Reed Taussig is a digital identity pioneer. He had his hand on the pulse of the computer/internet craze in the 80’s and 90’s and was the first to offer solutions to B2B companies online.
His knowledge, experience, and work helped to shape the internet sector we know today. Here, we learn a little more about who he is, what’s changed, and what we can expect to see in the future of company anatomies and tech.
Can you tell me a little about your history and background?
I grew up in the Midwest and the East Coast, went to college at the University of Arizona, and started my career back in 1977, selling mainframe computers, and check processing systems to big banks. This was when you know, memory was a million dollars and megabyte five-megabyte head protract disk drives were $55,000.
I started my current sales and I went to data Gen and when the mini computer craze came in and then switched to software back in 1987, and ended up here in California. I was Vice President of Worldwide sales and services for a company called Unify and then I became Vice President of Sales Services and Marketing for Gupta which we took public. And then Microsoft really crushed it and I decided to start a company back in 1993-94, called cray.com which was the first b2b company on the internet actually. It was pay and pay for the delivery of sales leads. And we sold that. Then, I got involved as the founding CEO of Callidus Software which did large-scale sales commissions, which we took public in 2003.
And then I did a couple of different things for a couple of venture companies and got involved with another company at the ground floor called Threat Metrics. And we really invented digital identities.
So there are three and a half billion people that use the internet every day, we knew something about 2 billion of them. And it was a very, very successful business. It went from zero to 100 million or more actually 130 million run rate 140 million run rate and then Lexis stepped in.
They were customers of ours and acquired us for quite a bit of money in 2018. Then I went to work for a private equity company for a while as an operating exec and then more recently, I took over at a “spin-out” or carve-out company (Outseer) from RSA.
Outseer is a fully functional company, great exec staff, it’s operating and growing. And I decided that having done that now would be a good time to kind of step back. It’s been a great career. I really enjoyed it–really fun, really interesting.
Why are you passionate about digital identity? What drew you to the industry?
So I was reading an interesting article the other day that if cybersecurity fraud were a nation-state, it would have the third-largest economy in the world $6 trillion, just behind China.
It’s a really interesting space, the whole fraud and security, and identity space, particularly as we’ve gone to a global economy.
For example, Harrods is the number one destination department store in London. It’s also the number one destination for wealthy Chinese online shoppers looking for luxury goods. But if you’re Harrods, how do you identify a person in China as really being that person and not ending up in a fraudulent transaction? So, there’s just a lot of opportunity as the world has gone global.
The opportunity to expand your top line through global sales has skyrocketed as you can see, but also the opportunity to create or commit fraudulent transactions has grown right along with it.
It all really comes down to identity at the end of the day, and if we can prove that you are really you and we can do so in a safe and secure way that doesn’t violate your privacy.
The myriad of regulations that surrounded GDPR, California data privacy is a huge technical challenge. It really is. But it’s also a great service to your customers whether there were those people or merchants or banks or anybody in the payment chain (card issuers, card brands, or the consumer as well) which means that you can shop online and simply open up the world in terms of products and services, knowledge, and experiences that the internet provides. And you can do so relatively securely. So it’s a benefit to both sides. It’s an arms race it never stops.
And Trending Business Models…
Buy now pay later, is a great example of that. 50% of the Australian population has tried buy now pay later… 30% of the UK population.
It’s doubling in popularity here. BNPL has a lot of interesting facts around it or things around it in that you know if you for example if a person doesn’t pay off their credit card every month, and they go out and buy something, an expensive pair of shoes or something, using your Visa, MasterCard or whatever you’re gonna pay interest on that on that transaction.
Buy now pay later says no, you don’t have to do that. We’ll charge you six equal payments. There’s no interest it’s not going to cost you a dime as long as you maintain your payments. That’s a huge affront. I mean, it is to the card brands, Visa, MasterCard, I mean it really goes right to the heart of their business model. It’s really, really interesting.
A lot of the people that are going to use buy now pay later are what are called thin-file customers. People like my daughter who don’t really have a big credit file, don’t own a credit card never has bought anything on credit. Those are called thin file customers and trying to figure out who those people are, is a big challenge.
What recent trends have you seen that are worth noting?
Well, as I said before, you know, identity is really the key–it is the perimeter to commerce. And it’s not just commerce. I mean, as we work from home, for example, really understanding that Reed is who’s logging onto this network means every aspect of our business life.
Even farmers, for example, are connected all of the time for weather issues, you know, their tractors are internet enabled. And soon, by the way, if not already, will end up going self-driving. I mean, that’s an obvious place to do it.
I think that Intellicheck and companies like that, who are focused on identity and who are really trying to push the bounds of identity, they have a permanent place in society. Software lives in dog years, and so there are replacements for the technology, but the requirement the need is not going to go away. As long as a company like Intellicheck, or whoever it might be, continues to invest in science and technology, you’re going to have a business that goes on forever.
I just think that it’s an exciting industry. All aspects of tech are very exciting, whether it’s biotech or tech itself which more narrowly define it. The industry has great career opportunities.
I will say this–and probably at the risk of irritating some large group of people that all of the Harvard MBAs Wharton MBA, Stanford MBAs, whatever, that go off to Wall Street or private equity to move money around–I’d really like to see a fundamental shift of people coming out of school going, you know what, I want to build the next product.
I mean, Elon Musk–as controversial as he is–has recreated NASA, and put the electric car on the planet. I would love to see more of that as manufacturing comes back to the United States due to supply chain problems.
The demand will be there. I would really like to see a shift away from financial engineering, to people actually dedicating their lives to doing things that improve everybody’s life, rather than just move the money around the table.