Montreal Tech Watch

WebSense, a computer security firm, has announced it acquired Karabunga, makers of Defensio, a strong anti-spam system available for wordpress installs and to other web applications which would want to filter user-generated content.

Financial details of the acquisition, which closed 31st Dec. 2008, were not disclosed.

Carl Mercier, who founded Defensio, joins WebSense as director of software engineering.

Defensio will be integrated into WebSense’s current systems and products. By using defensio’s “intelligence system”, they have been able for instance to discover malware and trojan on various websites, such as Barack Obama’s my social social network. This is very good for Defensio, which has been so far a hyper-specialized product: with the integration at WebSense, it could be used for broader usages, for a bigger market, and WebSense could bring it to the next level. In retrospective, Karabunga might have taken years to offer these services to customers.

Needless to say that it’s very good for the Montréal/Québec/Canadian tech scene. In rough times, this is exactly the right proof to remind new entrepreneurs that there are opportunities to grab. There were voices such as StartupNorth, Rick Segal, Mark McLeod, Ben Yoskovitz, Austin Hill, Mark at Wellington Fund, TechVibes, David Crow amongst others, which covered extensively the Montreal and Canadian tech scene, acting as cheerleaders, event instigators, starting camps & conferences, and writing about entrepreneurship & venture capital; but if one had to step back, you’d realize that there were in fact lots of chatter, and not enough startups, not enough products developed, not enough entrepreneurs entering the system. And most importantly, one shouldn’t forget the final measure of success is how many successes you get. 

Success can be acquiring paying customers to sustain and grow the company, squarring a revenue model (à la plentyoffish), getting the startup public, or being acquired. 

For me, if we should have a hall of fame for the year, Carl Mercier should be there. We’ve got here a serial entrepreneur, who started Karabunga, just a few months after coming back from the valley, launched Defensio quickly, with a clear and defined value proposition, managed somehow to sustain the service while updating the technology used (changing from Rails to Merb for the front-end) and coping with an unproven technology (AWS’s EC2), and then successfully sold the product, all in a less than a 2 year cycle. 

Of course you can’t exactly copy & paste Defensio’s success story, but if I have to sum up the startup’s strong points, it would be:

• pinpointing a problem to solve. In this case, spam was a growing pain, and was talked about by all bloggers and all “influenters” 
• getting a product which could be marketed & monetized very clearly. Everybody understands the freemium model, where blogger would get the service for free, and professionals and companies would pay to use the service for intensive use. 
• focusing on the delivery

One can’t deny that Carl was lucky in a sense, WebSense was the perfect buyer, and Defensio could also be overwhelmed by spam at one point. There is also the last thought that Carl could have gotten VC investment, still keep ownership, and then grow the service for a couple of years, to become the white knight of security on the web. But those didn’t happen.

Congratulations Carl!

More on the acquisition:

• Interview with Carl Mercier at Mark McLeod’s blog
• Thoughts about the acquisition, by Ben Yoskovitz