The value of being open to serendipity

In the late 80’s I had been introduced to Whitfield Diffie[1] and had several technical discussions with him about how to add data privacy features to an emerging network technology. One resulting technical insight was that existing encryption hardware was not fast enough. After changing employers months later, I send an email to Whitfield, providing new contact information. In his reply, he included an unexpected reference to our earlier technical discussion and mentioned an exceptionally fast encryption chip that had been prototyped by researchers at DEC. I contacted the chip designers and started a conversation with them. In the conversation they unexpectedly offered to give me some sample devices if I had give them a white paper on how I would use them. That led to more literature research, thinking, a white paper, and ultimately, some of their chips in my hand. Months passed by and a manager from the NSA started showing interest in work going on in my lab. We briefed him on things we are doing and some of our ambitions, including the unfunded ideas about using the encryption chips from DEC. In wrapping up our discussion he commented that if someone sent him an unsolicited proposal on our network encryption ideas he would have to take it seriously. So I did some more reading, wrote a proposal and sent it to him. Later he called, saying that he wanted to fund the proposal, but that the work would have to be classified. My employer did not do classified work, so that was the end of our excitement. A few months later a DARPA research solicitation came out that seemed compatible with the basic idea of our proposal to the NSA. I rewrote the proposal, submitted it, and was funded. As we got into the project and had some success in the lab, it began to occur to us that the technology we were developing might have significant commercial value. Then Bill Clinton and Newt became engaged in Federal budget confrontations. The government was shut down while the US was engaged in a military intervention in Bosnia. Under such circumstances, research funding is a low Federal priority. Our proposal success rate plunged. Technology commercialization began to look more interesting. Many discussions with VCs, angels and MBAs followed and ultimately we launched a VC backed spinout company to commercialize the technology. We hit the major marks of startup success: funding, working product, customers, break even cash flow, cash out, return on investment. No-one got rich, but I learned a lot about myself and the world of startup companies, and the product is still made and used by the financial industry to this day to protect financial transactions sent over the public network.

While, I have always been one who tries to think ahead and plan in life, I know unexpected events will occur with both desirable and undesirable outcomes and implications. A chance comment from a co-worker ultimately lead to getting, at the time, the world’s fastest encryption chips. Subsequently a chain of accidental events that lead to a startup company and many years of working in the field of information assurance illustrate how serendipity played a substantial role in defining my career path. Planning is good, but I have learned that it is perhaps just as important to be open to unexpected opportunities and assess how they may or may not represent thresholds worth crossing.

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[1] Whitfield Diffie is the co-inventor (in unclassified research) of the concept of public key cryptography, one of the cornerstones of data encryption and key management methods.

Sink or Swim

Two summers back, over a lunch conversation, I was asked about my thoughts and emotions during the 2008-9 stock turn down. I pondered his question and a childhood incident came to mind, something which I had not thought about in decades. At about age 6, my family went to a group picnic on the 4^th of July. At the picnic site there were row boats, tied to a dock, that we kids were playing with. At one point, I was alone in one of the boats and another kid pushed it away from the dock. The tether came loose from the dock and the boat drifted into the open water. I recall vividly my fear and feeling the impulse to jump overboard. Just as vividly I recall realizing that I could not swim, and that jumping in was not a good idea. So I stayed in the boat and adults soon intervened, bringing me back to shore. I relayed the memory of this incident to my lunch host. I told him that the impulse to sell everything in the bear market was great, but that as a long term investor, I actively choose not to follow the impulse.

Not jumping from the boat on the 4^th of July as a child, is the earliest time I recall exercising a trait that has evolved to part of a philosophy of adult life: I try to understand my emotions and impulses, and where they come from, but I seek to make my decisions on the basis of reason. That process of reasoning also needs to take into consideration an understanding of my emotional needs. It’s what I did in 1987, 2001, 2008 and during many other, non-fiscal moments of passion in my life. Post script: not long after that childhood incident, my parents enrolled me in Red Cross classes and I became an excellent swimmer.