Lifelock (www.lifelock.com) is a Tempe, Arizona-based company that is developing products to address the problems of identity theft. The firm recently raised venture funding from Bessemer Venture Partners, a Silicon Valley-based venture capital firm, so we thought we'd talk with the company about its services. Techrockies spoke with Todd David, CEO of the firm, to better understand the firm.
What is LifeLock?
Todd Davis: LifeLock is the nation's first and only company that prevents identity theft from happenings, and backs that up with a one million dollar guarantee. If anything happens, while you're a LifeLock client, in any way, we're going to fix the problem using our experts and cover all losses and all expenses up to a million dollars.
How's your service different from credit monitoring tools?
Todd Davis: The biggest difference is credit monitoring and previous offerings are only reactionary. They only tell you after there's been a change on your credit report, or after you've been a victim, and you invoke their insurance policy and try to recover the money. LifeLock actually stops the crime before the happens, by making your information useless to the criminal. In fact, I'm so sure of that, you can print my social security number in the article. It's XXX-XXX-XXXX. (Editor's note: we've opted not to print Todd's social security number, even though he gave it to us and asked us to print it, for legal reasons.)
Hmm, interesting. Can you explain a bit more why you just gave us your social security number to print?
Todd Davis: The reason I'm able to give out my social security number, is because we've gone out and posted fraud alerts with the credit reporting agencies and with CHEX systems. So by placing these fraud alerts--saying I'm worried about identity theft. So before anyone does anything with my credit limit--open a new credit card account, change an existing credit limit, or mailing address, or gives out a new cell phone--anything that happens on my credit report, I want to get a phone call first and get verbal authorization that it's me making the request. I don't mean every time you swipe your credit care at a grocery store or at the gas station, but anything that will affect your credit score--you're going to get a phone call. Even though I gave you my Social Security number, which everyone is going to be able to read, the worse that is going to happen is someone is going to try to steal my identity and turn it into money--whether that is to try to get a charge card at Sears or to buy a laptop computer at Best Buy through financing. My cell phone is going to ring, and they're going to ask -- Todd, you attempting to open this new account -- if I don't say yes, or even if I don't answer the phone, it stops the transaction dead in its tracks before any damage is done to me financially. And then, of course, the thief will move on to someone else instead.
So we understand you're actually venture backed, which is quite unusual for firms in your business. Can you tell us a little bit about that funding and why they decided to invest in your company?
Todd Davis: We're backed by Bessemer Venture Partners. They invested in us because they saw us as the first company to really bring a solution to consumers which was different from what was there. We had the security, and scalability, to be able to support all the consumers out there.
How did you find them and convince them that this was the next thing?
Todd Davis: Well, ironically--they were following us, and they came to us, and literally had to convince us to take their money. We saw that they had great value, and great relationships with financial institutions, the software industry, and the large organizations that are great partners with LifeLock. It made great sense, and we looked at both having the strong, deep pockets so we could grow and have no great impediment to growth, and the great strategic introductions they could make. So, they convinced us to actually take their money.
How did the company start, how long have you been around and what's your background?
Todd Davis: I've been part of a couple of different technology startups that were venture capital backed. My co-founder, Robert Maynard, who is our Chief Marketing Officer, he actually had his identity stolen in 2001. He had to spend seven days in jail, because someone had stolen his identity and opened up lines of credit at a Las Vegas casino. So Robert thought there was something we could do to protect consumers. So about 2 1/2 years ago, we got together, and we also brought in the former vice chairman of Bank of America--who is now the chairman of our board--and the former Chief Information Officer of Visa, and developed this technology. We incorporated in April of 2005, and we are now the fastest growing identity theft protection company and add a new subscriber every two minutes.
So you got to market very quickly with a product?
Todd Davis: We were cash flow positive really quickly. And, because the reason we've had such great growth--and yes we have a good product offer--but the market is hungry. Everyone out there knows that there is a problem with identity theft, but they don't know what to do. All they've heard is be careful with your information and shred your documents. For the first time, they hear someone saying -- we can stop this -- we can give you the peace of mind that you don't have the fix the problem, if you have one. We have amazing conversion rates, and that's why we're growing so fast in the market.
Why haven't the big credit bureaus getting into this business?
Todd Davis: Their real business model is selling your personal data. Credit monitoring is an afterthought. What credit monitoring is, is selling you your own data. They don't do anything to protect it. If you're a victim, it doesn't do anything to fix the problem. But, they will also sell to anyone else who qualifies to buy your data. We are ISO 27001 certified, which is the highest security certification for data handling and data processing. Bureaus would never get ISO certification because they sell your data. Their business model was not built on that foundation. It was built for the sole purpose of selling personal information. They're making millions selling that data, and they're not changing anytime soon.
So how are things going?
Todd Davis: Things are going fantastic. Every month we're setting a record. Every two minutes we add a new subscriber, and we're in a strong financial position. We're now launching multiple national campaigns, have an endorsement deal with Rush Limbaugh and Dr. Laura, and are also talking with other national radio personalities. With every month, we're growing and setting new records.
Thanks for the time and the interview!