At a time when most executives are struggling to make payroll, veteran entrepreneur Jeff LeRose is having fun.
A year after selling his company Research Triangle Commerce to publicly traded Internet Commerce Corp. in a cash and stock deal valued at $19.5 million, LeRose moved on to found his seventh startup Research Triangle Software, last November. Yesterday, he threw a news conference to launch the fledgling concern’s first software product CrytpoBuddy.
The quirky event featured Research Triangle Software’s raccoon mascot CryptoBuddy, his sidekick Privacy Pup and CryptoBuddy’s guardian the Princess of Encryption. LeRose, who also sits on the board of advisors for both Southern Capitol Ventures and the Love School of Business at Elon College, provided a product overview of the encryption software, while 40 attendees snacked on Crypto Cookies and milk.
Local Tech Wire caught up with LeRose to talk about the launch of
CryptoBuddy, the encryption market and why a depressed climate is actually a good time to start a company.
Prior to founding Research Triangle Software, you were the president and founder of Research Triangle Commerce. What was it like starting a company in this climate?
I love this climate. This is the best time to start a company, when
everybody else is depressed and downtrodden. It moderates your expectations. What you want to do is try to have some fun and start a company. You get access to great people at reasonable prices. You get access to a lot of things you wouldn’t normally get. You build in a financial discipline that you normally don’t build in good times and you position yourself so that when the economy does turn – and it always does – you can take advantage of it.
You do, however, have an advantage that most startups don’t, capital.
There’s nothing wrong with that. Let’s put it this way, I’m having fun.
You launched your software CryptoBuddy this morning with a news conference. Why did you choose to throw a big media event?
Our approach is that in today’s market you have to draw attention to what you do to get coverage. In this marketplace, it’s really difficult to get attention in the commercial market. Since we ‘re targeting home/family-type use, we decided to demystify encryption and be educational in nature. That’s why we have a raccoon mascot. We did a fairly substantial amount of market research on how to launch.
You said in a statement that you view CryptoBuddy as encryption software for those who would not normally use it. What do you mean by that?
Most of the normal, home-PC users don’t have a clue about the encryption packages out there. The packages that are available are relatively complicated to use and they tend to be confusing for most people. So what we did is take a similar approach to [the adoption model of] Adobe PDF. You get an encrypted message, you have a reader and it’ll uncompress and decrypt foryou. It’s one dialog box and it’s very fast and easy to use.
If I have a Word document that I want to send to you using CryptoBuddy, what would I do?
You would have one dialog box that asks, “What file do you want to encrypt?” Don’t forget, CryptoBuddy works on your computer so you’re taking a file that’s on your computer. You compress and encrypt it and put it back on another directory in your computer. And when you want to send it somewhere, you’ll attach it to an email. You’d then click on the file, click on where you want to put it, put in two security passwords and click on translate.
How is CryptoBuddy different from free encryption and compression software that’s already available?
You’re talking about PGP and those types of things?
[Those products] try to interface into your Outlook or other things. They tend to be a lot harder to use and confusing, and tend to have the potential to screw up your system.
Does it matter what operating system you’re running?
No, it works on anything that’s Windows right now. We’ve tested in on
everything from Windows 95 to XP.
Does it run on a Mac?
It will not run on a Mac or Linux right now, but that’s under the covers. We’ll also have a business version later this year.
Is this proprietary technology, or have you all developed a friendly interface for existing encryption and compression technology?
It’s based on the Blowfish algorithm, which is a public domain method of calculating encryptions. But the application of that algorithm is proprietary to any package using it. It’s an easier interface. We have our own compression routines and implementation.
CryptoBuddy is a mass-market product targeted at consumers. How will you market it?
Basically through merchandising of CryptoBuddy stuff and downloads from Websites. Plus we’re doing some advertising and a lot of guerilla marketing.
How much does Crypto Buddy sell for?
When it sells, it’ll sell for $29.95. You’ll be able to download a [free] version of it this year to encrypt and decrypt. You’ll always be able to decrypt, because like I said it’s a combination of a WinZip and PDF model. But if you want full documentation and README files and a couple decoder rings and disks, then it’s $29.95.
What appealed to you about the encryption market?
It was kind of opportunistic. The fellow who was working on it for years is someone I’ve known for 12 to 15 years. He had done work for me previously and we got to talking about it. He had the basic program pretty well laid out already and we started looking at it, and I was impressed with how fast it was and how simple it was. We decided that it was probably the right timing for the marketplace.
Do you think encryption is currently overlooked by the mass market?
Definitely. Like I said we’re taking this educational and demystification approach because we think it’s something that people need to know about, and we’re making a fun simple way for protection of their files.
The encryption software is just one part of RTS, right? What else does RTS do?
We do some e-commerce…related education. We also have another software product that’s going to be coming out which relates to e-commerce standards.
When will that launch?
We’re working on it. I hate to ever give a launch date, but it’ll be this year.