LapJack’s Marketplace

Marketing Plan

">More Paranoia:

Corrections or additions?

These articles by Peter J. Mladineo and Barbara Fox were published

in U.S. 1 Newspaper on June 10, 1998. All rights reserved.

Batten Down the Laptops?

Up until a year ago Andy Goren, a 28-year-old software

developer and entrepreneur, seemed to have a clear path ahead for

his startup company, TV Objects: the development of a software program

called Applet Designer that enables users of Visual Basic to create

highpowered Java "applets" — the new Internet programming

standard. And Goren’s company was substantially bolstered by an

infusion

of venture capital by another 28-year-old, David Plimpton of Plimpton

& Yang, the venture capital firm at 34 Chambers Street.

But now TV Objects has taken a U-turn. The software product is being

sold, the sales force has been downsized, and the company is setting

its sights on a piece of hardware — a new laptop security device,

called LapJack, now being developed and marketed by a subsidiary of

TV Objects at 600 Alexander Road, LapJack Systems

(http://www.lapjack.com.

But, says Goren, the shake-up is a carefully calculated move. Goren

says that the probable buyer of Applet Designer is Halcyon Software,

a San Francisco Bay-area firm that makes Unix-based applet designers

(TV Objects’ product is for Windows-based machines). "Together

we own the whole market," says Goren.

And, he adds, the laptop security device has the imprimatur of

Plimpton

Yang, the company that originally funded Goren’s software. Still,

the question persists: How could Goren turn his back so quickly on

a software idea that seemed so promising? He has a one-word answer:

Microsoft.

Goren maintains that just about any software application has only

a couple of years of potential profit before Microsoft gets involved.

Then, says Goren, it’s only a matter of time before the Redmond,

Washington-based

software giant starts bundling it free in one of its packages.

"One of the reasons we’re in the hardware business is we want

to stay away from Microsoft," Goren says. "You can dream up

the best idea that ever exists in the world and start coding it. Bill

Gates gets wind of it and he’ll just announce that he’s doing it and

you’re out of business. You can’t do that with hardware because of

the patent on it. There are no patents in the software industry."

With a pending patent, Goren is entering a totally new universe —

and a totally new kind of paranoia — with LapJack. LapJack is

a new encoded security key that plugs into a parallel printer port

on a laptop computer. If a machine is enabled with LapJack it cannot

boot up without the key. It’s similar in principle to a stereo with

a removable face. A thief may successfully steal the laptop, but

without

the key the laptop is completely useless.

Goren and crew have set out to close off all of the possible loopholes

around this system and he insists that the product has not yet been

hacked. It can’t be compromised by booting from a floppy. And once

the LapJack software is deployed on a laptop, that computer’s hard

drive can’t be used in another computer, nor can the hard drive’s

data be reformatted. LapJack puts no demand on the processor or

memory,

doesn’t corrupt data, and doesn’t use passwords. Laptops armed with

LapJack will also come with a sticker with the company’s logo, similar

to the Intel Inside sticker, informing thieves that this laptop won’t

boot up if burgled.

If you lose the key, the LapJack system can be uninstalled by typing

in a long serial number available from a secure LapJack-controlled

site. "For big MIS departments," Goren says, "we’re going

to provide an intranet application that stores serial numbers for

all the keys on a database so you can do a remote recovery of the

computer. That’s the most common question we ever get."

Top Of Page
LapJack’s Marketplace

Goren maintains that LapJack is the first device of its kind on the

market. But does the market need it? Many laptops already come with

password-protected theft systems. IBM Thinkpads, for example, are

shipped with a hard disk password capability that requires the laptop

owner to remember the password forever. If the laptop owner forgets

the password or if someone else attempts to use the computer, the

manual says, not even an IBM-authorized reseller can help restore

the hard drive. (Goren responds that most users never activate the

password and that these software-based solutions can also be

compromised by removing the laptop’s battery.)

How unique is LapJack? It might have some close cousins, but probably

has no exact matches. "There has been some activity to produce

a device like that but it has fallen off in the past few years,"

says Richard Woodbridge, a patent attorney at 22 Chambers Street.

A brief Web-based search reveals a few clunky alternatives (including

an impenetrable laptop case), but nothing that involves a hardware

security that authorizes access to a laptop’s hard drive.

Woodbridge cautions entrepreneurs from assuming that

a unique idea will ultimately ensure a product’s success. "I’ve

seen a lot of great ideas do poorly and a lot of average ideas do

really well," he says. "The high-tech business is very

high-risk.

The success rate isn’t very high, but the few who do succeed usually

do very well." Woodbridge challenges Goren’s fear of Microsoft.

"Companies with small niche products tend not to be victims of

Microsoft," he says. "More often than not it’s the small

company

that seeks out Microsoft and not the other way around."

The leap from developing software to creating hardware that protects

software has cost TV Objects between $700,000 and $1 million so far

(the patent application alone cost $40,000). This kind of spending

is within the realm of possibilities for Goren, thanks to the

involvement

of Plimpton (U.S. 1, November 7). Plimpton was traveling in Japan

and unavailable for interviews.

Then there was all sorts of new endeavors for the company — like

manufacturing leather and plastics. "All these things take a lot

of time and a lot of money," says Goren. "There’s just so

many components to hardware. It’s not like you just make a disk. To

make your own plastic mold is not simple."

Goren set up a partnership with a Philadelphia-based manufacturing

plant owned by Hugo Pena, whose business he hopes LapJack will

eventually

absorb. Goren predicts that the firm will also open a manufacturing

facility in Mexico.

Top Of Page
Marketing Plan

Goren and Stephen E. Johnson, the firm’s 24-year-old communications

manager, are learning that marketing hardware might also be more fun

that marketing software. First, they are targeting original equipment

manufacturers (OEMs) to sell laptops equipped with LapJack. They

signed

one such deal with Twin Heads, the New Jersey-based manufacturer of

Hewlett Packard and AST laptops. They are also close to cutting deals

with Toshiba and Sharp in Japan, through a global business consulting

firm called Japan Trade, which built Lotus’ operation in Japan. Goren

predicts these deals could be completed within a few months.

But Goren doesn’t want to rest the company’s chances on OEMs alone.

Borrowing the state-by-state saturation strategy that Snapple used

to become a household name, sales teams will hit laptop-intensive

areas in the New York, New Jersey, Pennsylvania metropolitan regions.

They will hand out fliers at airports and train stations, such as

the PATH station beneath the World Trade Center in downtown Manhattan,

where laptops are as common as cell phones. "We think that’s where

we need to sell the product," says Goren. "It’s a product

for end users."

One possible source of end-users is Steve Sashihara, CEO of Princeton

Consultants, a firm that supplies all of its 45 consultants with

laptops.

"The notion of a competitor stealing someone’s laptop is

horrifying,"

says Sashihara. "There are a lot of companies that are putting

substantial amounts of confidential information on their laptops.

The machine-supplied protection on laptops is pretty bogus and I think

this product would be useful to a lot of companies." Sashihara

adds that he will consider equipping his laptops with LapJack.

Sashihara also points out one future roadblock for LapJack: While

Windows 95 and 98 are relatively unsecured, Windows NT already has

a built-in security feature for hard drives using its NT file system

(NTFS). This, Sashihara suggests, might not bode well for LapJack’s

future prospects. "On the corporate side, everybody knows you’re

supposed to be using NT," he says. "Three years from now,

laptop operating systems will all be NTFS."

But Goren disagrees: Even NT can be penetrated. "NTSF has much

more security into it, but you can create an emergency recovery disk

and then you can boot up to that partition and get into that

information,"

says Goren. "Hackers can get into anything really."

— Peter J. Mladineo

LapJack Systems, 600 Alexander Road, Princeton

08540. Andy Goren, president and CEO. 609-514-0300; fax, 609-514-1004.

Home page: http://www.lapjack.com

TV Objects Ltd., 600 Alexander Road, Princeton

08540. Andy Goren, president and CEO. 609-514-1444; fax, 609-514-1004.

Home page: http://www.tvobjects.com.

Top Of Page
More Paranoia:

Info Security

Spies who snitch notebook computers may steal valuable

corporate secrets, says Sanjay Kalra, but those who surreptitiously

retrieve marketing data also can retrieve incredibly valuable loot.

Kalra founded his firm Icons Inc. last year, and — with 7 to 10

consultants, all certified information system security professionals

(CISSPs), he is expanding at Research Park.

The loot to which Kalra refers is marketing information. His firm

did one recent security assessment for a package delivery firm.

"They

wanted a third party assessment of how good a job they did of securing

their data, their customer’s data, and the package data."

"The same company wouldn’t have thought about this five years

back," says Kalra, who just turned 30. So much has changed, he

emphasizes, even from three years ago, when "intranet" was

just a buzzword.

"Now everybody wants to connect with their business partner.

Everyone

wants to have remote access to put in time sheets, expense reports,

or meeting minutes. We are moving away from the private networks,

and everyone is jumping on the Internet. The need for data security

has changed. The nature of `private’ versus `open to everyone’ is

merging together."

Born in New Delhi but schooled in this country, Kalra was a math and

computer science major at the City University of New York, Class of

1992. He did network management for Conde Nast, J.P. Morgan, and

Bankers

Trust, before opening his firm last year to do information systems

security: risk management, security architecture development, security

audits, and security staff development.

Because many companies do protect their intranets, notebook computers

are an attractive target. Their passwords, Kalra says, have been found

to be 80 percent crackable. Spies target specific senior managers,

finance officers, and marketing directors "more than you and I

want to admit," he warns. "If you try to go after the same

data in the company’s network, it is not as easy as walking away with

the notebook."

"The data you carry on your computer is very important for most

corporations," he says, "but the extent to which security

is taken is not extreme."

ICONS Inc., 40 Wall Street, Princeton 08540. Sanjay

Kalra, president. 609-924-2900; fax, 609-924-5544. Home page:

http://www.iconsinc.com.

— Barbara Fox


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