DALLAS — This story was originally published by our content partners at the Dallas Business Journal. Read the original version here.
Michael Fey could have easily chosen to put his company, Island Technology Ltd., in Silicon Valley.
He didn't. Instead, the cybersecurity startup with a $3 billion valuation is based in Dallas.
Fey, a former executive at large software companies McAfee Corp. and Symantec Corp., moved to Texas about 20 years ago and has spent much of his career in the software and cybersecurity space commuting to the Valley.
Historically, if you were creating a startup, it was the place you wanted to be. Fey recalled a time when startups in the San Francisco Bay Area would get valuations five times higher than startups elsewhere.
When Fey co-founded Island in 2020 in the middle of the COVID-19 pandemic, he realized things had started to change. He called the top 20 engineers he had worked with and found that none of them lived in Silicon Valley anymore.
"They had all spread to the wind," Fey said. "At that point, it was really what makes sense for recruiting. I couldn't convince anyone to move to the Valley but I've had 100% success moving people to Dallas."
Fey's experience demonstrates how Dallas-Fort Worth continues to emerge as a promising place for entrepreneurs to start-up businesses and for venture capitalists to invest their money. The Island CEO discussed his experience starting and growing the unicorn — a privately held startup with a billion-dollar valuation — during the Venture Dallas conference on Oct. 30 at the George W. Bush Presidential Center at Southern Methodist University.
Today, Island has more than 300 employees and has raised almost half a billion dollars, including a $175 million series D round that closed in April. The company offers a secure web browser for use by businesses to give them more control over data and privacy.
Fey originally wanted to be an astronaut but "failed miserably" before getting into the software industry. After leaving Symantec, now Gen Digital Inc., in 2018, he took time off with an eventual plan to go into private equity and "help reshape companies." He also had a burning itch to do a startup, but had not come across the right idea.
"I just didn't want to do one that the premise was I'm going to do it better than the other guy. That just didn't excite me," Fey said. "If I was going to put all my effort into an idea, it had to be big enough, exciting enough that I knew I could work on it every day, all day. You know, 20 hours a day."
The idea — "changing the way browsers work for security reasons" — came from from Dan Amiga, Island's other co-founder and chief technology officer.
Being located in Dallas has benefitted Island, Fey said. It's easy to recruit people to Texas, he said, and DFW has a wealth of cybersecurity talent because of the explosive population growth and local universities. He also said he doesn't have to compete as often with other startups for engineering talent like he would in the Valley.
"We have the capacity for massive organizations [in DFW] and as a startup, it's a great place to be because I'm not fighting with 7,000 freshly funded startups," Fey said. "Everybody isn't asking me what their equity table looks like."
Fey also discussed the pros and cons of getting capital infusions from "strategic" investors, or companies that invest in startups for more than just a financial return. Such investors are often looking to enter new markets or acquire new technology. Island's biggest backers include Coatue Management LLC, Sequoia Capital and the venture capital arm of Capital One Financial Corp.
At Island, Fey said the company sought investors who have relationships that could be beneficial.
"Actually make sure that the money comes with help," he advised the audience.
