Lookout CEO Dolce on Boston Office and Why Hardware Is "Thing of the Past"

Jim Dolce was last seen in these parts at Akamai, which bought his previous company, Verivue, in late 2012. Last March, he shipped out to San Francisco to become CEO of Lookout, a seven-year-old mobile security company.

That’s the same Lookout that said last week it had raised a $150 million growth round from the likes of T. Rowe Price, Goldman Sachs, Morgan Stanley, and Bezos Expeditions. Add to the mix returning backers like Mithril Capital Management, Accel Partners, Khosla Ventures, and Andreessen Horowitz, and that’s one heck of an investor syndicate.

The problem Lookout is trying to solve is simple and ubiquitous. The company’s app guards smartphones against security breaches and threats. The 250-person company says it has 50 million users—all consumers for now—but it wants to move into the enterprise market and start making big money in the era of “bring your own device” (BYOD).

Dolce is a Boston-area native who formed four companies in the area over 20-odd years. He’s learned a ton from his previous ventures (more on that below), which include Verivue and Unisphere Networks; the latter was backed by Siemens and bought by Juniper Networks for $585 million in 2002.

So perhaps it’s no surprise that Lookout is opening a new technology development office in Boston’s financial district. It will be the company’s biggest tech center outside of its headquarters in San Francisco. Dolce says the 16,000-square-foot space is equidistant from North Station and South Station, so it’s commuter-friendly for most of the Boston metro area. The plan is to hire up to 50 employees in engineering, sales, and marketing over the next year and a half.

“For these very specific technology areas, it’s not easy to hire,” Dolce says. “We believe it will take us that long to find the specific talent we are looking for.”

So why Boston? Dolce says Lookout also considered New York City, Seattle, and Austin, TX, as locations for its satellite tech center. After a “thorough analysis,” he says, New England won out because of its “incredible academic institutions” and “vibrant startup scene.” (It might also help that Dolce, a University of Rhode Island grad, maintains a residence in the Back Bay.)

Lookout’s software straddles the fields of mobile, security, cloud infrastructure, and big data. And Dolce singled out the last of these as a major strength in Boston, pointing to research in machine learning and predictive analytics at institutions like MIT. Those technologies are key to Lookout’s approach to identifying mobile-security threats like malware and tracking what apps are doing with a user’s personal information.

I asked him for his overarching business lessons from Unisphere, Verivue, and the big companies he’s worked at. “Innovation changes very fast. You really have to stay in front of the change to the extent that you can,” he says.

Take software versus hardware. Both Verivue and Unisphere depended at least in part on a hardware business model that Dolce says is now obsolete. Arguably that model caught up with Verivue, which raised at least $85 million before selling to Akamai for an undisclosed price.

“Hardware is a thing of the past,” Dolce declares. “I was talking to a young, budding engineer—he was looking to go to engineering school, and wanted to do hardware. I liken that to being a captain of a steamship. Technology is all about software now. Everything works on a standard server. It’s all about software and apps.”

But what about the hype around connected devices, the Internet of things, and the rise of cheaper and faster hardware supply chains? “I’m referring to custom hardware, deployed for either enterprise or service provider technology,” Dolce clarifies. “Everything is moving towards a software-based model. Yes, we’ll still have those handheld devices, which by the way are single-chip devices.”

Dolce harkens back to Boston’s minicomputer heyday of the 1970s and ‘80s, when Data General, Prime, DEC, and other “companies whose names have faded into the past… all tried to outdo each other with hardware. That model is gone forever,” he says.

Now Lookout represents the new breed of lightweight software for the dominant computing device of our era, the smartphone. It also represents the sum of Dolce’s tech experience, in that he has evolved personally from selling networking hardware and software to purely mobile software.

Will mobile security be a winner-take-all sector? “I think a winner will take much of it,” Dolce says. “The industry is trying to get to a point where there are fewer apps that do more.” So the race is on to be the one security app that consumers and corporate workers put on their phones.

Of course, he is positioning Lookout to be the winner in this crowded market. “We intend to provide all types of security, not just anti-malware,” he says. “The guy who has the app loaded on the phone, that’s valuable real estate in a market where there’s no more land left.”

As for securing people’s mobile devices and apps versus networks and databases, take it from a networking expert when he says, “In security, the endpoint is the most important point.”

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