Pascal Gauthier - Chairman & CEO of Ledger | How Ledger Protects Billions

Welcome to success story. I'm your host, Scott Clary. The success story podcast is part of the HubSpot podcast network They have great podcasts. 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What was that pivotal moment and we can go from there? So think about that and then we'll take it away whenever you're ready I'm ready. Go ahead. What is that point? Well, there are two actually so sorry. No, no, no, it's fine But but the the first one was actually When I was failing college, I dropped out of university basically and I was sort of failing college miserably and And of course I was a bartender instead of going to university and I was having a lot of fun and while I was having fun one day one friend of mine Francois came to me and say hey, you know I've got these guys. He actually did proper studies and he actually had a good job We see the congraphics at the time and it was like hey, it was in 2000 and 2000 he said to me. Yeah, I've got these guys they're leaving silicone graphics and they're going to be a start-up like he was a dot-com boom and so Say do you want to interview interview for a job? And I was desperate for a job like no one wanted to hire me And so I went and I got my first job and this is you know what I'm here today Sort of and the second point the second inflection point was when my son was born so that was in 2005 and That gets you really hungry for success Yeah, yeah, because now you have someone else who relies on you Yes, what did that push you to do in your career like when your son was obviously successful before your son was born, but What did that push you to do did it push you like work harder was it? Focus more on something that you really knew you had to accomplish. What was that thing? What was that drive that it unlocked? Work harder for sure. It's actually something quite primal Yeah, my wife always complain that you know the day was born like the only thing I wanted to do was to go out of the house and and work more and I think It happens to a lot of men where It is actually mistaken for for you trying to leave the nest because you don't want to deal with the burden But it's actually I think it is you trying to go out and sort of hunt more Yeah, to protect the family something like that. And so I had that strong feeling that sort of push me outside And so that was number one and number two. It's also In the end like you know sort of working to make sure that my son would look up to me and so not to disappoint him Became something that was more important than not to disappoint my parents. That's funny That's very interesting how the focus shifts right because I think that when you when you're when you're coming up in your career You know if you have a healthy relationship with your parents It is for a time where you actually don't want to screw up Yeah, and then you start to be successful and then for some people that are very entrepreneurial or some people that build big things You start to outpace what your parents ever expected of you So then you're trying to wonder like at some point like what's the purpose anymore? Like who are you doing this for? I don't have kids yet Mm-hmm, but I think that that's actually a really important An important thing you build something bigger than yourself, right? Yeah, it is and you know that the story goes like this. So I did a successful business in advertising and That gave me access to a lot of liquidity and a lot of you know I can go to the beach for the rest of my life. Yeah money. And so the question is like, why do you work? And there were a few answers, but like you know One is because I like it, but two also is because you know, I didn't want my son to see me and I was All the late 30s late 30s early 40s And you had asked you money at late in late 30s after the after the exit after 2013 Yeah, so 10 years ago. So it was 37. Yeah, and so I was just like okay He's my son going you know every day. Then we're just gonna come home I'm gonna be home and you know play the PlayStation Like do something and you know don't get me wrong like you can have other passions than just working and that's that's all good And well and if I had had those passions I would have focused on these but you know achieve something like sort of do Something I'm really good at working. So well, and I love working So I just focus on that because you go so hard for so long especially when you are a high performer, right? So when you build so that company which company was that that was a criteria criteria So that company in IPO'd in 2013. Yes correct. That's that So when you go that hard for so long and I've actually noticed there's a lot of people that have had a big exit event There's a lot of Questioning what's next? Yes, and questioning, you know, what is your purpose in the world? And I'm actually curious You know now you you have a child You you don't have to work again, but you know you want to do something. So what led you to Ledger at the end of the day. What was the thing that got you at a bed in the morning because that's a a total 180 from your background as well Oh, yeah, well first of all because I have a background, but you know, but but also advertising for sure and so no he was A few things so one I wanted to do something too. I wanted to do something that was bigger than than credio It was sort of a public public company. Yeah, it was it's just two billion dollars, you know, evaluation and And when she's once you start to compete like you know, you want to you want to play the Trumpians league That's that's very clear and so one other thing that was very frustrating when We're building this advertising business is that we always find like Google Amazon Facebook etc. That were Bigger advertising companies and so therefore the game was a little rigged like there's no way that you know Credio would be bigger than these companies. And so therefore I thought okay, so what is the You know, what is the what is the company or what is the The where can I play where there is fair competition and actually finding Bitcoin in 2014 was Sort of that revelation is like oh, okay, it's a new protocol. And so it's not the web protocol is something different And so therefore Now it's exchange of value etc. And so he changes everything and actually 10 years Later almost you can see that none of the big guys have really moved into crypto yet The Google the Amazon of the world etc. They're starting to touch it a little bit But 10 years after they haven't really touched it well They messed around with their own internal protocols correct like you have IBM the messes around with their own internal protocol But ultimately you still have a lot of independent companies that are still trying to build the biggest and the best and the most user friendly and the best user experience For crypto for Bitcoin for everything right so It's actually interesting to me because you know, you don't realize how long it's been you don't realize that 2014 Okay, that was that was a long time a long time ago But we're still with crypto. We still haven't gotten to the point where someone's grandmother can use it easily Like I know you like you speak a lot about you know, if they're not it's not your keys not your crypto right you have to have your own keys The the user experience in the industry still complex And it's getting more complex. I mean it's getting you now you add on NFTs you add on DeFi you add on things that are even another layer so Where where have you seen us? Sort of grow over the past 10 years and what's left to do? How do we sort of make it so that there is that you know that peak user adoption that we actually want to see Okay, first I'll give you a little teaser. It is complex, but it's not as complex as we say it is and I explain why okay But I don't know in the past 10 years like 2014 was nuclear winter like honestly being in crypto then was you know Very interesting because you would meet extraordinary people but very hard from a business standpoint It was very hard to understand, you know, where this would go what would be the business etc etc And very few people engage very hard to recruit people like in 2014. I remember trying to recruit for My first company Kaiko, which is a data company that is really well today under the stewardship of almost Subiran Impossible to recruit people when today is very easy like you know today web 3 crypto whatever it is It's very attractive for for for talent and so to recruit talent is much easier than when he when he was in 14 And there's been wave of innovation. I think you know to access the market the exchange was like first and then In 2017 I think there was another wave of like you know custodian and custodian technology that was like sort of That wave because you know suddenly you had a lot of crypto, but you didn't know where to put it and so you know We had to work hard and part of this was self-custodian what ledger does in terms of hardware What if you think about it like ledger was only launched in you know and 14 beginning 15 and you know the first Hit product that we had in the market was 2016 with the nano s And so that's to put things perspective nano x was 2018. That's very recent still actually. It is very And stacks now is gonna be 23 and you know, so some from 14 to 23 almost 10 years we we could only take two or three or four products to market depending on how you come There's the s plus that also came out. Yeah last year, but which is just a revamp of the of the s But it's interesting though that Ledger is still leading the way in hardware and I've heard you on a few podcasts before speak about how crypto and DeFi and blockchain so much software innovation But not as much hardware innovation Now there is a lot of hardware innovation, but the problem is hardware is slow It's a hardware is very slow. So typically from them, you know The moment you think about building a product to when the product is gonna be in market There is something like two to three years And if you become really good like Apple it's one year That's cycle, but it's very hard to take products to to to market like it's very hard to build something etc And you know in it with hardware also you can't really fuck it up. No, I know that's what I'm saying once it's built It's built. Yeah, and so you can't recall all that you can't push an update. I mean you can But if you do then your company is dead, you know So so you have to be very very extremely careful so typically to launch stacks, you know, there's some frustration now From people to say hey when you guys going to launch you announce in December and now you know, it's a pro etc So it is true that we light but the complexity of building a product like stacks is you know really Crazy and also we want to make sure that when we launch is perfect. We'll close to be perfect Yes, it has to be because if again you you aren't the size of Apple. Yeah, so if you screw it up That's not but it's not even perfect like that. I think we want screwed up to be honest, but perfect in the sense that You know, this is this is the work of precision like you know, the hardware needs to work the operating system needs to be Flow less into the hardware that needs to connect beautifully to the software when we launch the software needs to be on Power with other products etc So there is a certain complexity and also now the hardware can be Use and be paired with like so many other wallets in the space. It's not just ledger and ledger live It's you know ledger and metamask ledger and coinbase wallet etc etc and you know the industries and users are always asking for more So I would say That was that was the wave like you know the custody wave in in 17 and now you know 20 21 was the wave of you know Applications to run on blockchains, you know the you know sort of DeFi and FT etc etc So these have been like the the three successive wave and there will be so much more to to to say about this But this is how I would go very quickly on this Uh, and what are they saying when I say that I'll tell you at the end Um, I think well, I think we're talking about the the problems with hardware No I buy buy I can't remember what you're getting back to No, I have a follow up though. It doesn't matter. I don't remember. We'll get back to it Um, this is what this is my problem because I ask I when I get interested about something I ask these like multi-point questions and then I'm gonna loss. It's fine But so my I guess the biggest responsibility you have is that you're leading the way like You're you are building bleeding edge technology and you are you are wait easy to use not easy to use I got it. I got to say. Oh, I'm sorry Then I have a follow-up go okay So we always say like it's not very easy to use yes, okay So now forget web 3 crypto Bitcoin however you call it blockchain technology now just focus on web 2 today Yeah, is it very easy to connect to your bank? I mean, you know, I know mine is like super hard I've got codes everywhere. I got shit. I need to remember if it's a if it's a banking account in the UK I mean honestly, it's so hard to use I've been shut down from from I was with hsbc. I mean actually. I'm no longer with hsbc But in the UK when this guy shut you down from the web because you've done like the wrong money or whatever Like you know, you press two times on the same button that you shouldn't have oh my god like to get back online I know crazy, so you're not wrong. You're not so actually thinking through that point even now So I have TD I'm Canadian. Okay, I have TD and I have a Toronto number hooked up as my 2FA Which I don't have access to anymore because now I have my American number and the amount of shit that they gave me to switch my 2FA phone number from a Toronto number to an American number to a Florida number is insane and then I always I think One out of every three purchases because I'm a Canadian down in the US as a fraud alert And they're sending little notifications to a phone number doesn't exist anymore saying hey is this you? So it's it's it's not so it's not super convenient and actually if you think about like all these apps now that ask you for 2FA Yeah, I mean look at it to connect to any change crypto exchange You know, this is not web 3 is just like you know an interface and you place your bids etc This is 100% web 2 you need 2FA to connect to anything now because otherwise looking password is not enough like you know everyone is is big companies are moving towards vital to in terms of Knowing who you are etc. So actually there is like A very complex layer of security that comes on top of the web whether you want it or not And that makes things less easy for users, but you know users are you know Deal with this the reason why they didn't deal with this so much in web 2 is because Everybody agrees that your phone and your computers are broken you keep on patching them They're like sorry. It was open. Please patch it. Okay, and Everybody understand you understand everybody has made this postcast that for web 3 and crypto and Bitcoin It's not acceptable. Mm-hmm. If it's open You know by the time that you patch it maybe the bitcoins are gone For your email and many other things where you have a lot of insurance like your bank etc Okay, maybe sometime the money is gone, but you call your bank and yeah, you know you got an insurance for this You know if you're looking Sometimes you don't But for Bitcoin like there's no insurance yet. And so once it's gone. It's gone. And so security has to be Very different, but I would but I would say you know using my ledger every day I don't think it's more complex than using my bank account actually to be honest So do you feel like it's it's perceived difficult like incorrectly perceived the difficulty of somebody trying to learn something new? Yeah, there is a it's funny because when I look at myself in the mirror I don't recognize myself because when I think about myself I always remember myself when I was 18. Yeah, I don't know if you have the same problem Sometimes yeah, and I change a lot And so I think the same is happening with crypto There's a bunch of people that came into crypto in like 15 16 17 18 whatever And they don't actually touch their coins much and so for them like you know the you know crypto is still where it was Yeah, way back when I even have like the CEO of one of the major companies writing to me the other day and saying Before we launch stacks just to give context, but but just before we launch stacks And so some maybe in 2021 To to say hey convertulation on your new product and it was like what new product and it was referring to the nano ex that we launched in 2018 So even someone that works in the industry and you know Understand very well the the problem of security et cetera I was not aware that we had a new product after the nano s that we launched in 16 so you would say Okay, but then you sucked at marketing then which probably was the case But equally, you know, there is you know Resilience in people's mind in the space and they always make the same comment But I would argue that Typically ledger is a hundred thousand times easier to use in 23 than what he was in in 17 Do you find that because you're sort of boots on the ground so I I don't want to make assumptions But do you find that more people are still keeping their crypto on On the in the spot where they bought it or do you see user adoption to harder people understanding security better No, we we've seen People understand money so and they don't want to lose their money. So now after a lot of people lose money a lot of people lose money But after FTX is like you know when you when you burn yourself and you know not touch the flame anymore So FTX was the big earthquake. I think much bigger than you know mongogs or you know all of these things that happen in the past And by the way they keep on happening and they will keep on happening You know FTX was not the last The same way that lemon brother was not too big to fail like you know It's like why would you trust the central authority with your money? Use I mean exchanges are very useful like you know You should use them to do the trade, but like you should never leave your coins on an exchange And so I think people understand that and we've seen we've seen this in our numbers like It was you know a hard way to learn but but but it was away and And you see it in the coins moving from exchanges to sort of somewhere else and and we see a lot of coins moving to our platform And then we see a lot more people now engaging with the services that we have in later lives Especially the buy the sale and the swap services the numbers are you know very impressive yarn here like you know triple digit gross And very constantly in q1 continuing in q2 when the market is not definitely not doing a triple digit gross No, no, not at all. Yeah, so you see you're not even taking over people that are like Very very adamant crypto users. You still are you're bringing people in yes, we've never used crypto before even in a On the transaction thing what I'm describing is more like our user base now understand that they can do more with ledger Then just store the crypto and they prefer to do the trades from their ledger rather than from the exchange understood So they so they they have they keep it in the ecosystem correct But do you also see people like you still see of the course the industry is not growing a triple digit growth But do you all see people that are are entering crypto with ledger versus entering crypto with coin base and keeping things on coin base Oh, yeah, for sure and actually more and more like well first of all before you in 17 it was not possible So you had to do coin base first and then ledger second um In 23 now first of all it's not just crypto currencies, but it's also nft So sometimes you enter you enter through an NFT and not really Through through crypto you can go and open see take your credit to debit card You know winpays providing the service and then you buy your NFT and then you have to put it somewhere And actually through the payment service moon pay will ask you Where do you want to put it? And so it could be on your mana mask could be on your ledger etc etc And so yes more and more actually what we've seen in 22 When everybody was saying it was a bear market we saw that Sure and certain things you know certain things were not Flying as high as they would have had in the past But other things like you know the NFT Business and those communities being built around those projects kept on growing And so that brought a lot of people in that build a lot of ledgers And and what do you know now again? You see you see people that are older crypto users as well as new crypto users Using ledger for all all the transactions that they want to take care of What do you think is the key to user adoption? Do you think that there is Unfortunately the requirement for more FTX type things that I'm actually not for not user adoptions or that would be That would be migrating people over that are already crypto users But let's say bringing new people in so FTX pushes people away that have never touched crypto It makes them scared they say oh thank goodness I never bought any crypto because look at what just happened What on the flip side of that what is the key to user adoption? Okay, but first I think So far everybody got it wrong to think that speculation over coins was actually crypto I mean it is not crypto to speculate on FTT on FTX that's That's like the worst of financial speculation I guess and And if to you crypto is just like buying an Apple stock I mean you know sure like you can do that But I don't think it's the use case for crypto and by the way like you know the the token only has value if you bring security to The blockchain and if the blockchain as a vibrant ecosystem of developers Companies applications get read that are built on top of it. So I think that the Even this the market that is just taking care of speculation like you know They're not looking you know sort of deep enough into the protocols etc And you have like and it's difficult because you had so many like meme coins that I have like sort of no value But it's just like People pumping and dumping the market that it makes that whole speculation aspect of crypto a bit ridiculous If you want my honest point of view. I think where crypto is interesting is Uh If it's in self-custody because this is why and how it has been designed like you know if you still leave your crypto at a bank Again sure, but why There are other things that you can invest in that are that are probably good good investments and Yeah, so the interesting thing is like what can you do with your with your private keys and how can you engage in you know Product that are interesting like defies one a good example if you don't have your private keys you cannot Really engage in defy We always overlook payment As if it's a given But I still think that store value and payment with bitcoin or lightning or payment in general with crypto is the killer app I mean you have like a peer-to-peer global payment network It's interesting how you know focuses on that as much as they should because that was the original white paper, right? And this is where it's amazing like you know To pay anything for me in the US with my European credit cards. Oh my god. Like it's so difficult It's very difficult like it depends what you want to pay etc I mean if you if you leave on in a five dollars a day I guess you're good But like if you have to go to hotels you're entertaining You know your customers because you you have a business dinner where suddenly 10 people come you know that has a cost etc And if you start to use your credit cards like you max them out like you know the one after the other etc and so And and the fees that you pay like every time that you go to the ATM in the US like four dollars to get $100 out that's ridiculous and so Yes Payment with crypto is a huge case, you know, and if you if you think that Bitcoin is too volatile. Okay fine. So do it in In stable points. Mm-hmm, and like that's I think that's what people actually have to that's a really good point So people that are scared of crypto because of FTX FTT or anything else You're right. It's because they're focusing on the wrong thing Because I think too many people tried to gamble on it for a long period of time and they realized that oh It actually is volatile. It doesn't just go one way. It's you can go both ways I mean, it's like going to the casino and be like fuck, you know, I got wrecked. I mean, yes Yeah, that's how casino's work. Yes, that's that's the casino. That's not a good behavior You you shouldn't you know when I when I got into crypto the theory was to say you only invest in crypto What you can lose and then you long like you wait like you know, it is not like Coming in and out and people that trying to Buy low sell high, you know sure like everybody would love to be able to time the market But it doesn't work like that. How do you balance when you're building this hardware product? How do you balance security and usability? Because you're attracting you're attracting again the most complex users that want the most complex features as well as Someone's parents that just are starting it for the first time Okay, so first of all, I don't think we building technology for parents or grandparents Sorry to break the news to the parents and grandparents that are using these podcasts We are building technology for the younger generation, you know I think if Bitcoin and crypto have to become what they ought to become, you know, it will be for the younger generation I remember when I was a kid We switch Frank's from the old Frank's to the new Frank's and it was a division of a thousand I think oh, but no a division of a hundred something like that A thousand ancient Frank's where suddenly ten new Frank's and I remember my grandmother never being able to Actually, it's not true my grandmother did the switch, but her sister never did the switch So she would always talk to me in old the old the old elimination etc Which always I always felt that it was going to be super rich, but actually you know had to do the math and you know the division in my head and I was in the end. I was not that rich and so My point is Other people move with technology and it doesn't matter if you're a father or grandfather etc Like if you pay attention and you move with technology you will understand But the technology is developed for younger generations. Okay, so now that I've said that how do you combine? You know security and ease of use You do so stacks was an interesting story where Tony Fadel the inventor of the iPod join ledger and to design stacks and There has been that healthy tension between Tony who's a product guy and you know one's product features and a Product it is easy to use and the ledger team that is a security team and it's like that's not possible That's not possible. We can't do that etc And so in the end you you make it work and you make it work By saying number one there is zero compromise on security ever Like there's no it's not even a discussion We don't even open the discussion if there is a flow or if there's a way even if it's very difficult that someone could get into the device Then it's a no go then we have to change the design we have to change your product etc so But once you you pass that hurdle of zero compromise on security Then you try to develop products where basically you make the onboarding easy And the connectivity easy to the two pain points that you're you're trying to to solve for so I need to set up my bank account. I need to set up my wallet. I need to set up something How easy it is and by the way coming back to your previous question and like oh this shit is hard I don't know like you know Last time I tried to set up like an exchange account. He wasn't easy You have to have your ID, you know, you need to understand the kind of levels You know so level one is like okay, just one idea level two. You need two ideas of proof of residence etc Like it's not so easy like to register at a bank. It's not so easy either um Some make it like easier than others like revolute as a very slick service But this is why they're super successful. Yeah. Yeah, you're right actually because they they brought that into into into the market So even in the the old financial market Most of the UX UI are really bad And so I would actually argue that what we're doing now and especially we stacks in terms of on boarding is gonna be flawless And then in terms of connectivity is like okay once I have that thing like what can I do with it That's the second problem that you're trying to solve and to make it As connected as possible think about the iPhone like the iPhone was a hit because suddenly you could connect to the internet You know very easy manner. I just want to take a quick second and tell you about one more podcast You have to check out if you're a fan of success story It's sales evangelist hosted by Donald Kelly brought to you by the HubSpot podcast network Each week Donald interviews the world best sales experts successful sellers sales leaders and entrepreneurs Who share their strategies to succeed in sales right now. He brings on Jeffrey Gettimer Jill Conrath, Bob Burr, Guy Kawasaki They share actionable insights and stories that will encourage Challenge and motivate you to hustle your way to more revenue for your business If you're somebody who's looking to take off in your sales career If you are an entrepreneur who's looking to sell more I think all of us are go listen to sales evangelist wherever you get your podcasts I'm you know, you're you're walking through all the problems you're solving forward ledger and I'm actually really curious just as um As an example of a great CEO How did you pivot from a background in in marketing advertising? How did you pivot into a crypto hardware company? I don't know how you exactly describe ledger, but how do you make that pay the security company security company? How do you do that successfully? I think you can only do that successfully if one you do the switch when no one is looking That's right I guess if you tried to do that switch in a highly competitive environment like it's almost impossible But in 14 nobody was looking Nobody cared and so I joined thinking okay, I've got time to learn I knew I had like two three years maybe four Where I could just work and learn and my mistakes wouldn't be held against me and Nobody knew anyway So it's fine not to know when nobody knows yeah, it's much harder to do a switch like this in web three right now You're like oh, you know, I was selling whatever yesterday and now I want to get into crypto. Okay, it's more difficult like you know The the market exists there are big companies etc So you can still get in but you know The second thing that you have to do is you have to Put your ego in your pocket like you go back all the way down Uh, so when I left credo people say to me I was chief operating officer I had I don't know like eight hundred and nine hundred people reporting to me like something like a public company etc So it was good and people say to me. Oh my god like you know the second you're you're out of the door with credo Like your your phone is gonna keep on ringing like people will call you and offer you job etc So the phone never rang Uh, and not zero close but a few calls that I got like we're not for me Uh, and so I was just like shit and so you have to be and so then I figure that the only solution was to go back all the way down and work on my way up again Yeah, and this is what I did but but again for this you need to have Uh, an ecosystem that is very very new so you can take as much space as possible You can meet a lot of people etc. And also it's you you have to be willing to start again from zero And I can tell you that's you know when you have liquidity some of the discussions I had in the early days were very unpleasant When people were very mean to me and sometimes you got the fuck you money you get like you know what like I don't need to do this meeting. Yeah, you know and but actually I never say that I always like you know you suck it up you shut up like you learn Doesn't matter if people are you know, talking down on you like it doesn't really matter Like what matters the objective you sit side for yourself. I love that though It's a smart lesson because I bet a lot of people with ego would approach it very differently But that it's you know hindsight's always 2020 now you look back They're like all those choices. I made where the right choices like look at look at what you're doing now Look at what you're building now, you know You're you're truly on the bleeding edge of tech you're changing the world But When you when you have a major exit event like egos already threw the roof You're like I already already fucking did this. I don't have to deal with this shit anymore And then you do and then you do and and you know you're you're building out this company You're new in it put the ego aside learning everything. These are all really smart lessons But you mentioned something else that it's a maker break for an entrepreneur CEO or even a founder It's bringing on the best talent and in crypto in 2014 like you said talent was tough So how did you how did you get people in a security company? You can't compromise on talent So how did you get the right people? Um Well, it's just step-by-step process really and you know they have several phases But like I think the the first step was to really focus on the on the security Talent yeah, and it was one of the reason why ledger is born in France and because when he comes to um secure hardware and sort of embedded security Operating system that run in hardware etc. We have a There is some exit France is probably one of the Hot spots for you know top developers when he comes to that world France is not the only country. Of course like you have Israel you have China, Russia, etc. But it's more of a European thing. It's less of an American thing like secure hardware Uh, and uh, and we have like you know top talents there. So When you actually think about building a business you need to think about like what's my edge, you know If I start from Paris like you know, okay, the city is beautiful But you know what else do we have and you're like okay, well when it comes to secure hardware We have the best talent. Okay, so you start with that and you just start with security And the first thing that we try to do is to establish you know security dominance And to make sure that we really had that sort of nailed To the point where I think ledger right now is the only company to have uh A hardware wallet that has not been Uh Opened by the dungeon. So the dungeon is our attack lab and what we do is we take every product in the market including ours And we try to extract private keys And we manage to do it with you know a bunch of what it's in the market never with ledger It's impossible to extract private keys today. It's impossible to extract private keys from a ledger not the same can be said uh Uh, from you know what it's that come from other vendors So I know there's a lot of I'm gonna use a very lame in-serm hacks and I think there was something in the news today. There was like another Another wallet was compromised. I guess there's a trust wallet vulnerability We find out So is that is that a symptom of having a wallet connected to the internet? Is there anything that can ever be secure that's connected to the internet or is that a false? Yeah, your ledger can be connected to the internet but you can take it off but you can Yeah, you can okay. There's the whole thing like because your private keys are in your ledger and in the secure element Yeah, but it's fine. You can't leave it connected to the internet the whole day if you want So what happens with every all these other vulnerabilities exploits? How how can no one else get it? These are different because these are software wallet. So what happened if you use a software wallet is your software Is fundamentally broken because it sits on your phone and or your computer Um, you know phone and computer hardware. It sits on hardware. Those are meant for correct. Okay, and you know the Zero-day exploits. Yeah, yeah, there's a market for it. You can go online. It's not even a dark market. It's an open-ended because Yeah, zero-day exploit is you have hackers that all day long try to Enter into systems and what they do is usually they go through the operating system now that that that that has many holes and listeners like people that listen to this podcast, you know, you know, this because you've been patching again your your your phone your computer your Your chrome your fire Firefox. Yes Firefox You know Everything like so many times and so and so you were patching them because There are vulnerabilities that have been found and suddenly oh my god like now we need to patch them but Until they're patched like it means that it's open So basically if it's if the operating system is open and attacker will go through the operating system And everything that sits on top of the operating system is vulnerable It's basically the door is open. There is nothing that you can do to shut it down So there is no app that you can put on top of an operating system that is weak in terms of security that can be secure and so therefore If I gain access to your phone and it's very easy. I just You download the wrong app when there is where there is a malware If you got your coins in I don't know metamask or any software wallet that sits on your phone Your coins are gone in less than 30 seconds And The malware we just like take your private keys and they're going so all you got to be is a target Yes. Oh, well. No, that's even easier. I'm just no. I know. I mean, but I'm saying if so so basically if anybody has soft Because there's a lot of software wallets out there. Yes, if somebody wants to go after you if somebody knows it's gone easy That's scary as hell because there's a whole market. There's there's multi-billion dollars in companies that Build software. Oh, yeah, but you can you can google you go on the ledger dungeon blog and there is a page we can send it to you so you can put it like yeah Yeah, there's a page where we show exactly that like you know how we take like any software What I did in the market and how we can extract private keys in less than 30 seconds And only takes is a malware that is downloaded on your PC or your Mac or your phone and we download malware every day Like you know, it's not crazy to think that you're gonna download a malware and especially if you're targeted Then it's even easier. It's like hey, how are you look at that cute video? I was like oh, this is fun and then boom what are your coins are gone? So I think I think a lot of this has to do with education because I mean I'm not ignorant to to crypto and and this industry But I think a lot of people are even like less knowledgeable than me some people are obviously way more But like the average user that uses software wallets I'm pretty sure that if you ask you know five of my friends that have bought Significant amount of Bitcoin or any other coin metamask is fine. Everything is fine. No problem I think that's no one really knows yes the exploit that that can actually happen. That's true I think that's I think that's that's a that's a big education piece But what you'll see now is like most of these wallets like you know They actually will tell you as a user like if you want the best security, you know use a ledger pair pair your Metamask with the ledger metamask is actually saying this Which I think is good and you know once you know that then it's okay to Decide for yourself. It's like okay. This is the best security and It's not because your metamask is on your phone that your coins are necessarily gone like right away Like you still need to download a malware or you still need to be targeted But like the risk that they'll be gone gets much higher and so then you have to decide for yourself Like you know people will say about I only have one NFT and 50 dollars on my metamask or that's fine Like you know, I don't need to to pair it with a ledger Which is probably fine, but the program again with this is you know If someone breaks into your house and they only take the PlayStation I mean, it's not bad bad in sense. It's just a PlayStation but still it's fucking sucks like you know Even if it's 50 dollars or the PlayStation or one NFT like I don't want anyone to come to my home and take my stuff Yeah, it's just not a good feeling. It just means that you feel like someone's been in your shed Yeah, someone's been in your shit and also today was 50 dollars and so tomorrow is how much and so therefore you cannot trust That system I really think that You're right. There is a lot of education to be done My people need to realize that not you not your kids not your coin and so take your coins of exchanges But also if you use a software what I make sure to pair it with a hardware what it to protect the private keys. That's smart. Um, do you see Um I'm curious where you're just looking towards the future. Do you see AI being Incorporated as a as a malicious attack Uh, running like hundreds of thousands of different possible vectors for attack at the same time using AI Like you see the inclusion of AI to be A positive or negative something that you have to understand as a as a CEO of a security company So it's definitely something that you have to understand but if AI is used to attack you can also be used to defend And so it's always the game of attack versus defense And so you know, we are on the defensive side and so we'll use every piece of technology that is available to Make the defense is stronger. Uh, so there is a stream at ledger right now strategic one like to figure out like You know how AI is going to impact us and you know what's What's interesting etc. I can I can give you like a like a fun example like AI is actually pretty good at spotting bugs in yeah in code and so you know for smart contracts and everything You know, it's a good way to quickly screen a contract and to see where they could be a problem So typically we're gonna use AI for that Uh, but so we'll attackers and so I think you know if the defense and attackers use AI in the same way It sort of neutralizes itself Uh, and if the defenders you use AI in a better way than Gives us an edge etc. And so it's a cat and mouse Yeah, but you have but like as as as an organization involved like you already you're already exploring it That's that's probably the most important thing to stay ahead Yeah, AI, but also you know quantum computing etc. But but but there are things that are you know uh Sort of true At some point like typically yeah, I get a lot of questions that quantum computing is like oh, but when this happened like you know Ledger is fucked. I mean yes, but if that was to happen like that like you know Suddenly there is quantum computing and and ledger is fucked I'm like we got bigger problem with nuclear weapons like you know that's valid too What are what are some of the the challenges that you but but it's not going to happen like this My point with quantum computing is like you know is attack defense etc And so the day that quantum computing is really a thing then you know defenses would have been both both sides have access to Yes, both sides always have access to it's just being You know as as as a leader of an organization you just have to be on it and correct You have to be including that in the part of your security strategy or engineering strategy So you have like a whole research department that goes after this stuff. Yes Um, what are some of you know as as a As a CEO of the security company what are some of the challenges some of the things that you want to take on in the future For ledger like where do you see your place in the in the crypto ecosystem? Um Well, I think you know the crypto ecosystem by it's right to use crypto because for me crypto is a bigger umbrella Right which and under you have cryptocurrency you have eventually NFT But you have everything that is your sort of digital lifestyle and you know all the way to your identity your passwords etc And so you know, I think with the way that the world is going like you know people will need more security to connect online and you know again to Uh, you know sort of onboarding you know security onboarding and connectivity You know, this is the same problem whether you're web 1 with 2 with 3 like it's the same problem actually Um, so you know for from from a user perspective. I think your ledger will be your um You know digital lifestyle companion like you know if you want to connect your apps if you want to Think about Instagram for one second like how many people actually make a living through Instagram? And so when they do of course for them it's a big problem if they get hacked Like if someone get access through their account like they can lose a lot of money for a month two months etc It's very hard to rebuild like a credibility reputation after you've been hacked This is like the house like the digital house that got you know breach or Or rubbed, you know And so I think In the future people will need sort of more and more security for to to access things and whether it's cryptocurrency To share your identity etc and you know ledger as a huge role to play into this But not just cryptocurrency sort of everything else that is your digital lifestyle and the secrets that you need to protect I was gonna say you know as a you know again You're you're leading this company and and there's always concern about regulation and volatility But that's over a very particular asset class correct very very very specific. So When you look at the future of ledger You don't want to have unknowns in a business as much as possibly you want to remove the unknowns and regulation is a huge You know question mark. I mean it's country-specific But as a CEO you want to build out a business that's that's you know your future proofing yourself And you and you go down all these different pathways. So you so what you're trying to accomplish in the future is like This is the de facto security system for all these different Online interactions it requires some level of security correct Meaning internally you go them like meaningful interactions. Yeah uh, and Yes, and again like it's more of I had the question the other day of saying oh, but what if regulation you know Actually, it was a question from a phone vendor. It was just like what if regulation hits you and you know What are you gonna do about it? I'm like well if regulation hits ledger Means that the phones are next in line or maybe first in line like you know You can download anything on your phone like you can run like you know Uh, a bitcoin wallet directly on your phone. Yeah, of course. Yeah, so suddenly if you need to KYC ML everyone that's got a bitcoin wallet then you need to KYC email everyone that buys like a phone a computer Yeah, et cetera, et cetera, so it becomes like you know really bad in terms of A freedom so I don't think he's gonna it's gonna get there, but you're right like you know it's what we do is all about What what we do we don't really do it for business like you know business is a good consequence of what we do We do is we do it for our users and so you know security needs of use that's that's that's our mission But yeah, no we we need we think it's very important Because without security there's no freedom like you know so online freedom only exist if you can be Secure with your secrets and if you cannot protect your secrets then It's not just a problem of crypto and ledger is more fundamental problem than that Well, I think that's a huge problem right now. I think more than ever. I think I mean Again, even in web too the amount of people that get fished and get hacked all the time, right? So now you just have access to now now when people are trying to you know store their whole lives online a lot of personal information And so when when is the when do you think will be the point where ledger starts to actually help People outside of it's like first primary use case Well, we really started. I mean, you know, there is a nap for password. There's a nap for 2fn and fido etc So we're doing sort of baby steps and we will further accelerate I guess early 24 like yeah and second half of 23 is to get stacks live and you know Sort of various other PCs of the software And I think What why we do that the second half of 23 will be to work also on identity Fido to yeah password manager etc but that will be for 2024 release because you even see like um, what's that that that password was that password app that just got To pass last pass they also got compromised to some degree. Yeah, right So people don't realize there's one book that everyone need to read is The book is called this is how they tell me the world ends. Yeah I don't remember the name of the lady that wrote the book, but it's easy to find it's easy to buy an amazon And you know this tells you the the story about like Online hiking cyber attacks etc. You know there are some I'll give you the short version of the story, but like there was a criminal organization hikers organization that got exposed recently Um, they got exposed and so people should know that and it's just one organization organization like this they're plenty They have 2500 people on the payroll That's insane and they have 10,000 auctionaries Okay, so this is the company that is this is the full company. Yeah 2500 Four times the size of ledger in terms of number of people Uh, and if you count the accessories like you know, uh more um But uh, yeah, and the the only job is to hack the sheet of everything that they can find And this is why like you know phishing attacks etc. people are like oh my god like you know They are very dangerous those phishing attacks because the guys that are behind them are very sophisticated It is not just a kid in his garage, you know, yeah trying to fuck people over They are like serious organizations Uh, with very talented people whose job is to do that Do you do you collaborate with other organizations with government to make sure that like your security engineering is Is at the the highest levels because you're a private company and you're and you're competing against again an organization that has four Four X minimum the people that you do Yeah, so We collaborate was uh was a bunch of people in the in our in our industry like this is what the dungeon does This is what our cyber security team does etc. So we have a lot of collaborations with virus other uh teams from the private sector uh in our world So that's good and that's working well because You can sort of collectively, you know, we can collectively protect Ourself, I'm thinking if you're turning into more of a security company because this is not just it's not a rebrand But it's like an evolution of ledger right? Well, you know, I think The why ledger exists was always the same and you know later at heart was always a security company now, you know The how you pitch it were to do your later series. Yeah, it's a different question and also Sometimes people even though The why has always been the same they want to see you know the the what and the how And uh and we've been pitching the what and the how for a long time like you know hardware wallet is you know the what and But the but the business is is much more like security if you if you take the why like you know the From from a very high level the business is really security like we're really pushing the boundaries of security Whether is cryptocurrency or not whether it's a hardware what I don't know like what we're doing is much more Fundamental than this and not saying that the hardware is not cool. I mean see it's great piece of technology that you need to have If you want to protect your secrets and we also have like an enterprise division That does something very similar for enterprise and that also works very well But uh but it's true that what we're doing is much more fundamental and we have always been a security company Yes, I love that um is there anything that I didn't ask you that that you wanted to speak about things that you're working on now Things that uh that are top of mind for for ledger for yourself No, well maybe one thing um and we can wrap up with that if you want like you know to me I feel that Because you're talking about education and people talk about education, but You know self-education is also very important like when you enter into a world uh You need to and this is the story of how I joined Bitcoin etc. You need to educate yourself. You know there is no one That you can blame In the end for you lack of education Uh If you are an investor if you want to play with the coins if you want to enter this world for one reason or another It is your obligation to You know self-educate yourself Uh there many ways of doing it. There are hundreds of books that have been written on this There is a top five for sure And not just on crypto and Bitcoin and what it is, but also on like you know what is value and you know I read many books like this when I enter the space to understand what value is which is which is very interesting Because most people don't understand what value is they they think that value necessarily have Something to back it up Which is not true gold as nothing to back up the fact that he's gold He has certain properties etc etc. Well now now money doesn't have even gold to back it up so correct So so yeah, so this is the thing and you know and when it comes to enterprise I think every CEO has the obligation now to look In crypto and every CEO that runs an exchange has the obligation to look deep into like how do I run my security And not do what has been done so far, which is oh, that's good enough That's not good enough like you need to be Rock solid 100% sure etc because although you know FTX is a fraud Uh And I think it is actually it was not crypto Still it does hurt crypto and so if the next big exchange is going down because Of a lack of sort of security a lack of governance all of these things that can be easily fixed today and now the technology exists You know, I think it's not a service that we're giving to our to our users in general and people should focus Probably less on the top line and sort of more on the fundamentals And the fundamental of this industry, you know, this industry doesn't exist if you don't build it on something that is Extremely secure And if you don't like ledger is fine like there are other vendors out there like you know use them etc But like do you know, I think for any CEO that That is running a company in the space or think that he's going to run a company him or her like going to run a company in the space You know think about security of your users first like that's that's what's necessary. I love this Where where should people go to learn more about what you're working on All the socials where do people want to go to follow you and So ledger.com then you know tweeter You are youtube channel is pretty cool. We have a lot of great content If they want to learn they can go there. Oh, yeah, and we have the ledger academy But basically go to ledger.com and you know, what about yours? Where do they where do they go find you On tweeter And I school because on tweeter I don't understand that thing where people complaining that they got to pay eight dollars to get the blue mark I don't know Pay eight dollars He said dollars and also it's a good business model like you know praise you know I actually thought it was a very good business. I come from a software background So if you get eight dollars monthly recurring revenue across them like a couple hundred million use good for you Yeah, it's great and people wanted. That's why they complain so much. So pay I know yeah Anyway, so mine is the only one to have the little blue check because I pay yeah, and also have a little ledger logo Next to the blue check. Yeah, so you do have the affiliation with ledger now way. Yeah, so that's great because Because we have like so many Scammers yeah, no doubt crypto is bad. It's really bad. I've got at least like 10 running right now on tweeter But the only one to have the the boom mark and the little ledger logo is me. So good. That's that's who you follow I think it's underscore P go TA G A U T I T H I Okay, perfect last question. I ask everybody You've had a great career. It's gone through several different businesses At this point in your life. What is success mean to you? That's that's a tough one for the end well success what what it would mean to me now is to you know build To make that your company. There is very transformative to to the world um I think I didn't finish on what I was saying about credo the problem that once you've built a company like credo Like you know, what's gonna be your next company? And so you got two problems whether was I lucky or was I good? and And if I'm good like you know, I can do it again, but I wanted I wanted to be bigger and so I sort of thought about that and I was like you know be bigger and more meaningful and you know don't get me wrong I love advertising not not everybody loves advertising, but I quite like advertising. I think it's It's a very human thing profoundly human thing, but but you're not curing cancer like you know, yeah and And of course with ledger we're not curing cancer either per se, but we are solving for a much bigger problem a much more fundamental problem which is you know In one word, it's freedom If you cannot protect your secrets online and if you cannot if you cannot own your secrets online then you are not free The world that we're in right now is a dangerous world because if you've only become a number into A big online property that is controlled by someone else Then you're not free by definition and this is a society that we don't want and so me It's not so much in terms of business my ambition, but it's like in terms of impact like you know, I hope that ledger is going to have a huge impact on the world and and how People are people and companies, but like how we bring security to this digital world and you know It's severely liking right now and you know like like we said earlier without security There's no freedom and so if I can bring Digital freedom to the world and so freedom I think that that's my ultimate goal You