Nashville Business Journal, Friday, October 16, 2009, by Linda Bryant
Venture capitalists weren’t interested in funding managed security and network services when Cliff Duffey launched Cybera Inc. in 2001. The company operated for almost two years with minimal income, relying completely on self-financing to stay alive.
A breakthrough came five years later when Cybera successfully raised more than $20 million from venture firms to improve its basic services: designing, installing and maintaining secure technology for the payment card industry.
Cybera makes credit and debt card transactions secure and works to prevent data theft such as the high-profile 2007 TJ Maxx security breach where hackers accessed more than 45 million credit and debit card accounts.
The TJ Maxx incident raised awareness about data security, but the industry is still poised for a boom, said Duffey, who is chairman, chief executive officer and president of the 8-year-old company.
Prior to Cybera, Duffey, 39, was chief technology officer at Bluestar Communications, overseeing engineering, network operations, product development and business development.
“More companies are realizing security is an issue they can’t afford not to address,” he said.
In 2008, 285 million corporate and government records were breached illegally and 98 percent of them were payment card data, according to a report of data breaches sponsored by Verizon Business.
Cybera will grow 20 percent to 25 percent this year, but Duffey expects slightly higher growth in 2010. About 80 percent of the company’s business comes from merchants who want to make sure payment card data is secure. Clients include O’Reilly Auto Parts, Applebee’s, Mapco, Shell Oil, Books-A-Million, Ted’s Montana Grill and Jack in the Box.
Yet, retail companies and restaurants aren’t the only potential customers. Finance and heath care-related businesses are poised for growth, Duffey said.
According to a study by Gartner Inc., a Connecticut-based information technology research firm, corporate spending on security software and services will outpace all other IT expenditures in 2010. Budgets for security software are expected to grow by 4 percent next year, and sales from security services are predicted to grow 78 percent from 2008 to 2013.
Cybera has grown 117 percent since 2005 but only recently became profitable.
“I’m glad we bootstrapped in the beginning because we’re scrappier than we would have been,” Duffey said.
Tony Letts, information security supervisor at Georgia-based Chick-fil-A, said Cybera was able to roll out credit card technology simultaneously at 1,400 Chick-Fil-A locations, provide a card approval turnaround rate of less than eight seconds and give 24/7 support.
“Cybera owned the process from start to finish and required little operational or corporate involvement from Chick-fil-A,” Letts said.
Address: 9009 Carothers Parkway, Suite C5, Franklin 37067
Phone: (615) 301-2040
Revenue: $19.3 million
Local employees: 80
What they do: Cybera designs and implements secure, managed networks for the payment card industry.
TOUGHEST BUSINESS DECISION: Deciding to start Cybera at a time when investors had no interest in network or security companies. Fortunately, it meant that competing companies could not get funding either, so that turned out to be a big risk with big reward.
BEST BUSINESS DECISION: Bootstrapping the company with funding from myself, friends, family and angel investors. This allowed us to build a proven company first, while taking time to find the right venture capital partners.
GREATEST BUSINESS CHALLENGE: Although we have managed to grow at a compounding rate of about 40 percent each year, it never seems to go fast enough.
WHAT SOMEONE ELSE CAN LEARN FROM YOU: I believe that running a high-growth, venture-funded company is one of the toughest career challenges someone can face. There are constant pressures, and you cannot lose focus on your goals or you will immediately start to fall behind.
BUSINESS PHILOSOPHY: I am very passionate about Cybera and our solutions. I am fortunate to have a great Cybera team that shares my passion, and together we can change the way security and network services are delivered to our target customers.
GREATEST FRUSTRATION: “What have we sold today?” I wish we had a great answer to that question every day.
— Cliff Duffey
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