became a successful banking executive, a decorated army veteran, and a successful entrepreneur, while the other Wes Moore spent his early life in crime and ended up getting incarcerated for life in prison for murder. What it studied was that they grew up in the same neighborhood, they had the same type of friends, but what really made the difference is what you believe in yourself.
I always remember that, they said as long as you believe in yourself and what you’re doing, you can always be successful. The minute you start second guessing and having doubts, is when things all fall apart. So, really what my message to everyone is trying to do, do startups and stuff, is that truly in the end you really have to look at yourself in the mirror and say, ‘I believe in myself, and I can do good in the role. I want to be a successful leader and entrepreneur’, and that’s pretty much what I do.
Excellent. Well, Neil it has been a great pleasure to have you on this podcast. This is long overdue, we talked about it for some time and I’m glad we were both able to find the time to do it.
This has been Neil Furukawa, CEO of AKUA, and if you don’t mind me saying, clearly a perpetual self-believer, and very passionate around the space. So, Neil, thank you very much for joining us.
Thank you, Ken, I really enjoyed this 30 minutes.
Take care, and we will look forward to having the audience join us again next week. I believe it’s going to be number 95 of our digital leadership podcast series, so coming up to that great 100.
Thank you all and have a great day.
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