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HBS Business Plan Finalists-CloudFlare

1. YOUR PITCH..
Websites today are under attack. Every day web administrators are subject to a host of threats from email address harvesting to cross-site scripting to denial of service attacks. Our survey of more than 130 web administrators revealed deep frustration. The attackers were universally described as a web administrator’s “worst enemies on the Internet,” “a pain to defend against,” “scum sucking weasels,” “parasites that leach off other people’s hard work,” and a “nuisance that should be subject to the abuses inflected on terrorists in Guantanamo.”

While websites are all subject to these threats, no comprehensive solution has emerged to protect sites while sharing data about new threats as they emerge. Instead, each web administrator has tended to come up with his or her own ad hoc approach to stopping malicious visitors.

CloudFlare offers a comprehensive security solution that protects websites from malicious online behavior. CloudFlare‘s system contributes data back to the larger pool enabling it to stay up-to-date on new threats. By sitting in the cloud, CloudFlare is the next frontier of website security and allows websites to focus on what they do best.

2. IDEA: WHAT SPARKED THE IDEA FOR YOUR BUSINESS PLAN?.
Prior to HBS, Matthew started Unspam Technologies, a company that worked in the anti-spam space. Unspam started Project Honey Pot which organized web administrators in more than 140 countries around the world to track online web threats. The data from Project Honey Pot was provided to law enforcement agencies but, generally, had not been widely deployed to offer protection from these threats.

Matthew & Michelle spent the semester thinking about ways to best use the data from Project Honey Pot. CloudFlare was born when we realized that we could deliver real value to customers, generate sustainable revenue and have a lot of fun in the process.

CloudFlare uses the Project Honey Pot data as a seed to offer a new form of protection to websites. The business model allows us to offer protection to small sites for free and still generate revenue through marketing affiliate programs. This allows us to build the service offering and brand credibility with underserved clients before tackling more demanding enterprise-class clients.

3. TARGET MARKET: WHO ARE YOU TARGETING? WHY? .
There are more than 175 million websites online ~ and eventually we want all of them!

On a more serious note, initially, we are targeting small websites with fewer than 5,000 unique monthly visitors. By building a significant user base from small sites, over time our value to large sites increases. Eventually, we plan to launch services designed for higher traffic websites.

4. CHALLENGES: WHAT DO YOU FORESEE AS THE BIGGEST CHALLENGE OR IMPEDIMENT IN REACHING COMMERCIAL VIABILITY/SUCCESS? .
CloudFlare is fortunate in that its technology development risks are relatively modest. Our proof-of-concept demonstration can already scale to support a very large number of customers without requiring significant underlying hardware resources.

What we see as our biggest challenge is funding. In order to build the network infrastructure we need, we need significant upfront capital of $2 to $4 million.

5. FUNDING: IF YOUR TEAM WERE TO RECEIVE $100,000 IN FUNDING FOR YOUR BUSINESS TOMORROW, WHAT WOULD YOU DO WITH IT? WHAT IS THE MOST CRITICAL INVESTMENT YOU NEED TO MAKE IN ORDER TO GROW YOUR BUSINESS? .
Technology, technology, technology! We would use the $100K to start to build out our network infrastructure & refine our IP.

6. TEAM: .
Matthew & Michelle are sectionmates (go OD!). During the Silicon Valley IXP, we discussed a number of business opportunities until this one finally stuck. We pitched the idea to Tom Eisenmann, who had been our TEM professor, and he encouraged us to move forward and offered to be our faculty advisor.

CloudFlare‘s core technology grew out of Matthew’s previous experience at Unspam. Michelle’s experience taking technology products to market and her understanding of online marketing and lead generation from working at Google, Toshiba, and Internet startups shaped the CloudFlare innovative business model.

CloudFlare has two additional, non-HBS team members: Eric Langheinrich and Lee Holloway. Both computer engineers worked with Matthew at his former company. They have been hard at work building a proof-of-concept demonstration of CloudFlare‘s technology, which already kicks ass.

April 27, 2009
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