Ah, good morning on a Wednesday morning. This is St. Fidel. We're doing business in Hawaii today with Donny Shimamoto. He joins us from the West Coast. He's a CPA, but he's very high tech. Hi, Donny. Hi, Janice, to be here. Yeah, thanks for coming. Well, I wanna talk to you about your practice because your practice is not the ordinary run of the mill CPA practice. It goes beyond that and maybe it's a statement of the future. Can you tell us why your practice differs from the conventional CPA practice? Sure, I like to think of my practice as the next generation practice and it's really representative. I normally call myself a non-traditional CPA because I don't do audit tax or bookkeeping. My background is actually in audit, but I actually do technology advisory services. And what that really means is that we help our clients make better decisions around technology and their use of technology, particularly in their businesses. So there's two things happening here. One is your using technology, which I wanna cover in some detail on this discussion. And the other is your consulting with your clients about their use of technology. Yeah, that's very important because a lot of clients are Luddites. They should have an L for their middle name Luddite. So let's talk about that one first. What do you find out there in the CPA community, the client community? Are people knowledgeable about this or no? I think there's a pretty wide variety. And one of the things that I find interesting is a lot of people go, well, with the millennials coming in that, hey, I just grabbed the millennials, stick them in the workforce, throw some technology at them and they'll fix all of our problems. And I'm one of the ones saying they're going, no, don't do that. Business technology and the way all of the different systems interact really takes some knowledge and it takes an understanding of business processes. And when we bring the accounting context in there, it takes in also an understanding of internal controls or how do I stop someone from committing fraud or how do I ensure that I have data I can rely upon? And that's where the CPA mindset starts to come in.  And by the way, millennials, anybody young, it doesn't really matter if they had a cherubic look around them that they must be a millennial. And if they're millennial, they must know about technology. And if they must know about technology, they're a natural for my business, they can figure it all out. All I have to do is unleash them and it will just be fine, but that's not true. So how do you get a millennial, a cherubic millennial who has been doing social media and games all his life or her life to be a business, a business computer person? How do you get them to make that transition? Well, that's actually part of what my firm does that's also different. So the reason I'm actually on the West Coast right now is my firm is based in Hawaii, we're a Hawaii CPA firm formed in Hawaii. I'm a University of Hawaii grad. And but what I'm having to do is I'm having to actually travel to educate people how to do this. So I spend over half the time of the year traveling around the mainland speaking in different states and within the last couple of years, also internationally to really help people understand this is the business aspects of technology. And these are both the innovations that can help move us forward as well as here are some of the cybersecurity and other types of things we have to worry about as we look at our foundation to ensure everything is secure. Yeah, so here you have millennial, bright-eyed, very familiar with social media, spends 18 hours a day on social media and I know it's how to work that phone really, really fast. But he doesn't know too much about business programming and software. Well, how do you start that conversation? What do you say to him? Look, you got to come to another level. Here are the things you need to know. What are the things he needs to know or see? The first thing I always say is start with the business purpose because a lot of times what you'll see and this is not just in millennials but this is a lot of the vendors, they're coming to you with a solution that's looking for a problem. And a lot of times I come back to it and I'm like, well, wait, what is the business problem that we're trying to solve? We really need to start there and understand also what is the strategy for the organization? What's the business strategy? What are we trying to achieve? So those are normally the first things we really start to come at and say, well, how is this going to either add value in really being able to help us to do something or how is this also potentially going to add risks? And so I need to do something to secure it or I need to make sure that I'm understanding the potential impacts to the business if this technology is not available. But I think about like ransomware, that's one of the ones now where if you've got ransomware, it'll lock down your systems and how do you deal with that? And if you've built your business and being dependent upon the system, have you mitigated the risks associated with that? No, it's so interesting.  I'll tell you why I say that. Because when you have dog training class, you're not only training the dog, you're training the master. You're training a whole new paradigm between them, a relationship, where the icons of knowledge, of programming, of expectations are all different, but they both have to get on board. Am I right? You're completely right. And that's when we look at the success factors for whether technology or innovation as a whole is being incorporated in, it takes that buy-in from the very top, that CEO or business owner coming in and saying, okay, I understand that this is technology, this is how it'll help our business. And then them also coming in and allowing the millennial, whoever it is, because a lot of times I'll tell you too, it's not the millennial, it's the Gen X, or maybe that understands the business is in a management position and is in a well-positioned to say, well, this is how we can use that technology to really come in and help. And so it's really about buy-in and adoption. And that actually, interestingly, I gave you my background, I'm actually a CPA by training. I'm an IT specialist within our CPA realm. And then I've also done some graduate work in organizational development around behavioral change and organizational psychology, because it's that adoption of the technology and that change in thinking that's required to really get the benefits.  It's called network analysis, social network analysis. It preceded Facebook, it preceded social media. And it is the concept that actually the NSA started using after 9-11, where you take the email of a given organization and you analyze it for keywords and then you make another schematic, a whole new schematic of who's really running the place, a social network analysis. And it has been used, it is used today. And you're using it, I guess, in corporations to find out who in fact is in charge. It's very important. Yeah, it is. That's one of the great uses of artificial intelligence as well, is it'll tell you who the real people are. Yeah, well, before we go to that, and I do wanna go to that, I wanna catch on one thing you said, and that's security and ransomware and all the other dangers and risks and threats and pitfalls of nasties that are out there watching you and trying to do either mischief or kidnapping, as the case may be. So you have to help people because their lives and fortunes, their businesses in general are completely dependent on being clear of those threats. But those threats change every day. Therefore, you must change, you must follow it. So my first question in that regard is how do you follow something that is moving so fast that the average Joe has no idea how fast it's moving? How do you follow it? That really I think is a misconception. So I won't say that it's not evolving, it is evolving, it does evolve quite a bit, but most people are not subject or as much at risk to these first day attacks or these late-in attacks that are really coming in. What we can do though is we can prepare and be ready to respond. And so really it's about making sure that you understand where are the threat vectors to your organization? Where are the threats potentially coming? And with that, I'll mention, if you look at Ponemon's research, they do a study every year around the data breaches, only 50% of those incidences are coming because it's this outside hacker trying to come in and get into your network. And everyone thinks, well, that's who it is and I'm never gonna stop them, right? Because exactly what you said, it's like everything's changing so fast, how can I even stay ahead? It's really only 50%. Another 25% of the attacks are really coming from an employee simply making a mistake, clicking on the wrong link, opening the wrong attachment, that ends up giving up their password or launching the ransomware attack. That those threats are combated through user awareness and helping them understand these are how you identify links that you shouldn't be clicking on. This is how you make sure you don't click on something or open up a file that you shouldn't be opening. Those are some of the simple things, that's another 25%. And then the last 25% is really about IT or business processes not being designed correctly. And so that again is making sure that you have competent IT team or you're working with a competent IT provider, as well as making sure that your systems are designed in a way where whether it's social security numbers, bank routing numbers, credit card numbers, that they're not exposed as they're moving through your systems or through your transactional processes. So 50% or half of the incidents is that cause a data breach, you can actually protect your business from. Well, that reminds me of the false missile crisis back two years ago, I'm sure you followed that. And it was a particular employee working for the organization that handled the warnings. And it was a question of training. It was a question of the authority. It was a question of the protocols, the programming. All those things seem to have gone wrong. And in your discussion a minute ago, it sounded like if you follow the steps, you were outlining that would not have happened. And so, but the lesson to me is that you can have a perfectly innocent situation where somebody just isn't up to snuff, where the programming isn't up to snuff, where it hasn't been thought through. And because of the leverage you get in computer programming and software now, going to mission critical operations by the company, you can have a huge result for a tiny, tiny slip of the wrist mistake. So this is very important, what you say. You could bring the whole enchilada could come down one little tiny mistake. I was gonna say that's one of the things too though, that whole fear of that little thing coming through, that's what you see a lot of IT professionals using as leverage. And they'll come in with these dark web reports and these other things saying, hey, you need to be careful, here's all the things that are floating on the dark web. But in the end, it's not about absolutely minimizing that risk. It's really about managing that risk. And that's that perspective that we come at as CPAs. What are the risks out there? How do we manage and mitigate those risks to something that's manageable and acceptable by the business? Right, but we don't panic. And we don't, we don't go too far too hard, too fast and worry about it all night long. That's a yes, I totally agree. And that takes me to the next question I have for you, which I think you knew I was gonna ask you. And that is coronavirus. You know, we are sitting in a world that is changing around us. Some people say by the hour, other people say by the minute. Angela Merkel, you know, this morning predicted that two thirds of the German population would be infected soon enough. There are other scientists, you know, based on, you know, a scientific analysis believed that we'll have millions of cases over the next few months in this country. So the question I put to you is you have clientele out there. They have important businesses. They have employees who are at risk. They have management who's at risk. And they have an ongoing, you know, threat of threat that might get, it is getting more deadly every day. They must ask you what to do. What do you tell them now? Today, Wednesday, what do you tell them? So luckily a lot of our clients are coming to us because they've already anticipated these types of incidences. And this actually falls into the area of business continuity planning. And some people will call it disaster recovery.  We can't leave our homes, right? We're isolating ourselves. Then it is a disaster. So what we're really looking at here is how do we enable business processes to either be conducted remotely or that they can be automated, right? And so they can be conducted without a human intervention. So depending upon the industry and of course depending upon the type of systems that a company is using, that's where these business continuity plans are gonna vary and they're gonna be different. Yeah, so you come into a situation and you, you know, I'm sure you have this experience and I'm sure you've been through it. Coming to a firm, a new firm, new client, new client.  They got software that isn't supported and they're dealing with a mindset that doesn't have any significant expectation for moving ahead. And so now you're meeting with the executive committee and you know, what's on your mind is these guys are way behind the curve and they're gonna have to spend some real money to get even to a reasonable place, much less an advanced place. What do you say to them? Now that'll call on psychology. I mean, maybe you need a degree in psychology too, you know, a psychological CPA person. Anyway, what do you say to them? That, you know what? That is exactly where it comes to. A lot of it is about, I actually think of it as hope, right? And so there's all these things happening. I don't know what's going on. And so it's actually one of the way we describe what we do is we provide vision and clarity. So our typical client when we're coming in, it's my question is, tell me where you wanna be three to five years from now? And we create that vision over on that side that says, okay, this is where you wanna be. If this is where you wanna be three to five years from now, let's look at all these steps that we can take you to go along the way to reach that vision. And that's how we take this big massive, we have to update all these things and break it down and say, okay, now let's figure out what can fit in your budget. What's gonna make sense? Let's step you along and create this roadmap. And it may be a mix of different products. It may be a changing in systems. Sometimes it's just changing in the way that you operate business processes and procedures. And but that's kind of the core of our approach. Dan, we're gonna take a short break.  I know that's a very broad question and what you would like to see them ask you for, but you would like to see them ask you for. I also wanna ask you about the distinction between, you know, profit businesses, ordinary corporations, LLCs and the like, and nonprofits when it comes to your special kind of practice. We'll be right back. Don Ishimamoto. All right, we're back with Don Ishimamoto here on Business in Hawaii on a given Wednesday on Think Tech. I'm Jay Fidel. And my next question, which Donny already knows what it is, he's sitting there in the room with a bunch of management guys who have a 20 year old system and he's trying to bring them current and get them to see into the future even, maybe use that future examination, the ghost of Christmas future, if you will, as a way to get them off the dime. But they may be Luddites, Donny. If they're Luddites, you have to offer them options. You have to give them the vision. So what kind of vision do you give them? What do you tell them they should be asking you for? Yeah, it's interesting that you frame it that way because we actually would not work with a client. If they're at that point where they're like, we don't know, we don't believe in it, then we're like, thank you. This is great talking to you. You're not the client for us. We're really here to help those that are buying into the technology and that value in it move forward and accelerate their own success. Okay, well, let me go to this then. What kind of two to five-year plans do you usually get? What do they usually say to you? Where do they say they think they want to go? It's really figuring out how do you better leverage technology? And so whether it's onto, quote, the cloud, right? And how do I actually move my processes to the cloud? Or how do I increase the interactions, the digital interactions with my customers? So whether it's online shopping, online customer support or email-based support, or how do I, the other one more internally focused is how do I actually make everything work together? How do I get information that's in this system going into that system so I don't have someone manually re-keying things? So that's where we'll bring all whatever technologies are potentially available and talk them through and say, well, this is what's possible. And then we actually from there help them find all of the vendors that might make sense. So a lot of times you can almost think of us like a general contractor, where we have this ground plan for what you want your business to look like and we'll bring in all the different specialists that then we'll do the cabinets and the flooring and be everything else to make everything work. But we make sure everything works. I like designing a bicycle. First, you need to frame. Yeah, yeah. You know, you make me think of the experience we had in Hawaii maybe five years ago where the state government decided that, yes, it was way behind and the state government wanted to catch up and it took certain steps. It hired a consultant who had had a lot of experience in organizational computer networking, so forth, from Washington. He was from GSA, as a matter of fact. Sonny Bukwalia was his name. Anyway, he found after, you know, it was like a lot of money was spent by the government and by what do you call it, private industry partners in the project. He found that, yes, indeed, the state was way behind and we only knew that so that was not really helpful. Then the question is what to do and that means a lot of money. And so, you know, I asked you before, what happens if you're in a room of Luddites?  Do you take that client? So it depends, you know, it's funny you mentioned that project. When I first heard that project, I was like, whoa, good luck. And then I saw the vision that Sonny came up with and I went, wow, that's pretty amazing. You know, it would be great. It would be great to see all improvements in government and but it comes down again to the people and it's about change and it's about helping people understand and buy in even more so in government, right? Because we've got the unions that are coming in and we've got people who, stereotypically, I'm gonna say that not all state workers, but stereotypically, people think of state workers as, you know, I'm not gonna change, I'm not gonna do anything. And again, that was why I ended up doing some of the graduate work in the psychology area because it's about how do we introduce incentives for change or how do we help it buy into change? And it's an adoption that is probably the most difficult. The other thing that I think is from the state perspective, when we look at that is there's a lot of complexity and there's the need for allowing particular departments to really be able to operate on their own. And it's not only true in state government, it's also true in business, where maybe there's multiple departments or there's multiple divisions and they're having to work a little differently and that's the type of flexibility that it's our jobs to bring in to understand how can I introduce flexibility and ability in a business while still maintaining internal controls and maintaining all of the information and data flows and integration? Yeah, well, and I wanna take you to one other kind of client, which I think is one of your favorite clients and that is a non-profit. Non-profits are special animals. They have special management, they have a whole different way of thinking because there's no real owners there and the managers are incentivized in a different way and their missions are different and arguably it's altruism that drives them, it's a different way of proceeding.  Actually, I actually find it's a lot easier with non-profits because of this focus on the endpoint customer, the outcome that they're trying to achieve. So that's where when we look at a non-profit, it's really the motivation to help people and I'd like to also think that that's the motivation that we're seeing in government, right? In the end, how do I serve the average citizen? How do I make a difference in people's lives? And so the psychology around that again comes into play. It's the motivation of, well, if we work together and we make this change, that's how we can achieve this lofty goal that we set as a vision that we're trying to achieve. Versus a lot of times in business, the problem we're gonna see there is they'll become this question of, well, what's the impact on my profitability and is it gonna affect my profit sharing or is it gonna affect my bonus? But if we don't make that, versus in the non-profit world and in the government world, we see that as well. In the end, if I have the funding and if I'm able to better serve my constituents or the people that I'm trying to help, but then we should do it, because then it makes sense. Yeah, absolutely. And it seems to me that that's one of your favorite things and it also seems to me that people in the non-profit are, they're trying to make the world a better place and they're not asking you, how soon are we gonna recover our costs? Which is a deadly question, because it's very hard to answer that if it's a prediction thing. So I guess we're a non-profit and we want to hear a think tank. We want to have every new technology that we can possibly imagine. I don't think that's your average client, but suppose you're run into a client like that who says, Donny, we want it all. You do AI, we wanna find out how AI is gonna leverage every single thing we do. We want database, we wanna keep a record of everything and have it immediately available and so forth. What do you say to that client? Because he has the risk of spending too much money on dream-like things and aspirations that are largely theoretical. How do you stop him from doing that? Or do you stop him from doing that? It's actually the same question that I started with in the beginning. So what is the business outcome or what are you trying to achieve? And can we actually align the technology or the thing that you saw at the last conference that you went through, right? How do we align that with achieving that vision? So we'll go through a little bit of validation there to make sure that we're managing expectations and that it really is contributing towards the objectives. And that's, again, the decision-making process. And I'm here as a CPA to help my clients make better decisions around technology. So it's really taking you through that, going through the visualization because there's diagramming techniques that we can use to say, this is what it really needs to look like when we get there and then figuring out, what are the steps? How do we ensure? And if they want to move fast, how do we get people behind it? Because the faster you move or the bigger the project is, the more risks there is. And so we need to make sure that those things are managed appropriately. Well, last one, one last category. We only have a minute left. And that is the guy that says, I don't care what it costs, Danny. I do not care. I want to be at the front of the wave. I want to have the greatest leverage possible. I want to automate everything. It sounds like Jeff Bezos, doesn't it? I want to automate everything possible because I know that in the future, this will be a big return for me. Not now, but later. And nobody cares how much later, but soon enough we want to leverage. We want to have the benefit of this leverage. What do you say to that client? Can you do that? How do you do that? Is that a special effort for you? I'll tell you, in all my years of practice, I've been in practice for over 20 years now. I've never heard that. I wish I could say there was a scenario for it. We don't see it very often or at this point at all because we were primarily with small and mid-sized organizations, very much our Hawaii business environment. And so we don't see that a ton. I will tell you though that when a client comes to me that has that type of mentality, because we've tried to work with them, like start off in as a recipe for failure, because what you're gonna find is that they're gonna say, well, I want all this today. And then they go into the next thing and they go, well, then I want that tomorrow. And can you deliver it by the end of the week or tomorrow or yesterday? And those are asking red flags for us. You can't chase the rainbow every single day. Donny Shimamoto has an extraordinary CPA who's into so many things, including technology for everything in your business, or your nonprofit, or even your government organization. Thank you so much for joining us, Donny. Thank you, Jake. I appreciate you cutting me on the show. Hello, hi.


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Thank you for coming out. I want to talk to you about a hacker who looks at 50 if you can believe that. I mean, that's kind of scary because you figure, okay, in the grand scheme of life, you're hoping that this is like half time, and it's not the two-minute warning. Buddy mind says, maybe you're in sudden death. So, enough of the football metaphor. Hopefully, it's not too bad. So, anyway, what I want to do is talk to you a little bit about what security was like back in the old days and some of the things I've learned over the years. Because one of the things that's very hard to come by is wisdom. Where does wisdom come from? Mistakes and mentors. Okay, mentors are people who are going to try to share with you the wisdom they figured out. The problem is wisdom has a diode. It cannot be taught. It can only be learned. And if you think about it, all the lessons that you finally figured out, they've always been there. You just have chosen not to accept them. And the hard part is to go ahead and listen to some of the words of wisdom and say, you know what? I don't like that. I don't want to agree with it. But if the person really does care about you, and they seem to have some amount of wisdom in their life, then it's probably a good idea to listen to it. So, I'm going to try to share a little bit of that. And I added that qualification on there on the CASP, CASM, CASA, my alphabet soup. Because, yes, indeed, I am now a card-carrying member of the organization in America. The only one that I know of is more liberal than Barack Obama. And that's AARP, whose sole purpose is that if you've strung together 65 birthdays in a row, you deserve the contents of the United States Treasury to be given to you and benefits. So, we'll see how that works out. Anyway, these guys are scary because I started getting all this mail like a couple of months beforehand. I finally figured out who stole the VA laptop with 125 million names. It's AARP, and that's how they know how to go ahead and get you on schedule. So, anyway, my first introduction to computers was a long, long time ago, back in 1973. We had Amherst Central High School outside of Buffalo, New York. I imagine it had a whole lot of things to do in Buffalo, New York, because you got, well, two seasons, winter from the 4th of July. So, you spend a lot of your time indoors because it's very cold and a lot of snow out there. Well, they wheeled these two big computers into our high school and we're trying to figure out what these things are. They were gigantic 2741s. Anybody old enough to remember an IBM 2741, what that thing was? What was that?  I was saying I answered my question. You know?  IBM 2741. Big selector typewriter on about 50 pounds a year. I mean, it was huge. And it tapped out at about 110 bucks. But the cool thing was is that you could have an acoustic coupler. Remember those things?  It came with no manuals, no read me, no help button, no F1 on the keyboard. You just, there it is. Go figure it out. And so being kids, we started figuring things out and we started to play with it and started working. No, it's pretty neat because back then there was no internet. There were no cell phones. Thank God. No email. No text messaging. A whole lot of things that we depend upon today just didn't exist. So we had to do the strangest thing in the world. And that was talk face to other people. Which is a communication skill I think is getting lost. Two months ago I had a chance to be the guest speaker at an Eagle Scout installation dinner. About 70 of these kids came by. You know, really sharp kids, 13 to 17 years old who achieved quite a bit. Four of them looked me in the eye. All the rest came up like this. You know, they had big thumbs. But they kind of lost that interpersonal context. So it's an important thing to be able to talk to people. So I hope you don't lose that. So anyway, the point is what I say is that a lot of the stuff we did back then is the same as what you can do today. It's just a lot slower. But the principles are the same. And you hear some of the stories you're going to sound a little bit familiar to you. Okay, because with this old dialogue thing, we had a program language called APL. Anybody ever heard of APL? All right, what does APL stand for? A programming language, pretty cool. And if you can believe it, this t-shirt fit me in high school. This is my APL is taking over. Anybody recognize a symbol in the middle? See if you really truly know what APL is? What's it called? Anyone? Turn it this way. It's not an iPod. Going? Quote quad. All right, yeah, that's for alphanumeric input. Way to go. I've had that t-shirt longer than, actually, not longer than you've been alive, but longer than everyone else has been alive here. Anyway, it's pretty cool. And so what happened is we had this APL was pretty cool because what Iran is an interpretive language in Iran on the IBM system 370. And there's one of them for the whole Western New York area on the high school style. And we figured out, like, you send messages back and forth to kids in other high schools that are like so far away, like 15 miles or 20 miles, they're on bicycle range. And so therefore, you can never meet them except through, well, the precursor to the internet, which is our little message system. Well, anyway, what happened is as we got a chance to go learn about the system, you figured out what do you want to do? Well, what does everybody want to do with a computer system? Own it, right? Not porn.  So anyway, we figured out, well, we'd love to own this thing. Well, the problem is, is that you really don't have a chance to go ahead and build root kits back then. But you had to rely on some other way to go ahead and attack the system. Remember, this is a system 370, big gigantic thing, size, well, not quite the size of this room, but huge ton of air conditioning equipment and it works in a big glass room. And the only way you know, just wear a white lab coat and four different colored pens. And then you knew you're one of them. So how do you penetrate that great exterior security, the physical security to get there and we actually get to the console and run it. Field trips.  And so what we did is we said, okay, fine, let's we got to go ahead and because we thought our little computer is like this whole thing. Turns out, no, it's just like one of the little things running on this old time share system. But to us, it was a whole universe. Okay, so, you know, the little blue pill, red pill thing, well, we figured all right, we're inside this little world. But we found where the console was. It was sitting over in the corner, and it was unattended. So of course, we already had the setup. So one of the guys went over and kind of you looked interested at the disk drives and the tapes that back and forth. And one of us kind of like wandered over. And like, there it is, what's all print out, right? It's a fan fold paper. So we're kind of like leafing our way back up, trying to find out the log in from the morning. There it is. On APL, all the log in IDs were numeric. And so I'm thinking like, Oh, there it is. It's like I remember this 314159, 314159. Okay, and that that was the root user ID was pie. It's like, cool, and we got the password. So we wanted to come back and we figured, Okay, this is pretty cool. Try to get back in there, log in, number and use. Okay, it doesn't work. Why? Because you only be logged in once. So now you have a problem that you got to go out and figure out how to get in before the operator. What do we call that today? Race condition, right? You're trying to go ahead and get into the system before this user, which means you had to show up earlier and earlier to school. And finally, one morning we got in, we logged in, we got in as the system operator, we got the password, and just sat there. We're like, wait a minute, where's our prompt? Where's it's getting, you know, we can't keyboard is locked up. We didn't realize that the system operator console is always locked until you hit the equivalent like the escape key, they called attention key so you can send messages, receive messages all the time. So we kind of sat there for a minute or two, the operator tried to log in, he got number and use realize he'd been owned, change the password. Okay, so around a lot for three more months, we get the next field trip out there. Fortunately, that worked again. They didn't have very good passwords. It used to be third and then they changed it to fifth. I imagine we might have missed one in between, okay, but again, bad passwords were all the rage back in the 70s. Some people just never grew out of them. And so what we come out of there is that we want to figure out okay, when she owned the system, how do we go ahead? We got to come up with some way to get the system operator to run a program. Well, they're all the regular software. Yeah, it's nothing special about it. But we did read something in one of these little APL journals about one of these control characters, little I beams or dyadic I beams, and it basically an I beam was an over strike like a little T in the upper upper one. And that allowed you to get system information, user ID, time of connect, things like that. But there are special I beams that would privilege accounts that would add and allocate space to your account that would delete accounts that would add them. And so if you're like, Oh, this is cool, because we can't run the system commands. But if we could come up with the primitive operator and get the operator to run it, it would then privilege us. What do we call that?  Trojan horse. Yeah, so we wrote wonderful Trojan horse game programs. We had the best tic-tac-toe and everything else didn't have any porn in it because it was all ASCII. But there was ASCII porn, but we didn't understand that Hey, this is Buffalo. Okay, there's not much to do up there, but hockey and shovel. So anyway, what happened is we figured, Okay, there's one of these manuals and IBM manuals. Somebody brought this to me yesterday. You hear? I'm drawing a blank on your name. That's an old guy thing. System 370 principles of operation. I mean, this is a classic. And you take a look in there. It's all kind of the old episodic. It's not ASCII. And this is pretty cool. Anyway, this manual that instructed everything how to run the system was not available. You couldn't order it from IBM because it began with an L license material and license material you're not allowed to keep because it's property of IBM forever. So anyway, like Ray Clark decides to run down and he says, Hey, I'm gonna go down to IBM and Buffalo and try to get one. So how are you going to do that? So I go ask for it. You got to be kidding me. So Ray, he's like a junior, I heard of sophomores, rides his bicycle down to a Buffalo walks into the front office and says, I need to copy this manual, you know, L Y 20 delivery. They say like, Well, that's license material. We can't give that to you. He says, Well, I want to talk to Dr. Ken Iverson. Well, Ken Iverson is like a senior fellow at IBM. He's the guy who invented this language. And he's in our month, New York at some high level meeting. And he's an outrageous and they're pounding on. You talk to Dr. Iverson. So they call over to our month World Head Gordish, right? Yeah. Yeah, we got some kid here says he wanted to talk to you. He says, What does he want? He says he wants to copy the man given the damn manual. It's like, Okay, it rocks. So one of my observations in life, just ask. And he came back with this thing. It's like, Cool, it's like the user manual for it. So we wrote all these things and things like that. And fortunately, we couldn't really get the operators to go ahead and you know, they were too busy doing other things. And they kind of got onto us. I mean, Hey, you're 15 years old, you're trying to give in somebody who's at least what twice your age to run something. But we started doing stuff. We could mess with it because we learned out that you could get things if I just by asking. And then what we did is we when I remember one time I was in and the account numbers are all numeric. Any of the first five digits were your school user idea hours was 16504 and junior high was 16525 and other schools are that in the last three digits were like random. But we all know that there's real such thing as random numbers in computers, right? They're pseudo random. What do you need for pseudo random? A seed to start out. Well, guess what seed they used to generate the pseudo random numbers that were used for the account sequence? The system default. So one of the time I was sitting there playing around and I type in, you know, give me a thousand random numbers from a thousand to a thousand. You know, beep, beep, beep, beep, beep, beep. Sound like scanning down this whole list. It's all printed out and I can't just put on the screen. And I start noticing because I knew the three user accounts that belong to our public account were 909, 094, and 061 were the last three digits. And sure enough, there they were in the buried in the sequence and like, wait a minute, what about this one? Hey, there's mine. Well, here's one that I don't recognize. Let's try it. Brand new account never been used. Whoa. Can I get a little adrenaline rush? Like you've got the entire book of everything. I tried another one. Well, it didn't quite work, but it was off just slightly, but it worked pretty well. And just then the computer club advisor, Mr. Berg, walks in and he's like, hey, how are you guys doing? It's like, oh, we got this whole print out. You're trying to cover it up. Yeah, nothing going on. You know, move along. Nothing here because, you know, you're trying to log into all these different schools and things like that because we figured out the sequence. Well, it turned out we were off just a little bit because it wasn't, well, I did like 999, question mark 999, trying to be intelligent, figuring they wouldn't use like the 1000. Well, they did a thousand, question mark a thousand. So that's why a couple were off. It was very, very slightly off, but we got about 85% of the user IDs for all the high schools around Western New York. And so even though it wasn't perfect, don't wait for perfection. Just run with it. So we owned them. We owned schools, all the places we haven't even heard of before. And that was pretty cool. And so then we figured I think great. We own our high school. We own all the other high schools. But is that enough? No! Total global domination. Well, at least as far as we can reach on our little acoustic coupler. Well, the problem was the telephone was only set up for dialing like 5. You know, it was an internal line. You dialed 9, beep, beep, beep, beep. You couldn't get out. You dialed 0 and of course you got the operator.  You didn't want to talk to the operator because you're sure they're going to tell your mom. Like somehow operators and moms talk when you're not paying attention and you're going to get in trouble.  So we dialed like 1. Then we dialed 8. And we got like this really weird dial tone. It's like, whoa, maybe it's an outside line. So we tried calling home and beep, beep, beep, beep. Okay, it's blocked. Well, after a little while, we figured like, okay, well, you got to try some different numbers. So we figured, what's the first thing? Let's try something. Let's try dial 1. Dial 1-1. 1-1-1. Click. Ooh. There's a sequence there. Nothing happened, but something happened. 1-1-2. 1-1-3. 1-1-4. What are we doing here? We're dialing. Well, Matthew Broderick was still in diapers. And all of a sudden we dialed like 1-4-3 and get another dial tone. Cool. And now we dial a number and you get like time and temperature. Whoa, this thing really does work our way out. And so we kind of mapped out this whole space. And we found out that we could like call all over the place. So I figured like, well, this is pretty neat. Well, one of the times my parents were there down in Florida for vacation. And it's six kids. Okay, you need a vacation, you got six kids. And we never traveled very far.  Okay, I have a small world there in Buffalo. So I like mom and dad are down in Florida. Remember back then, long distance was expensive. So you only could call on the weekends if you had to call somebody because the rates were high during the day.  She's down there visiting. Hello. Hi, it's Mark. What's wrong? Did something happen to the baby? Like, no, we're just calling up and say hello.  It's like, okay, this is a bad idea. Sorry, mom, I gotta go, I gotta go to class. Why click? This never happened. So we realized that even though you have the capability, there's sometimes not a good idea to use it. Okay, so anyway, we started trying all these things. And then we got into the mainframes of the University of Buffalo. We got into the other mainframes and systems like that. But kind of the hacker ethic back then, what's the thing that we understand today? Hack everything, right? Well, back then it was kind of two simple rules. Cause no damage and don't take anything that doesn't belong to you. Which is tough to do today. But back then there were no legal enforcements. None of this stuff had any laws written for or against it. It was just like the Wild Wild West and the Internet. So we kind of all self-regulated. It was a little like small town America where you could leave your car keys under the mat and you could never have to block your front door. And it was okay. Now we've urbanized the internet and of course you got to lock your door, take your keys, set the bar alarms and things like that.  So we figured like, well, okay fine. We got all this stuff. And it was pretty neat. So we figured out that once you logged into the system that they had to run the accounting. Cause it was time-sharing. So when you logged out it says use this many time of connect and use this much time of CPU. Well we didn't want somebody that we never met to get charged for it. Well anyway, remember we talked about user right numbers? How do we get those? Well, first of all one account that we use. We use it for the summer because the Urie County Fair and they let us use the Poughkeepsie New York one. And they had, if you can believe it, in all the universal numbers you go all the way up to here they used four digit logins. And the last two are zero zero or zero one. Okay that kind of cuts it down a little bit. And they didn't use passwords. How long does it take for you to figure out a user ID? But the real question was, how could you figure out a user ID and not let them get billed for it? How do you get around the billing system? And it turned out, remember that old thing I said because the operator, if the panel, if the control thing was locked and you had to hit attention to get a message, it turns out that you could get forced off the system when they went to do the backups. They bounce everybody off the system.  Well, the bounce takes effect as soon as you get control back for the carriage return. So if you're typing out a line of text, it'll get to the end of the text and then it says bounce, ping, ping, ping, ping, ping and it logs you out. Well, what if you had like a really long line of text? Could you have a line of text that was longer than the patience of the operator? Because he wants to run his backup and go home. Well, what's the longest line that you can print given the fact that we had a 32k workspace? That's storage and execution by the way, that's the total amount we had. Well, it turned out that the binary representation of information, how many bits does it take to represent a 0 or a 1? Really only one bit as compared to two bytes or for letters or anything like that. So if you type 200,000 zeros, that's still fit within 32k and if you took the type ball off so it wouldn't use up all your precious paper in your ribbon, it'd go two minutes to six, one minute to six and the late bus leaves at six and you don't get the late bus, you got to walk all the way home. I missed a lot of dinners in high school and all of a sudden the thing would stop because the guy gave up. He just like shut down the system which meant anybody that was still logged in, their accounting data never got captured and so nobody ever got billed for it. We kind of kept a record claim. We thought, good, no one knows we're here. We're using these little back doors. This is pretty to eat and off we go. And over we're doing this stuff, we get better and better like that. So what are we doing? We're learning our skills. We're trying to become a master, a ninja master, whatever you want to be, but it takes a lot of time, okay? And unfortunately back in the 70s being a computer geek was not cool. We didn't dress in black, we dressed in corduroys and buttoned down shirts and we really really did, at least I really did wear a pocket protector and birth control glasses. I didn't tape them, I didn't have to. I never dropped them because, what, do sports? Like I was like this skinny geeky kid. I actually did go out for sports. I made one varsity team that was wrestling. In ninth grade I was five foot three, I weighed 97 pounds and I won the majority of my matches by default. No other high school had somebody my size. Hey, anyway you can do it. And in tenth grade I became six foot one and I grew 10 inches in a year and a half and my arm that I thought was about this long, all of a sudden was about that long and you go to shoot a basketball and it goes over the top and you know hit some of the third row of the beaches and you're like you're this awkward geek for a while. It's terrible. Eventually you figure out the new dimensions and new laws of physics but it's a tough time. You know everybody says you don't want to go back and repeat adolescence. I can understand that. Besides we hadn't really didn't, we couldn't find for only porn we ever found was when Chris Derangowski brought some playboys on a Boy Scout camp out and my dad was a scout master and he confiscated them. Then I found out he kept them. Dad, well I didn't keep him at home but anyway so he had to do something like that and so what we wanted to do was want to do all this stuff so we figured well what can we do? Well that summer after high school senior year it's like really tough job market because you remember back in the 70s things were going very well. Bethlehem Steel she remember, nobody remembers this, nobody remembers. President Gerald Ford with inflation and stagflation came with the program to help whip inflation now and what does this program involve? Buttons, absolutely. That was good. Would you like an iPood courtesy of Jinx? There you go. What did the buttons say? When? Like short now right without the extra ad.  We had unemployment in the mid-20 percentiles. Okay horrible economy, things are going lousy, everybody's desperate to get a job. I got a job at the corner grocery store as a night manager three nights a week. That was pretty cool getting paid minimum wage $2.30 an hour but we knew that one high school student per year got hired as a summer job to go work at the board of Cooperative Educational Services or BOSIS which administered all the computer stuff and so I said well you know I went to my high school advisor said well I like to talk to them. He says well that's kind of a coincidence they want to talk to you. It's like why? Well they know all the stuff you've been doing but since we haven't damaged anything you know it's not like we hurt anybody so they said well you got these kids doing all this stuff and like they own the boxes but they're not destroying anything. So I went there and got the job. So one of the first things I did is I made myself public enemy number one for all the other hackers in Western New York because I came up with a really good pseudo random number generator sequence for each of the school went to four digit sequence instead of three re-randomized everything, locked all the accounts and did a whole bunch of other security stuff all this stuff I'd want to do for three years and I'm rude I own the box I'm doing the stuff and I do it eight hours a day and I'm getting paid for it $2.10 an hour because it was a state of New York and they get paid below minimum wage and so I have a legitimate W-2 doing computer security work full-time for 1976 for $2.10 an hour. Have we come a long way or what? Okay? One of the things we did that senior year is we went ahead in 1975 as there's a really cool publication called Popular Electronics and on the cover of the January 1975 edition they had this new device called the Ailtair. The Ailtair was really basically the whole first home computer you could build. Yeah there's some argue that the yellow stuff but basically it came in a kit. Ailtair at $800 and they're like whoa this is pretty neat. So we got a bunch of kids from different high schools together because it's like $300. I mean my paper route for real paid 1.8 cents for a daily and like 5.2 cents for a Sunday. That's how much you made delivering newspapers and so at the end of the week you get up there snow, fire, rain, flood, whatever you had to go deliver papers and it was like $11 at the end of the week but that was kind of good money back then. So how are we going to go with $300? So we pooled our resources in multiple high schools and we bought one of these Ailtires and you open them up and it's in a box and it's just full of parts and there's one chip. Everything else, resistors, diodes, capacitors and you have a lot of solder. So we figured okay let's go. So we broke up into teams, we started soldering things, we put the board together and then when you did the board and you figured it out and you double checked it, you sent the board on to the next kid and then he double checked all your solder, make sure you didn't have cold solder joints and then you went on and we did this and it took us about a month and a half and we finally got all these hundreds and hundreds and hundreds of parts all put together in this little thing. We put it all together and over Tom Richmond's house because Tom was a senior and we were like okay guy this guy's big, 17. Plus he had like facial hair. That was pretty cool back then. See all you guys eating McDonald's today, all those growth hormones so you get facial hair at 12. But back then you had to work for it and so we came over to Tom, went down to his basement. Okay we're set up down there, I think it was on the ping pong table and we got the computer ready to put in the big chip. Anybody remember when chip was in there? Z80 chip, yeah the Z80 chip. And we take this thing out, of course danger could be damaged by static electricity. We don't need any of that. So we took a wire, we tied one end of it around the sewer pipe in the basement, the other one around Tom's wrist. Okay this guy was grounded, he would hit with lightning, okay he's grounded. And Tom takes this chip and ever so gently sets it and seats it in there. We stand back and we turn it on and it doesn't work. And it just sits there and the lights aren't moving and it doesn't respond.  Well we were like oh my god there's like a thousand different things that go wrong here, what could it be?  Bing-bing-bing. Hey you guys what are you doing? Hey what's that? Oh look at that big thing in the middle you know it's not pushed in he reaches it with his thumb. And we all like slow motion. No! And the chip wasn't seated right and that was a problem it worked perfectly. So Billy lived. Well what do we do with this thing? I said it got a little IO interface, pretty simple. So you programmed it with switches 1 0 0 1 0 1 0 load 0 1 0 0 0 1 0 load 1 0 1 0 1 1 0 load and it would take a long time to load a program. We started with 4K. Extra memory was you had to buy that. So once of course you programmed it and it ran your IO you just read the little lights and it was all in not-hacks, octal. It translated okay 7 1 2 and you didn't figure out the words or things like that but it ran. And so we figured like what can we do with this stuff? Well one of the guys was really smart and the next year actually got the junior achievement invention of the year award. Naturally it came up with a little IO device it was basically a keyboard and it was using the equivalent of a touch tone pad and a little LED display we could key stuff in. So now we had IO we had O. This is pretty cool. And we also figured out a way that if we could go do this something we could go ahead and show it off at a school assembly. And we found out a little article where we read some plays in the magazine that if you played a certain sequence of no ops in the right order it would create a little RF transmission if you held an AM radio next to the chip. You could make go dee dee dee dee or whatever you wanted to. So we took this thing to the school assembly and made it play music. And that was our highest and best use. This is the same device that Bill Gates looked at and said Microsoft. No by the way we did write a 4K basic. I wrote the long divide routines. We all we wrote the stuff. And this is what was and jobs looked at and said Apple. And they wrote the little IO device that we did. But what do they have that we didn't have? Vision. And what they end up with that we didn't have? Billions. Not that I'm better. But vision is important. Vision is everything. If you don't have vision for your life you're following somebody else's vision.  And so we had in our hands Apple and Microsoft but we didn't have the vision. We're a couple years younger than those guys but not that much. And so we all went on. We went off to colleges and we dispersed. We all got and we never came back again. Well here's the point is I want to go ahead and want to get into the place. Well my problem is we got six kids. I found my dad's old tax return from seventy five made fourteen thousand three hundred dollars. I don't know how we ate. But we did we had a lot of spaghetti. We wore clothes that belong to our cousins. We thought everybody wore hand-me-downs.  We did OK.  So you're just happy because we had a pretty good family. Well I wanted to go to something other than like University of Buffalo and take the bus into school because I knew if you lived at home you'd have to drive all the kids to be babysitting and things like that. And oh by the way I credit mom with helping me wake up very early and very easy in life. Why?  Hey Mark. Yeah. You going to babysit tonight? Yeah. Yeah. All right fine. Sure. Well all of a sudden you get up in the morning you get ready out the door saying where you going? I said what? You promised you babysit. Oh yeah. Well now I can wake up like that anytime came in very handy later in life. So thank you mom. But anyway I wanted to go ahead and I wanted to apply for stuff. So how do you get money? I had no money for college so I figured OK let's apply for things.  And then all these ROTC things I mean I don't know about ROTC my dad was in the army he used to tell me stories about how he was in the Korean War and he was a hero and you see a little scar on his leg and that was a bullet hole and he rescued all these guys and later I found out that's where he cut himself with a lawn mower when he was a kid and he had spent his time at Fort Hollerbird Maryland. He never got anywhere near Korea but that's OK when you're a kid you believe this stuff and like being the geeky kid I was I never learned to swim until I was like a 13 or 14 so I scared to death of the Navy because you know you look at the war movies these guys jumping over the side and they get torpedoed like no way I'm doing that. Well it turned out you know I got all these ROTC things the Navy moved fastest and I said alright well I need money I went in for an interview. So I remember December 1975 went down into the Navy processing station in Buffalo, New York did my weigh in six foot two 131 pounds. According to Little Noma Ground I had negative 4% body fat. I was pulling a 28 inch vacuum up here OK. And I went in for the interview and lo and behold remember I mentioned that summer job we did over the Erie County Fair where we were showing how kids can use computers. Well it turned out right next to us back then was the Navy and here's the same Navy Lieutenant the recruiter. It's like I know you I know you interview went really great thank you very much. Extra quarter in the collection played on Sunday. And I got a nice little letter in the mail from the Navy saying we're sorry but you did not earn a scholarship but we will keep your name on a wait list. Alright so it looks like it's living home but I didn't give up and I kept praying and I went going and finally got a letter saying congratulations you cleared the wait list you've got a scholarship four years paid to Northwestern University. And I'm going great I never applied to Northwestern University because that was my first choice. My first choice was MIT and I didn't get in. So I was going to be like hey why not shoot for the moon doesn't work doesn't work but keep trying basically never disqualify yourself.  If you're too old apply for it anyway. If you're not rich enough apply for it anyway if you don't have the time to experience if they want to see a SSP M-O-U-S-E and you don't have one yet apply for the job anyway because you know what you still might get it. And more often than not in life I found out that when I've asked for things that the rules said you can't have you get them because most people disqualify themselves why can't do that. I'm not smart enough I don't have the certifications I never finished my degree on and on. Well the nice thing is about having a college education paid for by the Navy is that you could like have a lot of fun. Plus my high school was pretty cool they had all these advanced placement courses and I took all these years of German and when I got there they were trying to do like language play so the problem was with the hair fees I mean you could really easily distract hair fees he was from Buffalo and he spoke like it's been I'm very hard Buffalo German and very easy to distract and it's like hey hair fees tell us that time again where you took this cow up the stairs in college oh yeah that was a good one and you know there goes a German lesson for the day so the problem with that is when you show up in college they want you to take this college level admissions and see can you get credit for two years of German because you needed that at Northwestern to get your degree from the Arts and Sciences School well guess what I got lost I could not find whatever the building was when I finally showed up was like half an hour into the exam it's like ah geez I went back to the register or whatever and they said well let's look at your grades well they actually look pretty good you know all A's and B's so yeah you will give you credit so I got six quarter credits for German I took AP English and math and what chemistry and they gave me credit for that they gave me credit for the computer courses that I took because I used to and I ended up starting class at the age of 18 with credit or placement for 17 college courses thank you just to my high school I mean just luck of the draw right well the thing was the weird thing was after two quarters you're already a junior you're 18 years old but the Navy gives you four year scholarship so I kept taking classes kept taking classes and you know eventually ended up finishing three different degrees I graduated from the Arts and Sciences and Technology if I was smart I would have lined up and did like a bachelor's and then a master's but I did all these things and one of the things we did in the summer was 78 was had a chance that I wanted to go to jump school because my dad was a paratrooper and my uncle was a paratrooper my cousin was a paratrooper and I was in the Navy and so the Navy only got 80 slots per year to go ahead and go to jump school I applied for the whole 56 colleges across the country and I pushed and I pushed and I pushed and finally convinced them to give me one and I went through it was the toughest training of my life today now I look back at the physical trainings wasn't that bad but back then I had to push beyond my limitations I remember seeing guys drop out they were on the high school and college or college football teams they couldn't stand the mental stress I could not fail because if I didn't get my jump wings how could I ever face my dad again and what I found out is that it's like when you have a this brick wall it's all in your mind and you run right at it and you're gonna hit it you're gonna hit it and you go right through it and your limitations in life are mostly up here and what you need to learn to do is challenge your limitations those limitations if you argue for them are yours and you can also make them go away you all have unlimited potential it's just we've never been trained that way so we keep thinking that we gotta stay in a box somehow so that was pretty cool and so anyway what I did is I went ahead I finished my degrees and went off spent four years in the Navy actually five years in the Navy I thought this is pretty cool I'm out here at sea I'm traveling over the world here's a guy I'd never got on airplane before he was 18 I'm in Hong Kong, Singapore Thailand buying all kinds of neat stuff doing these things meeting interesting people not killing them you know it's not what we did back then but travel the whole world was like well all of a sudden this is pretty neat and I thought well maybe this would be nice to do but the problem was is that I said I really wanted to go and work for NSA why do you think I like all this swag why do I think I have friends here from NSA but it turned out that the Navy said you shouldn't go to NSA well why not I know computers I know security I got a degree in math and computer science and I all that nope if you your Navy has no need for computer security from Washington 1984 go back out to sea go to department head school or do something like that or go to ROTC and go teach school I was like no I really want to do this so I had a choice I needed to go work for NSA for three years and then my career would be over I'd have to go find a job where I could learn how to get and do an end around I remember sitting down in 1983 out at sea I got one of these little books about how to organize your life and I wrote down my goals I wanted to own a computer security company I wanted to do this and I wanted to travel something and they wrote it all down it turned out if you have a vision and you write it down it works all that stuff happened and at the times of my life I had a written set of goals I made the best progress in my life who here has a written set of goals that you've updated in the last 12 months it's in writing yeah look around 3%, 4%, 5% alright one of the studies I did I think it was at Princeton University I talked to a bunch of guys that graduated all the graduating students aged 22 3% of them had written goals they've tracked them throughout their careers around retirement that 3% owned 97% of the wealth of all the class written goals work they're huge okay so anyway I figured I could go to that or I could go learn how to start my own business and within three years hire people out of National Security Agency so I went to work for Booz Allen for a year and a half and then I went to work for a little startup company and two years, six months later I started National Security Corporation which is where the company's name came from I've been doing that for 21 years and that's pretty cool one of the best things I learned when I was at Booz Allen was one of the older ladies she had been almost 50 Lorena and she told me something I always remembered and I followed she said Mark speak every chance you can what I know about speaking speaking is the most terrible thing more people are afraid of speaking than they are afraid of dying but I started doing it and the more I did it the better I got at it I had a chance to speak next to Admiral Grace Hopper she was a keynote speaker I was one of the warm-ups I remember Admiral Grace Hopper every seen pictures of her with a white hair and her unfiltered camel cigarettes coming, young man she, I wasn't even uniformed she didn't always a lieutenant in the reserves at that point I want you to make me a promise she points this unfiltered camel at my nose yes ma'am I want you to promise me you're going to write an article on the value of information because she saw back in 1986 the value of information that we're seeing right now with identity theft and all the problems and compromises and she said someday you're going to see information on balance sheets well I haven't actually technically written that article although I've done a hundred presentations maybe that's why I'm still alive because I have to fulfill that promise to the amazing Grace but I do spend a lot of time telling people about stuff and being able to speak helps because it really makes it good but the only problem is is that when you start a business on your own don't go it alone because you don't have somebody else to cover for you you've got to do all the mail and you've got to do all the typing you've got to take out the trash you've got to make the coffee and you've got to go ahead and do all the accounting you've got to do the bill saving and you spend huge percentage of your time thrashing so pay someone else to play at what you've got to work at I didn't do that I was a control freak because I knew I could do it better than anybody else and I'm sure I've done it better than anybody else but it's still just me 21 years later I was in business before semantic I was in business before mostly major computer security companies but I didn't grow it because I didn't know when to let go I didn't know when to share and so one of the things I did when I started my company I had to make money I had to do money anyway I could one of the things I found out is that cash flow was tough in the first four months I made 300 bucks and the fifth month I made $12,000 in two weeks I thought this rocks because we actually landed a big client but then I didn't see $1500 a day for another 10 years so for a while you know I used like hand and mouth so you know what do you have to do you've got to be flexible I was fixing pinball machines at the local mall to make a little bit extra money building it through the company so they chose some revenue for National Security Corporation used secure pinball machines yes we do well it worked and it helped and it turned out later that speaking thing helped very much because a couple of years ago actually about four years ago when I was doing more and more speaking actually you know people say how do you get paid to speak I said talk for free for 17 years I did 17 years I talked never even knew anything about money and finally I kind of think came on I started doing better and better I remember one conference they said congratulations on the speaker feedback for us you ranked number one out of 122 speakers would you like to come back into our keynote next year it's like this rocks and then after 24 years they stopped the conference there was a computer security conference hosted by NSA and NIST and they could not agree on the letterhead who's going to have the name first or who's got the bigger things because these government bureaucrats they shut it down this thing had been going on since the early 70s so here goes my greatest chance to start them so anyway one of these conferences came along I started doing a lot of stuff for MIS training institute and they said well can you do this no I'm kind of busy well I really want you to speak that I didn't want to tell them like I didn't have a job at the time and I didn't have any money and I couldn't fight San Francisco and I said well pay you like a what you can get paid to speak yeah I was like well pay you like 500 bucks like you're on so I started doing it for 500 bucks then I kind of got my rate up to 800 I got up to a thousand and you know now I'm trying to get back up to that 1500 a day that I once got years and years ago I got a phone call about four years ago from a friend of mine worked for Cisco because I didn't realize what the marker I have no idea what things are worth it was an imperfect economy he says hey G mark I'm trying to get ahold of somebody else you know his phone number and looking up this is why he says because I need a speaker to do security so that's what I do at this point I'll fix pinball machines again he says well real what are we doing I says well we just bought a bunch of companies we need someone to go ahead and give these talks to all of our clients in the Chicago area and in the Midwest area we've got to do eight different talks and I said well yeah I can do that I says what does it pay he says well we had a guy here from storage technology and he charges $8,000 I'm like okay $8,000 eight cities thousand bucks a day if they cover expenses well it's not too bad so I kind of say like okay so it's 8,000 formal I says no that's per city okay calm down what the next words out of my mouth were the following sometimes I go that low I don't know where that came from but I said I can you're a friend I can do it for $7,000 and he said I'll tell you what I'll tell him that you wanted 10 grand I got you down to 7,500 then I'll look like a hero it's like my kind of hero so all of a sudden after 17 years of speaking for nothing I found out that there's a huge value in being articulate by being able to communicate at a level that makes sense to a wide range of audiences and most specifically executive audiences because they don't get it they don't get bits they don't get bites and we lose it in the translation and so I was very fortunate and he warned me he says Mark you do well they're going to keep inviting you back oh no $500,000 in speaking fees later helps Cisco take the $300,000,000 investment and put it into warp speed the first executive seminar we did we got $2,000,000 in sales I said can I get a commission no we're getting a flat rate you know what that play was still pretty good it was hugely successful for Cisco it was hugely successful for me think win-win but you know what go ahead and aim high because if I had sold I wanted $1,000 they'd say now he's not in the right class because now as a professional speaker I do this a lot this is pretty much how I feed my family is getting up in front of a podium I get over these fear of being in front of people because you get over that if you're ever worried about that I was talking to a friend he was like I had to do my talk yesterday I was like all the time he's like your message is important pick someone in the audience if you have to go make eye contact talk to that one person but say what I'm saying sharing for you is valuable you're here because you're looking for something to value that empowers you that keeps you going and that's pretty cool and one of the things I found out about that is you've got to really love what you're doing you've got to be passionate about it if you lose your emotions if you lose that drive life gets very bland because as a kid I always like Mr. Spock he's smart, the scientist I remember sitting in front of the bathroom mirror at the age of nine trying to learn how to raise an eyebrow and the other eyebrow I could never twitch my nose so I knew I wouldn't make it as a witch but I could be a Vulcan and a naming for the acerbic emotionless life state it turns out that if you turn off your emotions you turn off the leverage you have to make changes in your life it's a very powerful thing we guys aren't always very much in touch with our emotions but it's very important because there's a lot of stuff out there and we get excited about things we go, whoa, look at this this is fun hey, this is a great job offer and so you go off and you take a great job offer and then someone else says hey, how would you like to work on this project? okay, that looks pretty good how'd you like that? and guess what? beware of bright shiny objects you never outgrow them they get more expensive they get shinier but you don't outgrow them and so here's the thing you need to have that vision thing again where do you want to go? because while I was doing that three years trying to ramp up to start my own little company I knew exactly what I wanted to do and I had plenty of job offers to go work for other Bellway bandits in Washington D.C. making a little bit more money than I was making to Booz Allen but I wasn't interested I didn't want to go work for somebody else I wanted to run my own business and that focus kept me going and I got it on schedule I started my first business when I was age 29 and I still own the business I also still own my first car okay maybe it's a buffalo thing, a pack rat but it's a cool car and I just finished restoring it it's a 1960 Corvette I didn't sell mine now when I got married that first year the wife said what are you gonna do with that stupid old dumb car why don't you sell them by some furniture? said honey the only reason I would ever sell that car is to pay for a divorce attorney now does that explain how I feel about it? that Corvette rocks I love it, even 25 years later you just get in there you don't even have to drive fast because you figure in today's years that's like buying a 1983 Corvette, right? wrong, there are no 1983 Corvettes it was a trick question but it was 25 years old 23 years old, so anyway you figure a car 85, 84 isn't all that old today but when you get older it's a pretty cool classic and so it's pretty neat so you gotta be aware of that and the other thing is when you pick out your bright shiny objects and you weave your way through that minefield make a choice you see I stayed in the Navy Reserve and I liked it, I had a chance to serve I thought that was very important because I wanted to do something that was bigger than myself and I found out that over the years it's really been important for me because A, it's a chance to give back they gave me a chance I never had that was to go to Northwestern University and go to a real college and get some good education from it plus it was a chance because I really enjoyed working with the people and they get a chance to share and you get responsibilities and they put you in command command is pretty cool it's the best job you can get in the military I've been very, very privileged I've had eight command tours and that is probably why I haven't focused on growing my business because I was getting my leadership fix in the Navy and more importantly, last year or two years ago they gave me a chance to be commanding officer the whole Center for Naval Leadership running leadership training for the whole Navy Reserve 65,000 people that rocks because now you can see all the things that were wrong everything that was screwed up that bugged you and now you're in a position to fix it but you gotta go sleeper for 25 years you gotta put up with the crap you gotta put up with the hassle until you finally get to the point where you're senior than everybody else and say this is how we're gonna do it we're not gonna screw with our people we're not gonna lie to them we're not gonna take advantage of them we're gonna do positive leadership we're gonna make it work and so that to me was really, really important and I thought that was great but the thing was that I tried to do a technology company but I wanted to do the leadership thing but I wanted to do both well the problem is and I talked over to Marcus Random and he'll tell you the same thing you need to make a choice you gotta be tech or you gotta be management if you try to do both it's like trying to like do I take the exit, do I go on this highway do I take the exit, go on the highway all of a sudden, boom you hit that little divide blubububu and all the water and the sand comes out of your stuff so what do we do? my thought was is that hey I love the technology stuff I haven't forgotten it all the principles are the same I was talking to Lost yesterday he's saying okay G-Mark come over here he says what? okay we're like five hours into our contest right now and they haven't figured out this one thing he says what is it? he said well, the clue is is that we gotta go ahead and you have a cryptic field that's immune to frequency analysis what would you think it would be? one time pad he said they've been working five hours trying to solve that in 15 seconds well yeah but you've been doing it your whole life and it's not against anybody else who's spending the five hours to figure it out because I'll tell you what back in the 70s it would have taken five hours to figure it out but once you learn this stuff it's very valuable but the trick is if you learn it but if you can't communicate it effectively to the decision makers who cares? the decision makers so people who got their MBAs which is very useful by the way when I got my MBA you figured okay what's it gonna cost you? $39,000 in tuition this was 10 years ago how long after graduation before I made that much money back? it turned out it was seven months not that I made it in those seven months but I took a job change in the middle I just went back to work for someone for a while negotiated a 50% raise I made 200 stock options at Accent in two years I got 15,000 from Secure Computing and also there was real money and all of a sudden when you add all that up and I was getting a thousand a year from Accent and he said hey we'll give you a 4,000 a year and oh by the way since I joined the company in December I said this year and next year so I got eight grand there it turned out that seven months after graduation I'd recaptured all the money that's a good return on investment and it's also allowed me to go ahead and do the Cisco thing and speak to executives in a plausible meaningful thing where I explain information in terms of total cost of ownership and litigation avoidance and what does it look in terms of asset management all the things that they're gonna make their decision criteria you need to learn that language if you're gonna be effective otherwise we play in the technology area we have a lot of fun with it but we're not able to influence the flow of money or the flow of decisions and so that's a very very important thing to do so one thing I wanna suggest to you is you wanna do something bigger than yourself don't just do it all for you don't just take the money then keep it all give stuff away it's good to give things away people appreciate it you know what it's not all that bad and you find out the stuff you give away if you don't give it away during your lifetime someone else is gonna give it away when you die right think about it you don't live forever unfortunately we got a TTL that's a hidden field in life and for all your lamers out there that's time to live hey number 063 are you here doc he's not awake yet just be glad I wasn't throwing out like a coin or something like that this guy would be suing me any lawyers here okay but do something bigger than yourself and the important thing is here's what I consider an important recipe for life have a vision see how I think again why? vision is important and I'll say Chinese philosophers said without vision the people perish but you could take the word the out of there without vision people perish without vision you perish you don't succeed you don't achieve in life if you're not part of your own plan for life you're part of somebody else's and if you're an employee of a company I ask people I say that what company do you work for how much is the founder that company making from you working for him if you work for Microsoft does Bill Gates make money on you? yeah how hard does he have to work to keep you going? he doesn't be the founder best title to have is majority shareholder because what you're doing is you're building an engine that goes ahead and creates things but creates something bigger than yourself and do it for positive purposes another thing have a plan have a plan to know a strategy to get you there from where I was as a naval officer floating around at sea wondering what I want to do and what the real world's like to then going ahead three years later and having my own business and hanging out my shingle and doing that stuff was because I made a plan I wrote it down I committed to it I executed on that and you got to keep doing it you got to keep updating your plans and you get a little bit lazy about that sometimes and I'll confess I don't have my written plan right now I have what I call a week in the woods and my week in the woods I first did there back in 1987 when I went up to Maine with an older guy in his 50s I said, Mark, let me take you up there and we're gonna go bear hunting it's like, okay says buy it on a rifle it says we don't use rifles we use revolvers so we went down to the store no 10 day waiting period back then picked out a nice Ruger super redhawk seven and a half inch barrel 44 caliber big hunk and gun I said, wait, it's not ready you got to have it magnet ported pretty cool thing a little company cuts trapezoidal ports at the end so a 44 you fire that thing the recoil, you're back here and if you're about as light as I am you're like two rows back but with a magnet port what happens is the recoil the little jet exhaust comes up it counteracts it just comes right back almost like a recoilless rifle so you can stay on target which if you've got a 300 pound bear coming at you a warp nine it really helps you get a second shot off and you get a little scope on there so it looks pretty cool little aim point, little red dot in there ooh, it doesn't project but you see it in there a little swivel because it's five and a half pounds you got to carry it on your shoulder like a rifle and we hit the woods and one week of no phones no fax, no email of course there wasn't a whole lot back then but there was some just time to settle down but more importantly I didn't see a bear I didn't shoot a bear I didn't really want to shoot a bear because they told bears taste pretty lousy they're like greasy, grimy pork but I'll tell you what when you're walking around the woods carrying a 44 instead of a walking stick you're a predator you own anything that moves and you spend a week owning anything that moves trying to think about what you want to do with your life you get control back take that week in the woods shut off the phone don't worry about not getting paid take a week of unpaid leave if you have to if you're not sure where your life is going go out and spend a little bit of time on your own ideally do it with someone a little bit older as a good mentor so you don't have to make the mistakes and figure out where you want to go take that plan then don't take a risk when I started my company I kind of figured, wait a minute I've always had a paycheck and now I got to let go of that paycheck and go start on my own well you don't have one have I ever started a business before? few of us have, okay anybody still in that same business? alright, 1, 2, 3, 4, 5, 6, 7 out of about 300 it's tough high-failure rates what I figured is like it's like holding on to a rope in a totally dark room and someone said let go of the rope and fall to the floor no Lord, I wonder what I'm going to die I'm going to fall and it's going to be crying it's terrible, it's 50 feet it's going to be like that's it that's it you were two inches off the ground the whole time you can always go back to work for somebody else you don't need a factory you need a box of business cards and a laptop and you are in business give it a try if it doesn't work go back and work for somebody but take a risk and you'll find out that once you know that you can survive on your own it gives you an entirely different degree of freedom that most people never achieve in life and then stay focused remember that TTL thing? you don't know how much time you've got keep working on the goal avoid those bright shiny objects what helps you avoid the bright shiny object is that written set of goals that life plan that says I want this not this not that not whatever because there are interesting things out there and like most of us who have ADD in this world of computer security you're very attracted to those bright shiny objects but this helps you stay focused if the bright shiny object is on your line of vision you do it if it's not stay away from it there'll be more achieve your stuff first and then lastly stick to it you will encounter difficulties difficulties are always part of life they're there to see how badly you want something okay, how badly do you want to be in your own business? do you give up when you stop making money? how badly do you want to be in a relationship? do you give up after your first argument? how badly do you want to succeed in life? how badly do you want to make a difference in your life? you want to end up just some anonymous face end up there joining AARP saying I want my free money or you want to be in a position where you're financially independent at that age and you can make the choices that you want and you can create opportunities for others because the company you built created employment opportunities for folks who have families and their kids will be supported for that money they generated from your vision and your idea that made a difference in the world and so when you do all this stuff don't save your best for last you might not get there that's an error I make I figure I got forever most people are more afraid of speaking than dying of course I don't even think about dying but you ought to hey fifty eventually it's going to get you what's your legacy? all the stuff I want to do all the things I haven't written down the books I haven't published yet even though I got the domain name and the ISBN everything else ready to go but I haven't gotten around to it one of these days life's going to come along and say game over just like the little ale tear when they throw the switch all that volatile memory goes away we haven't figured out a way to save you to disk yet and until we do you've got to make sure that you get everything out into the output puffer as fast as you can figure it out and make it count and make it good and be generous now as I said because someone else is going to give away your stuff you can't take it with you no u-hauls behind her at least not that I've seen so have fun with life and uh... one last thought here in the hacker community what I've seen is the biggest disparity of ever run into in terms of intelligence and economic success why is that? this room has some of the smartest people in America actually probably from around the world and yet financially some of the folks out here are destitute and guys that I know barely have any money why? in my opinion it's like a dream anybody remember reading Neuromancer? William Gibson? how do you define the internet? a consensual hallucination probably a good hacker jeopardy final answer a consensual hallucination it's not real did you ever have a dream where you found money laying around? it's pretty cool did you ever wake up with it in your hand? no, it's a hallucination unless you can transform what is in the net into reality it doesn't count it's not the silicon network in life that counts it's a carbon network that counts it's the people in your lives those are the persistent objects those are the things that you need to make sure that you take care of you learn to know how to love to have a relationship to go ahead and make a difference in life because here's a little thought problem for you you need to enjoy life you only get one trip at it but imagine that you can't travel back in time you're not allowed to today but perhaps someday in the future you are here's a thought I'd like to leave you with you come back from 40 years from now and you had one chance to come back at a point in your life the guys around the time machine said well you know we gotta send you back now because you got this terminal illness you're gonna be dead in two days so we gotta send you now we don't have time to perfect the technology so we can get you back to 2008 that's the good news the bad news is you remember none of this you don't have any of the wisdom you don't have any of the memories nothing you've got to do it over again it's a play way of saying at the end of my time but let me finish the analogy it's only one minute longer but all you have is in the back of your mind see that was a time machine just warped you back all you know is you just came back from 40 years from now to here because you had to make a change in your life you knew that this point in life was an inflection point where you had a key decision coming up that if you wanted a little bit different way if you wrote down your vision if you wrote down your goals if you executed your whole life would evolve completely differently so that 40 years from now you're exactly where you want to be your loving life think carefully about what your life is all about what you can do with it and the change you want to make so you can go forward and be successful have fun have great I hope you all live past 50 to 100 I hope this is really half time I'll see you again 50 years take care