How a Prime Minister & the NSO Founder Built the World’s Fastest Growing Cyber Company | Invested

Thanks for inviting us.

Thanks.

Maybe I can start with that. It's an interesting story because it was more or less by accident, to be honest. So I spent most of my life in politics. I left politics 3 years ago and started to work, like many former politicians, as an adviser in the US and done a lot in Abu Dhabi. And after some time, I had the feeling that I should start something on my own again, something more than just advising others. So I thought it's a good idea to travel around a bit in order to meet potential partners to do something together with. So I started to go to a few places in the US and then of course also in the Middle East, to Tel Aviv. A friend of mine told me he has a huge network in Tel Aviv. He will arrange me two amazing days with everybody from the tech scene and all the interesting ventures and the big Israeli companies. So I went to Tel Aviv, arrived at the airport and thought it will be a busy program and two exciting days. And then when I arrived, he texted me, 'I'm so sorry. My wife is in hospital. I cannot come to the airport. I cannot take care of you, but I sent somebody to pick you up.' I was looking around. So Shalev Hulio looked at him. He looked at me. I said, 'Hi.' He said, 'Are you Sebastian?' I said, 'Yes.' He said, 'I'm here to babysit you.' And I went with him to his car, entered his Land Rover. We drove to the city, didn't talk that much for the first few minutes because he was always on the phone. I was not sure what he's doing besides driving me around. The taxi driver with a Land Rover, it's not what you say. I was not sure what he's doing when he's not driving me around. So we had a first few meetings and everybody was super respectful. All these other ventures knew him. And then I asked him, 'What exactly are you doing?' And he said, 'Ah, you don't know? I am the founder of NSO. I invented Pegasus.' So I had no experience with Pegasus before because Austria is a small, peaceful, neutral country. There's not a lot of experience with offensive cyber or products like that. So I didn't know a lot about Pegasus, but to be honest, after the first few minutes of conversation, I had a click moment with Shalev. So it was two good days. It was very impressive what I saw. All the meetings were amazing. But after the two days, I told him, 'Look, Shalev, I didn't know it in the first moment when we saw each other, but I immediately had a click moment when we started to talk and when we started to spend time together. So what I would really like to do is to do something with you, but I don't want to do offensive cyber.' And he looked at me and said, 'Oh, I'm the founder of NSO, so what do you expect from me?' And I said, 'Look, if there is one moment in your life where you think you should do something else or you want to do something else, give me a call. I was prime minister, now I'm not anymore. So probably your life is going to change as well.' And then a few months later, when he left and sold his shares, I was literally the first one who he called. He said, 'Do you still want to do something?' I said, 'Of course.' So we met again and then it took us a few months, but after a few months we started Dream together.

I don't know. I think there are different types of politicians. There are some who stay in politics their whole life. I think there are also some who do something entrepreneurial definitely. There are few who have been quite successful in the private sector as well before politics or after politics. But I don't know if there are many who ended up in tech. But next time when we meet, I will tell you. But by the way, I think that there are not many leaders of countries and politicians that left politics at 35 years old after two times being prime ministers. So I think that's one of the reasons. I think you see a lot of politicians advising to companies, sitting on a board or advisory board, but not really as a full-time founder in tech companies, which I think is unique. But I think our entire company is a bit unique in that essence, in the vision, in the goal, and what we're trying to do. So we both are not the trivial founders of a tech company.

Nope.

I think it'd be interesting for people. And do you know what I met him? For me, he seemed to be so educated on cyber that for the first few months, I always believed that he is from 8200 or something like that. It took me a while to figure out that he studied law. But I think the amazing thing about Shalev is he really is a genius. So he's somebody... And I learned that in the first few days when I met him and after a few years now, I have the same impression. So he's somebody who really wants to put the team to the limit. So whenever somebody says, 'I don't think that this is doable' or 'That doesn't seem possible,' that's where he gets really thrilled to deliver it. So I think that's the reason why he was able, in the days of NSO, to build something where everybody said it's impossible. A zero-click. And I think it's very similar now in Dream because when we started and asked around, a lot of people told us, 'Not sure if that's going to work, if that's possible to build in the way you want to build it.' So this is, I think also without a background in 8200 or some of the other units, that's what really makes the difference.

Sure. So I didn't come from 8200. I was 5 years in the army. I was commander in the search and rescue unit. So I participated in most of the search and rescue delegations of Israel around the world, from Haiti to Nepal to Mexico, Brazil, you name it. Also here in Israel. For those who don't understand the reference, like when there was the earthquake in Haiti and Israel sent a team to Haiti to get people out of the rubble, that was there. So I was on that unit and in many other places as well. I think that this unit is like the essence of the good things that Israel has. Israel sends delegations to places that we don't want anything in return. Sometimes it's places that nobody else reach or care about. And we were the first delegation that arrived to Haiti. They have 400,000 missing people, eventually dead. And Israel was the first one who sent a delegation that actually came and rescued people from the wreckage. Same goes for Brazil and Nepal and many other places around Surfside or Miami. When the building collapsed. Exactly. I wasn't there, but yes, the team was there. So yeah, it's an amazing unit. And even to Turkey, when there were times of clashes like diplomatic clashes between the leaders, when there was humanitarian aid needed, Israel sent delegations over and over again. So I think for me, this unit assembles what's great about Israel. Somebody needs help, Israel is always there to help.

Mediaand. A terrible name for a company. Media and, like A and D.

So we wanted to develop a platform that you can basically get information and purchase anything you see in a video content. So if you see a video and you like the shirt, the sunglasses, the watch, you can basically click on everything and get the information and eventually purchase it. It was before Netflix and before Hulu and it was like on 2006. So set-top boxes and things like that. Benchmark was one of the investors.

No, no, it was Ellie.

It ended up in 2008 when you had the big economic crisis. The great financial crisis.

Yeah. Small amount, but investing.

I went to Commonty right in 2008, right after Mediaand. Commonty was a company that developed what the remote desktop for mobile, if you want. So it was the new era of smartphones. Symbian and Blackberry, just a bit before the iOS was launched but not very only in the US. So people basically had an issue with the new smartphones. So you saw a huge increase in people calling to the support center and asking how can I fix this and that. And I had an idea: why, like in computer that you can do remote desktop for computer, why you can't do this for mobile devices? And we used to call that Citrix for mobile. And we were actually the first one who founded a company like that. We wrote the patent, still all the patent for that, and we recruited the team, raised money, and the company was very successful at the time. And the business model was just selling it to mobile carriers around the world and just help them with doing better call centers and support service to their customers. And from that basically was the foundation of NSO.

So as you said, I didn't come from pure signal intelligence or cyber background in my background. So I didn't know much about this world. But then we went and met some mobile carrier in Europe. I'm talking just to give you the time. It was 2009. And I remember we went to meet with the customer success team and customer support team, and suddenly two people from the secret service came and said if they can speak with us. And I remember, in situations that I don't know what's happening, I'm trying to joke and see what the situation is. So I said, 'Do I need a pajama and a toothbrush?' And they said, 'No, it's a good conversation.' And I said, 'Okay.' And we went into a small room, and for the first time they started to describe to me the work between the law enforcement and the mobile carriers. And they basically explained to me that in order to fight crime and in order to fight terrorist activities, there are law enforcement units within the mobile carriers. And when you receive a warrant from a judge, you can go and collect phone calls and SMSs from suspects. And I said, 'Okay, what do you want from me?' And they said that what happened since the emerging of the smartphones, the intelligence agencies, the law enforcement agencies basically are in the dark. 'Okay, what do you mean in the dark?' It means that because we are using applications which are end-to-end encrypted, and back then it wasn't WhatsApp but it was Skype and other applications, they can no longer collect intelligence that helps them save lives. That's basically what they said. And again, I still didn't understand what they want. And I said, 'Okay, but what do you need?' And they said, 'We saw the solution that you had with Commonty, which you basically go into the device, see a full replica, understand what's happening in the device, fix it remotely. So if we could use this in order to prevent crime, in order to catch the bad guys, that would be amazing.' By the way, that's exactly the switch between SIGINT and cyber. In SIGINT, you basically catch everything from the network, while in cyber, you go into the endpoint itself. They said, 'We need something to go to the endpoint.' And without maybe trying to do so, you actually figure out something that can really help us. And they said, 'Could you do it not just for support centers? Can you do it also for law enforcement agencies?' And of course we said yes, because we saw it's easy. And we went back to the investors and the board of directors and we told them, 'Listen, we have this new thing that just happened. They spoke with us.' And I was very excited, Omri also was very excited. And I remember that they looked and said, 'That's one of the most stupid ideas we ever heard in our life. It will never work. It will never succeed. We don't understand anything in this world. We have a great company. We have a great business model. Why should we actually change something or add something for something that actually works?' And we actually gave up on this. And then this episode of people asking us about this came back almost in every meeting that we had with mobile carriers around the world.

And you know, we talked about search and rescue. So Haiti was in January 2010. It basically changed my life in an essence. I don't think somebody can really talk about lack of governability or people that have nobody to approach with or people that live in fear until he was in Haiti after the earthquake. What happened in Haiti is that the entire government building collapsed on the government. Right? So when we arrived to Haiti, it was like chaos. Completely chaos. People doing whatever they want, and there is no government and there is no police and there is no army. It was like coming to the Wild West. And I remember that we arrived, it was shocking for us. And normally when you arrive to a country that has a disaster, you have somebody that leads you, that guides you, that tells you where he needs help, that gives you some envelope that will help you. We arrived and we had nobody that was helping us there. So we had to understand ourselves what to do. And it was the beginning of social media and Twitter and Facebook. And suddenly we saw ourselves opening social media and looking in the social media if somebody needs help. And this is actually how we rescued people in the beginning. Like we knew in advance where we had, or by rumors, but the first time that we used technology to save lives. And for me, it was like something that basically changed my perspective on a lot of things. And I said after Haiti, I came back and I decided that I'm leaving Commonty and I want to start what now called NSO.

Yes. I think that I wanted to do something which is more meaningful than just helping mobile carriers get better support for the customers. I thought that if you have something that can save lives, that if you have something that can change the national security of a country, if you have something that can be really meaningful, like technology and values and meaning, that's something I would like to do. And for me, NSO was exactly that.

I think there's one thing I learned very quickly in politics. There's perception and there's reality. Sometimes it's the same. Sometimes it's similar, and sometimes the perception has not a lot to do with the reality. And I think the perception, as you said Mike, about NSO is a very negative one, and it was always driven by people fighting NSO. On the other hand, and I think this is reality, it's always a technology or a company, and Pegasus is a technology that helped to save thousands of lives and it helped to fight terrorists, human traffickers, drug smugglers and others. So from my perspective, first of all, there's a lot of positive that happened because of NSO and because of Pegasus. And second, and that's for me even more important, I think the reason Shalev and others worked hard and tried to do something that has been undoable before and built an amazing technology is because they wanted to do something good. And I think that's what matters. So for me, it was easy to deal with the perception because after talking to him for a few hours, as I said before, for me it was immediately clear that if I do something in technology, I would like to do it with him.

Well, I think in some cases it's easy because you just have to figure out where does the story come from. Is it sure that it's true? Who drives it? Who is behind it? And the second thing is, I would say on some areas, it's okay to have different perspectives. And of course, a technology like Pegasus is something that can also be misused. Correct. And of course, I think if a law enforcement agency enters phones, it's very important that there is a clear regulation when it can be done and when not. So I think all these areas are correct in a way and they matter, but there's also a different side, and that's all the positive that was possible because of NSO.

And Michael, I think you asked about perception versus reality and how you can decide what is real. Unfortunately, I think in today's world, it's almost impossible to determine what is perception and what is reality. Therefore, a lot of people say perception is reality. And if somebody has an amazing perception, it be considered good. And if somebody has bad perception or bad reputation, even if he's doing great things, the perception about him would be bad. And there is almost nothing you can do that can really change it, unfortunately. And I think it's because of media and social media and campaigns. It's not happening in a day that somebody has... There is always an involvement of people, campaign, technology in order to build a perception. Sometimes people build it for themselves, sometimes other people build it for them. But as long as there is a lot of technology and money involved, it's very, very hard to fight that.

For me, it was always interesting when I was prime minister and I met people the first time that were all around the media. Because when somebody is so present in the media that you see him somewhere online every day, you start to get an opinion. And then when you have the chance, and that's one of the positive things when you're prime minister, you can meet a lot of interesting people. When you get the chance to meet such people the first time, as I said before, sometimes it's very similar to the public perception. But I sometimes met people where I had the feeling, 'Crazy that their image is so positive.' And sometimes I met people with a very negative image and I went out of the meeting and said, 'Okay, everything is fake that is all around the media about them.' So I think that's today's world. And what you mentioned before, the investigations I had to go through, for me it always felt ridiculous but it was unpleasant. So when I was prime minister, they started investigations against me and said that I lied in a parliamentary commission. Then they started a lawsuit and I always thought that this cannot be real. But to be honest, I was seen guilty by a judge who was seen guilty himself before for leaking information to a parliamentarian of the opposition. So I thought, 'How can it happen that among all these hundreds of judges in Austria, I exactly get the one who leaked information to one of my biggest opponents?' But in a way, it was like that. And in our system, the decision if a judge is biased or not is taken by the judge himself. So he said he's not biased. So he got the case. Then I was seen guilty, and then another year later, now the outcome at the appeal, thanks God, was a positive one. But to be honest, to go through something like that for years is unpleasant. And unfortunately, I think it's more and more part of our political campaigns in the Western world. And unfortunately, in more and more countries in the Western world, I think this becomes one element of politics, that you have more and more court cases and more and more investigations on areas where I would say it would be better just to have a political fight and not a fight in the court. Just imagine, criminal court for four years just if you say or didn't say the truth.

I think the problem is if it becomes a tool, it is negative for the whole judiciary, but at the same time it's very negative for politics because people who see it in the media all day, they lose trust in a way in the politicians who run their country. And I think that's the problem for Western liberal democracies, that it's not a positive development.

I think, but probably you can answer as well, but from my perspective, you can always misuse something. You can misuse a weapon. You can misuse an offensive cyber tool. You can always misuse something. I think it's the same like with a gun. There's a need for a policeman, and at the same time, of course, it can be misused. It's the same with technology, and we will see it in more and more areas the more technology becomes important also for governments.

You know, I think it's a common mistake. You don't sell those tools to politicians. You sell them to organizations. You sell them to the intelligence agencies. You sell them to the law enforcement agencies. There is a very regulated sales process. You need to get permission, if it's coming out from Israel, from the MOD. If it's coming from the US, from it. So it's not that you can sell it to whoever you want. Not that you sell it to private people. You sell it to law enforcement organization approved and regulated by the country that you export from. In this case, Israel. So obviously it's not something that politicians would use it.

Oh, I don't know. This is not my business.

I think not only it's doable, I think it's a must. And I think that founders of technologies that are very advanced should be self-regulated on themselves. We've done it in NSO, we are doing it in Dream. And I think everyone that has a technology, even if it's not supposed to be regulated, I don't think AI should be regulated. I think certain elements in AI should be regulated, but generally speaking, I think AI shouldn't be regulated. But take AI. I think companies that can think of misuse in their tools needs to map it, understand it, and build mechanisms to make sure that it won't happen. And those mechanisms can be technological mechanisms, can be a marketing mechanism, and should be other kind of mechanisms that you put in place because the technology will always be much, much faster than the regulation. And in AI, it's even tough to follow. Like six months ago, the AI was in like... What happened in the last six months in AI is an improvement that you cannot even think about a few months ago. So I think that just to summarize it, I think that you cannot be dependent on governments and countries to regulate you. You should be aware of what to do and you need to have enough understanding and you need to look through things and make sure you put all the safeguards that you can in order to prevent misuse of your product.

I want to come back to that. I think it's not easy to answer. I think the best answer I have is that from my perspective, it's important that there is much more interaction between those who write the regulation and those who work on the daily basis with technology. Because from my perspective, as Shalev mentioned, AI is changing the world so quickly for example that it's extremely difficult as a regulator to create something that really makes sense and is not overregulating and is also in a way working. So from my perspective, I think unfortunately the bureaucrats working on regulation are often far away from entrepreneurs or tech people inventing something, and the regulation is mainly driven by NGOs and their campaigns. So from my perspective, the only thing that can help is to have a lot of interaction between the companies and the bureaucrats who do the regulation, because that's the only way that you end up with something that makes sense in the end.

But if you compare Europe and the US, I think in Europe there's much more interaction between the NGOs and the bureaucrats and much less with the tech people. In the US, I would say it's different, and from my perspective it's much better as it is there. So I think you will never find...

Look, I think it needs both. I think you need people in the private sector who do care about their country, who do care about the system they live in. So I think it's something people should take time for. And the second thing, I think you need a different mindset among politicians and people in the system who also see this importance. When you look around Europe, who do you see who is competent enough to kind of engage in these tech discussions? For example, if you look at the German government now, with Merz, there's a big change going on. He spent most of his life in the private sector. It's now the first days in office, so too early to say, but if you ask me, I'm sure there will be a lot of openness from him and his team in order to engage with the business community. And it has been such a tough time for the German economy that from my perspective it's absolutely needed to do it like that, and I think they will. And you have other systems where it's not working at all. My feeling is that sometimes in countries that are not so developed, where the goal is still to become economically strong, to create jobs, there is much more engagement with the private sector. And as you said before, in countries where living conditions are quite good, social welfare system is strong, people care about everything else but not about the economy, and then you have less of this interaction.

Of course, because their number one goal is to be successful. The number one goal is that the United Arab Emirates are a successful country with high living standards and to create something positive for their people. If that's the number one goal, of course you try to work with the private sector. Of course you try to figure out how to have a set of regulation that you are as competitive as possible. If you don't care about creating jobs and your economy, it's not a problem. If it's not easy to be competitive there...

Yeah.

Countries like Germany and others have always been quite competitive in industries because of a lot of knowledge, a long tradition, hardworking people. The negative side was always high labor costs, but at the same time, energy costs were solid. Now, the energy costs went up like crazy. So, you have at the moment a combination of a lot of bureaucracy, high energy costs, and high labor costs, which makes it extremely difficult for many of the big players in Europe. So you have companies that originally come from Germany, they are successful all over the world, but in Germany or in Europe, it's much harder for them than in the rest of the world. This is extremely problematic. And I think yes, if times get worse and if the economy goes down, I think people start to question that there's more pressure on politicians to win. Sometimes like in Germany, people like Merz and the center right can win elections and can change things again.

Because they want to build something unique. It's a vision. The vision is to build one of the best places to live in the world. One of the most secure places, one of the places with the highest living standards, one of the best places when it comes to economy. So it's a vision and it's not only the UAE, I think the UAE is top in class, but you see also in countries like Singapore and a few others that it is possible. But leadership matters. Leadership matters definitely. And by the way, the leadership cares about what really matters because they don't need to focus on politics. You don't need to reelect every four years, right? And you know that if you are there, you are there for 10, 15, 20 years. So a lot of times politicians in countries that have elections and democracies, they're only looking for the short term.