CEOcast.com Interview

 CEOCAST.COM: INTERVIEW WITH LOCKSTEP SYSTEMS, INC.

CEOcast: This is Ken Sgro with CEOcast, my guest today is Karl Forster. Karl is the Founder and Chief Executive Officer of Lockstep Systems Incorporated a privately held company.  Karl, welcome to CEO Cast.

Karl Forster: Thank you for having me.

CEOcast: Why don’t we start out with you giving our audience a brief background of your company and the main products that you offer to the community.

Karl Forster: Our flagship product is called WebAgain.  What it does is it monitors a web server such that if a hacker defaces a web site it will automatically detect the hack and repair the damage to the web server.  And when it does that it takes the files from the web server that have been altered, places them into a quarantine, replaces those files with the original copies from an archive and then sends notifications to the webmaster to inform them that their web site had been altered and has been repaired.  It is the only product that concentrates on the repair to the damage that a hacker does to a web site.  A second product of ours is called SiteRecorder.  SiteRecorder concentrates on backing up web sites remotely, which is great for people who need off-site storage of their website content.  And it is also important for companies that need an audit trail such that they can receive notifications each time their web site changes.  This gives them a complete history of their website so they can roll back their site in the event of an unplanned event or problem, such as an equipment failure or something of that nature.  Those are our two primary products.  We have concentrated on web site utilities.

CEOcast:  How do you go about marketing these products?

Karl Forster:  I would like to introduce Mark Dixon, our VP of Business Development, and he can go through a lot more of the details of the marketing plans here at Lockstep.

Mark Dixon:  Hi, this is Mark Dixon.  We are focusing primarily on developing a reseller and distributor channel that focuses on what we call “expert recommenders,” people who understand the need for protecting the integrity of web site content and then delivering solutions for that to their customers.  We currently have 4 distributors in the world, and a couple of dozen resellers, all that focus on the web site security marketplace.  We are actively recruiting resellers to extend that network.  And we also provide direct sales through our web site for customers in locations without a (local) distributor. 

CEOcast:  What is the compelling reason for using your products?

Mark Dixon:  The compelling reason is (for) someone who places value on the content on the web.  That might be measured in terms of their public image that they present to their customers, the protection that they want for their site to ward off legal risk, or the cost of repair.  It is compelling to someone who places the value on their web site as an integral part of their business enterprise.  So we focus on businesses and government entities that have positioned their web site as crucial to their business.

CEOcast:  How do you reach these people, to use your product?

Mark Dixon: We are doing direct marketing to them, to webmasters.  And we have (various) public relations activities underway to inform the general marketplace.

CEOcast:  How do you finance the company?

Mark Dixon:  The company is privately funded by the founders and angel investors.

CEOcast:  What do you perceive to be the greatest challenge in this current market?

Mark Dixon:  I think the challenges, right now, are awareness.  We are a small company and we recognize that we must expand the awareness about our company.  The second challenge is raise the awareness of people who own web sites about the emerging threat of web site intrusions.  In many ways, you may say that we sell web site insurance for them, insurance against the risk of damage and loss of their web site, and our software provides that insurance to them.  (This second challenge is) in informing them about the risk which they face.

CEOcast: In terms of vertical markets, have there been any that seem more amenable to using your products?

Mark Dixon:  One key vertical market is financial services, obviously they are very concerned about the content of the web sites which they present to their customers.  And the other would be government entities, both at the state and local levels and the national and international levels.

CEOcast:  Are there any new products that you have in development that might be introduced in 2002 that you can at least allude to at this point?

Karl Forster:  Our primary development focus is on the growth of product line.  Our products are sold in retail form, as a boxed copy that someone buys and installs at their location.  Where we are seeing a lot of growth potential is in the service offerings of both WebAgain and SiteRecorder, such that hosting companies can serve this (software) at their location and sell the use of the service to their customers.  Effectively this is on a rental basis or on a monthly basis, which is convenient for the end user because they do not have to install the hardware to set up an additional server at their location.  They can just use a hosting company for that.  And it is also convenient that they know a professional is maintaining the product on a 24/7 fashion.  These are the areas that we are pursuing for the products.

CEOcast:  Last question, what are the targets that the company has set for the year 2002?

Mark Dixon:  Our 2002 (efforts) are to accelerate the sales of WebAgain and SiteRecorder and gain a significant foothold in both the domestic and international markets.  We are focusing primarily on revenue growth acceleration in 2002.

CEOcast: Karl, Mark, thanks so much for being with us today.  I’ve been speaking with Karl Forster, the CEO and he was assisted by Mark Dixon, who is the Vice President of Business Development for Lockstep Systems, Incorporated.  This has been Ken Sgro for CEO Cast, where Wall Street listens.