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Evolving to a Zero Trust Digital World

There is an evolving network security approach called a Zero Trust Network that when abstracted seems like a way to think about digital interactions.

One definition of a Zero Trust Network is as follows:

Traditional network security relies on a secure perimeter.  Anything inside the perimeter is trusted, and anything outside the perimeter is not.  A zero trust network treats all traffic as untrusted, restricting access to secure business data and sensitive resources as much as possible to reduce the risk and mitigate the damage of breaches.

Zero trust network security operates under the principle “never trust, always verify.”  Users and network traffic are treated as if they’re operating in the open Internet, where a bad actor could be listening in or impersonating a user to gain access.  Network traffic is encrypted to minimize the risk of interception. Attempts to access a sensitive area of the network from another area are screened as if the person (or app) trying to access the network is untrusted.    


Never trust, always verify.  It sounds like a pretty miserable way to go through life.  Many of us live in a “trust but verify” mode in the physical world and in our in-person interactions.  Frankly, it is rare that we have dealings with people who are completely unverified.  You go to a party at a friend’s house and you meet someone new.  Well, your host or someone at the party knows him.  If you want to know more about him, you ask others.  If no one knows him, a red flag goes up.  If we meet an entrepreneur, most often someone in our network knows her or we were likely introduced to her by someone we trust.  That’s business.  Even then, before we give her money, we do a reference check and a background check.  Trust but verify.

In the digital world, we get exposed to so many more people so much more frequently.  Trust is a harder and harder thing to expect.  For example:

  • What percent of your emails each day come from people and sources you do not know?  How careful are you about which ones you open and which ones you discard immediately?  How many obvious phishing emails do you receive each week?   How often do you get an email that looks to be from a known contact that turns out to be phishing?  How many of these do you miss?
  • How many of the LinkedIn invitations you receive are from people you really know?  Do you only accept the ones from people you know well?  Do you assume that someone who has 10+ common connections to you is a legitimate person to add to your network?  Do you think your connections use a high bar in screening their connections?  Many people accept every invitation they receive.
  • The news is full of reports of Russian manipulation of accounts and news on Facebook, terrorist cells on Twitter, and the creation of fraudulent “trusted personas” on LinkedIn by foreign scammers.

One of our investment theses at Osage Venture Partners relates to zero trust enterprise solutions and the identification of specific enterprise data that requires a higher level of security.  Recent investments include AppBus, a unified endpoint security and management solution that is built on top of a zero trust model architecture, and RiskLens, the leading provider of purpose-built cyber risk quantification solutions that enable business executives to focus security efforts on areas of greatest vulnerability.

Beyond pure security-focused investments, zero trust feels like a concept that will penetrate most digital interactions and will open up a whole new set of business models and business ecosystems.  I think we will see a Zero Trust concept taking hold in a number of different areas.

  • People will require a much tighter screen on emails and will only allow truly verified emails to be received.  New emails will go through a multi-stage verification process
  • Multi-factor authentication will become the norm and this will continue to evolve.  All of us will find logging into work networks to be more frequent and more time consuming and increasingly requiring advanced technologies such as facial recognition or behavioral pattern tracking.
  • People’s networks of relationships in social media will tighten and new distinctions will be created for a small set of truly trusted relationships.  LinkedIn needs to add a new classification of someone as “someone I can vouch for” or “someone I trust and respect”
  • New technologies will emerge that will create an increased number of walled gardens of constant verification.  We will elect security over web freedom in the next wave of the internet evolution. 

We are surrounded and under attack by brilliant criminals who roam freely in our digital world, just waiting for us, or our families, or our co-workers to make a mistake.  If this many criminals came into our neighborhood each day, we would move somewhere else.  Most likely into a gated community.  We are entering the zero trust digital age, and soon all of us will choose to live (personally and in business) in internet gated communities.  It’s an increasingly dangerous world beyond the walls. 

At Osage, our investments in AppBus and RiskLens are aligned with this Zero Trust theme.  We expect these may be the tip of the iceberg.


Beyond Talent

I was in a board meeting with a new portfolio company yesterday and they started the meeting with two slides that they use to start every meeting at the company.  The first slide was a simple values slide.  The second looked much like the picture below.


This list was initially written about athletes but it relates to many things we do – from how we work, to being a parent, to managing key relationships in our lives.  The list has been all over social media and I may be one of the last people to see it but frankly, I just like it.

Many of these behaviors are correlated.  They have to do with doing more and doing it with energy and not expecting the world to be handed to you on a silver platter.  There is an X-factor when I meet a really impressive entrepreneur.  This X-factor is made up of many of these characteristics.  Great entrepreneurs have the energy, passion, and attitude to lift up and motivate a team.  They have the drive seen in work ethic, effort, doing extra, and being prepared.  They present themselves well – show up on time, are prepared, and their body language maps to their attitude.  And they are coachable and open to advice.  These are people who lead others to do the impossible against great odds – and those are the people who prove to be great entrepreneurs.

Lou Adler is author of a best-selling book “Hire with your Head” which I feel is one of the better books on how to create a consistent corporate hiring methodology.  In it he talks about the best hires being the ones who combine talent plus energy but also how he prefers energy over talent if having to choose:

“We’ve all met people with great talent but little energy. Sadly, they never live up to their expectations. Others of average talent, but with extraordinary energy, often achieve success beyond all expectations. That’s why self-motivation is so important.” 

 Lou Adler, Hire With Your Head: Using Performance-Based Hiring to Build Great Teams

So – this list of ten traits may be quickly becoming a cliché, yet being reminded of them occasionally is a good gut check.  Think of them when hiring people or when backing an entrepreneur or when assessing your own behavior in a meeting or in your life.



Seller Beware

Term sheets and letters of intent are non-binding except often for confidentiality clauses and lock-ups.  This means the buyer can walk away – for any reason.  Remember this and plan accordingly.

In a venture capital situation, it is important to understand if you are receiving an early diligence term sheet or a late diligence term sheet.  By the way – it should be pretty clear.  Have you met the full partnership?  Have the investors called customers?  Have you done a deep dive of the financial statements or financial model?  Has there been deep technology diligence?  Has the fund introduced you to other of its CEOs so that you can do your own diligence on the fund?  If the answer is “no” to most of these questions, then you are pretty early.  If you haven’t met the full partnership and the investment committee hasn’t blessed the term sheet, then you could be on shaky ground and you are relying on the gravitas of the person leading the deal.  If customer and technical diligence hasn’t been conducted, then again, there is some way to go.  Some firms will honor 99% of term sheets issued as long as you haven’t stretched the truth on key facts.  For other firms, it can be less than 50%.  As an entrepreneur, when you sign that term sheet, you want to have a sense of where the investor is in their process, what still needs to be done on diligence, and what are the likely odds of closing.  If you are stopping discussions with other investors in order to sign a term sheet, you want to make sure that the firm you are signing exclusivity with for the next 60 days has not simply lobbed in the term sheet to lock in what may or may not be a deal they want to do.

In an M&A situation, it can be even worse.  You may have the deal signed, you may have the blessing of the CEO of the buyer.  The business unit, corporate development, and legal may all be on board yet sometimes that isn’t enough.  CEOs get fired, quarters get missed, boards of directors say no.  Suddenly what looked like a smart deal is put on hold.  If you are a strong company, going like gang-busters, lots of cash, and plenty of options – then this is an annoyance.  If cash is short, things are being held together with band-aids, you have been holding off cutting costs because “the buyer wants the team”, and your investors are done – then having a buyer walk away can bring on corporate cardiac arrest.  And when it’s not because of what you have done but because the buyer’s own house isn’t in order, there is nothing more frustrating. 

When I was running Verticalnet, we got left on the altar.  Press releases were written, post-acquisition employment agreements were done.  The deal was supposed to close on Wednesday, but at the Monday board meeting, the buyer’s board said “no”, because the team had failed to meet integration targets on several past acquisitions.  We were stretched at Verticalnet.  We had racked up hundreds of thousands of legal and accounting expenses.  We made it through, but it wasn’t pretty.  Fifteen months later we found a better home with a better buyer and the story for the buyer and seller and for the Verticalnet team and customers has been a good one.  But we were lucky. 

When we went through the process the second time, we made sure the board of directors of the acquirer was bought in.  We understood their process and their intent and we also had a better understanding of why we were the perfect fit.  Much of this was uncertain with the first buyer.

Bottom line:  There are things you can do to increase the odds of a deal closing – in raising venture capital and in selling your business.  But you can’t get the odds to 100%.  Even if you do everything right – different buyers behave differently. 

Seller beware.


Ben Franklin Technology Partners Needs Your Help

Ben Franklin may have said “a penny saved is a penny earned,” but if the choice is between giving money to Ben Franklin Technology Development Authority or taking away 50% of their funding as the current PA budget proposes, then his quote should be restated as “a penny saved is a penny not invested and not simultaneously driving returns, creating jobs, and fostering an innovation culture in Pennsylvania.”

Ben Franklin has been one of the longest running and most successful state-sponsored seed investors in the nation and has been an example for many other states.  At Osage Venture Partners, we work closely with Ben Franklin Southeastern PA, where I am on the Board of Directors and where Sean Dowling is on the Technology Advisory Committee.  We also see the impact the other three Ben Franklin regional efforts have in their geographies across Pennsylvania.  The basic fact is that almost every successful technology company that has emerged from this region of PA has had the support of Ben Franklin early in their funding cycle.

WHAT CAN YOU DO?  Read the note below, click on the link, and seamlessly tell your state legislators how important Ben Franklin is to the region, to the state, to innovation, and to our future.  Let’s not harm things that are working and let’s focus on fixing things that are broken.  PLEASE ACT NOW.

As Ben Franklin once said:  “Without continual growth or progress, such words as improvement, achievement, and success have no meaning.”


Dear Ben Franklin community,

As an advocate of Ben Franklin’s work in stimulating the growth of the innovation economy of Greater Philadelphia, we’re calling for your support.

The latest proposed House of Representatives version of the Pennsylvania state budget contains a 50% reduction in funding to the Ben Franklin Technology Partners for fiscal year 2018. This follows a 50% budget cut the Partnership sustained in 2008, that has never been restored. The proposed allocation would mean that each of the four Ben Franklin Technology Partners would receive $1.8M in funding for company investments and support of our innovation economy.

We are calling for your help to ensure that Governor Wolf’s proposed allocation to the Ben Franklin Technology Partners is restored to $14.5M. Your legislative members need to hear from you—their constituents—about the value of Ben Franklin to you, to Southeastern Pennsylvania’s emerging technology sector and to the ability of Pennsylvania to compete in attracting talent in a changing economy.

We’ve provided an 
automated tool for sending emails to your PA legislators. Just plug in your contact information and click send to forward the pre-drafted message to your legislators, or edit with your own thoughts and words. 

Let Harrisburg know that full funding for the Ben Franklin Technology Development Authority through the Department of Community and Economic Development is the smart choice for Pennsylvania’s future. Please contact your legislators to urge them to restore the BFTDA line item for DCED to $14.5 million.

It is the support of leaders like you that have made Ben Franklin one of the most consistently successful engines for economic growth in Pennsylvania’s history. Yet without enough fuel, no engine can achieve its progress.

Your Partners with a Purpose,


Technology Innovation Along the Education to Employment Pathway - Part III

This is Part III of a series of posts related to how technology is enabling a re-imagination of the education to employment pathway.  Part II highlighted a few companies redefining to how skills and competencies are developed by both educational institutions and employers and discussed new delivery models for that content.  This final part of the series will touch upon how employers can create feedback loops to the educational system and how to create a more efficient process for matching an individual’s skills and competencies with job requirements that move beyond previous experience and a college degree.

Employers are increasingly partnering with educational institutions to leverage their content expertise to build more effective professional development programs.  One of our companies, ExecOnline, partners with executive education programs at top business schools like Columbia, Berkeley, and MIT to build online programs in strategy, innovation, operations, and leadership based in part on employer input that include a capstone project oriented around delivering real business impact.  ExecOnline then sells those programs to corporations, targeting the “missing middle” of managers and VPs that are too senior for programs from Skillsoft or Pluralsight, but also too large of a population to receive the expensive development initiatives targeted at senior management.  Starbucks made headlines a few years ago by announcing a partnership with Arizona State University through which all Starbucks’ employees would receive full tuition toward a full year online degree, committing to more than 25,000 graduates by 2025.  Guild Education is a startup that has partnered with employers to offer “education as a benefit” to employees, working with companies like Chipotle to offer employees guidance on how to best leverage the educational system to advance their careers, and WorkAmerica seeks to establish itself as a bridge between employers and community colleges so that graduates are prepared to enter the workforce after graduating with an associate’s degree.   

To help inform the design of such programs, employers are increasingly applying technology to analyze both the current skills of their employee base and the competencies required for success in certain jobs and the combination of experiences and training to design career paths that will set up the individual and organization for the future.  Comprehensive talent management platforms such as Workday and Taleo have become standard practice for large corporations, while a multitude of startups have developed solutions to track and manage training and career paths such as Axonify, PerformYard and a small investment Osage made last year into a company called BetterSkills

As the value of the primary tools for connecting education and jobs, namely a bachelor’s degree and job posting, evolve to incorporate competency based approaches, new technologies will be required to more efficiently match individuals’ skills with the jobs of the future.  Startups such as Credly and Degreed, together with the MOOCs, have begun to design credentials and micro-degrees that are meaningful to employers, while Portfolium provides students with the opportunity to create competency profiles by uploading papers, problem sets, and presentations that can demonstrate specific skills.  These companies aim to establish themselves as a trusted authority that can validate the quality of a competency based program or course or verify an individual’s competencies, a growing market need given the potential abuse of the system that can arise from this proliferation of credentials, something we at Osage have experienced first had as we have found several entrepreneurs or job seekers highlighting their Harvard “degree” that the small print reveals was a week-long online course. 

LinkedIn is perhaps the best positioned company to take advantage of this evolution of the education to employment pathway.  With data on the skills and experiences of millions of individuals, a deep understanding of what employers are looking for through its recruiting solutions, and now, with its acquisition of Lynda for $1.5B in 2015, a platform to deliver compelling training content, LinkedIn is uniquely able to make potentially lucrative recommendations to both learners and employers on how to match the right people with the right jobs.    

As we at Osage look to the future, we see numerous investing opportunities along this education to employment pathway, from continued innovation in how content is designed and delivered to a rethinking of the hiring process to better identify the required competencies and screen applicants for them.  We are therefore encouraged by the possibilities of automation to free human capital from rote and manual work to become more creative and enlightened and deliver the next wave of innovation, enabled by systems that promote lifelong learning.  There is data to support this optimism.  As the McKinsey study noted, previous technology shifts have resulted in massive transitions of the labor force; in 1900, agriculture represented 40% of US jobs, which has fallen to 2% today, while manufacturing represented 25% of US jobs in 1950 and fell below 10% in 2010.  The Economist noted that barcode scanners increased the number of cashiers and the number of bank tellers has grown since the introduction of ATMs, while McKinsey also cited a study in France in 2011 that suggested that for every job that had been lost in France as the result of the advent of the internet in the previous 15 years, 2.4 new jobs had been created.  To realize its full potential and minimize the possible downsides, the age of automation must be partnered with a similarly transformative rethinking of how to develop human capital, and technology will undoubtedly be at the center of that transformation.  At the same time, a number of questions emerge as both a citizen of this new world and as an investor hoping to identify the next wave of innovation.  Who ultimately bears responsibility for retraining the workforce – Individuals? Companies? Society?  (Singapore, for one, has identified a societal need and begun to provide a universal stipend for all of it citizens to access lifelong learning courses).  Where will the value accrue to address this massive need, to the developers of the educational content or the platform for distribution?  Regardless of the answers, there will undoubtedly be a wave of innovation, with technology at the core, all along the education to employment pathway, and we hope to capitalize on this massive market disruption, and at the very least, make investments that will help retrain us when algorithms eventually take our venture capital jobs.