‘The worst thing that can happen is that you learn a lot’

On his website, Sandro Etalle leaves no doubt: ‘I have a passion for entrepreneurship and for computer security.’ As a professor in cybersecurity, he leads ground-breaking research programs. But his eyes start to sparkle when he talks about his experiences in the startup world. ‘Creating your own startup is the best business school you can think of.’

‘In those 10 years of SecurityMatters I’ve learned more than in 30 years of academic work’

The love for entrepreneurship was instilled early on in Sandro Etalle. The native Italian started his first company when he was nineteen years old. ‘Founding companies has always been in my blood’, he states. As an associate professor at the University of Twente, he and two of his PhD students founded SecurityMatters, a company focusing on the digital security of large industrial organizations in, among others, the oil and gas industry, and the electricity sector. In 2014, the company moved to Eindhoven, where Etalle had become professor. In late 2018 it was acquired for 113 million dollars by US NASDAQ-listed ForeScout. By then, SecurityMatters employed about ninety people.

‘At the beginning I thought this is going to be interesting, it is going to be a wild ride. It turned out to be much wilder, much more interesting than I’d expected. It’s like I went through 10 different master’s degrees. In those 10 years of SecurityMatters I’ve learned more than in 30 years of academic work, certainly in terms of variety of topics. I cannot find words to recommend it to everyone more warmly. It’s a rollercoaster, every startupper will tell you that. Having a startup is the best business school you can think of. And: if you manage to be careful with the cashflow, which alas is not always possible, the worst thing that can happen to you is that you learn a lot.’

What do you believe are the main challenges?

‘You have to learn to speak a number of different languages. I always say: the researcher is an artist, driven by the beauty of science, while the entrepreneur is a soldier, who needs to deliver results despite competition. They speak completely different languages. In addition, you have to be able to speak the management language to your employees and the language of the market to your customer. You need to understand everyone in order to be able to make up a mind of your own. In particular, you have to understand your customers, as their needs will eventually determine your success. And in cybersecurity, you must also speak the language of politicians and regulators. It’s fascinating.’

‘The researcher is an artist, driven by the beauty of science, while the entrepreneur is a soldier, who needs to deliver results despite competition’

How do you look at the valorization landscape in the Dutch academic world?

‘Compared to the rest of Europe, we are doing well. If you look at the US, we’re lagging behind. It’s not only a matter of money or politics, but also a matter of ecosystem maturity. We need to have more startups around us; the industry needs to get used to working with small companies. We are

certainly improving the ecosystem, with an increasing number of role models who went through the process and can set the right example, but this takes time. If I look at the situation in the Netherlands right now and compare it to when I started my company, it’s completely different. For the better. I mean: really for the better. The attitude of the universities and markets regarding startups has changed a lot: they are much more open to it. That does not mean that there is no work left to do.’

‘Make sure you master at least the basic rules of this completely new ballgame you are about to enter’

‘In 2008, a startup was still a a strange thing. Few people in the Netherlands would really understand what you were talking about. Now it’s a lot easier to find an ex-founder in the neighborhood you can talk to about your plans. Pick their brains, and find out how they have done certain things. The good thing about this country is that these people are never too far away: you have easy access to them. I do a lot of informal coaching: young people with an idea about a startup come to me, we just sit here and talk.’

Do you see a lot of unexploited potential in terms of academic inventions that don’t make it to the market?

‘That’s a million-dollar question! At the end of the day, the market decides what is and is not going to be successful. The difficult thing is matching your invention to the market needs. It’s a problem of space and time: so many inventions were too early to be appreciated by the market. I’ve seen visionary innovators who didn’t get the appreciation they deserved because they were too early, or too late, or because at the end they weren’t able to bridge the profound gap between their ideas and the market.’

Do you believe PhD students are sufficiently aware that being an entrepreneur could also be a career path for them?

‘To be honest, the majority of PhD students I see is more inclined to an academic career, or a job in industry. Most students who possess the “entrepreneurial gene” start their businesses already after finishing their master’s, or even earlier. If you have that drive, you usually don’t want to wait four more years before you start. In some cases, this is a pity. You could use the PhD time to deepen your knowledge and try and test your hypothesis about what you have to do later, and to broaden your network. I think that the Faculty of Impact is a fantastic program. It’s offering you two years where you don’t have to worry too much about everything while giving you access to coaches and resources. It helps you to adequately set things up and make the right arrangements.’

What would be your main advice to students who are considering to start their own business?

‘Every single startupper, myself included, wants to start working on the product as quickly as possible and typically does not take enough time to understand the legal context they will have to deal with in the future. So: lay the basics! For example: talk to someone who understands IPRs before you go and negotiate with your university. Talk to someone who understands startups before you give away your shares. Make sure you master at least the basic rules of this completely new ballgame you are about to enter. This invariably sounds very boring to the young entrepreneur who wants to talk about the idea, the invention, and the business. But there are so many mistakes you can make in the beginning that cannot be fixed later. The amazing thing is that, while there certainly are lots of sharks around, you’ll also find many people who want to help you. It opens so many doors, you get to talk to so many great spirits.’