And welcome everyone to another Smart Money Circle episode.
I'm Adam Sarhan. With me today is Carlos Marrera,
who's the founder and CEO of Seal SQ Ticker symbol is LAES.
Carlos, thank you so much for taking the time and welcome to
the Smart Money Circle. Thank you, Adam.
Pleasure to meet you. Likewise.
So Carlos, I always like to begin.
Can you please tell us your story and how you got to where
you are today? Yeah.
So I am from Switzerland, Geneva and I was the Chief Security
Officer of the UN. So my background is
cybersecurity on protecting very critical infrastructures.
And in 1999 I, I went out of the UN and create a start up which
should become a listed company and the NASDAQ.
And since then, I had been working a lot of different
technology segments like a space, cybersecurity and now
post quantum, which is the focus of our discussion today.
Got it. And then let's talk about your
business. Please tell us what you do and
some of your competitive advantages.
So quantum technology is coming. This is a three to five years
issue where quantum computer companies like Rigetti, like IU
and Q, they are developing very sophisticated computers that
will basically break RSA triple Des.
So with that they will break everything.
They will break cryptocurrencies, they will
break a smart card transactions, they will break access control
into report. So everything is compromisable.
So we develop a solution which is based on semiconductors which
is CLSQ, which is basically defense a quantum attack.
So once the quantum computer attacks anything, if they have
that chip which is the chip we are launching this week in Las
Vegas here, that chip will defend a quantum attack.
So the US government has issued new directive, we call that the
CNSA 2.0 that says the United States before the year 2027, all
the public and federal agencies needs to be quantum resilient
means that they need this technology.
So this is technology's booming now.
That's one of the reasons the company went to $1 billion
markup a few weeks ago because there is a need to defend
critical infrastructure. Otherwise we will have serious
problem in the next 5 to 5 to 6 years.
So I, I love that. And by the way, this is the
first I'm hearing of that. So it's kind of like
cybersecurity 10 years ago, 20 years ago and that proliferate
into a massive multibillion dollar business.
And you're saying now there's a new potential threat, which is a
quantum computing breaking through and you need security
there and you're able to step up and do that.
Is that a good? One, yeah, the, the legacy, the
legacy security and I have been working on my career is the RSA,
which was invented 50 years ago by MIT or triple that.
So the entire wall infrastructure is secure by
those algorithms. The new algorithm they had being
published by NIS, NIST, which is the US government, those are
quantum algorithms and they're going to replace those old
algorithms. So this is what you put on the
chips right there. There's a new generation of
crypto algorithms that basically defend a quantum attack because
the quantum computer will not be able to break that specific
algorithm. The old ones will be vulnerable.
It will take few seconds for a quantum computer to break RSA in
few years time. So quantum computers are also
expanding. We don't have yet that computer
computational capability. This is something will take
three to five years. There was a big debate at the
beginning of the year with NVIDIA CEO say, oh, this is
going to be 30 years and then the Microsoft say no, actually
this is going to be faster. And now the consensus is
internationally this is between 3:00 and five years.
So we have to get ready now. And This is why the company is
growing so fast and and the the attention is so big on house
because you have to put those algorithm at the silicon level.
And this is very complicated to put that type of the fan on the
microchip on the chip. Then you will use to secure your
car, to secure your house, to secure your alarm system and
your cameras. All that will be compromisable
if you don't have that type of chips.
Wow, I love that. OK, so let's talk about that for
a little bit and then we'll go into the timeless advice stuff
because this is really interesting.
So you're saying that computing power, quantum computing power
has Inc is going to increase substantially.
Therefore, the defense mechanisms that we used before,
almost like bow and arrows, we had before.
So you can protect against bow and arrows, but once you have a
cannon shooting at you, you got to upgrade the defense system.
Is that what you're saying here? We have to upgrade.
Exactly, exactly that analogy is the cybersecurity analog
analogy, you know, from the Roman time with the Greek Romans
develop a material that was able to break into the Greek
protection. So yeah, we are in the same
cycle. But this one is actually special
because due to the computational capability of Quantum 1 quantum
computer is equal to several hundreds of thousands of
supercomputers. So 1 quantum computer has
unlimited capability. And the reason is that we are
moving away from the from the one and 0 constructions that we
have on concurrent, you know, analog technology.
Now in quantum computer, these one and zeros can be
extrapolated in many different places.
So it's not only like it is in the in the current technology
which is 1 and 0 in the same place.
Now we are coming into one and 0 in multiple places at the same
time. So that is what feeds the
computational power of a quantum computer.
So, So yeah. So what happened is that it's
very similar to what happened in a virus environment when Covic
arrived. People develop vaccines, right,
to protect against the risk. So we are in this kind of
analogy but in the digital world and something very bad is coming
and obviously that needs to be defended.
Doesn't mean that quantum computer is bad because quantum
computer will also accelerate many processes like you will
find the new drugs for cure cancer or you will be able to
solve many of the sustainability issues like finding a new
solution for climate change from quantum computer.
Computational will be actually an asset will be a tool.
But as we know technology is not good or bad.
It's actually the people behind technology which is good or bad,
right? So if that quantum computer gets
in the hands of a rogue country or a terrorist group or somebody
that will have other kind of intentions, that will create a
huge, huge violation possibility on critical infrastructure.
So people will die. I mean, This is why, you know,
the car manufacturing industry is so concerned because imagine
that you can break a car navigation system and crash the
car, right? So, so that will now you can do
that with one car. When the quantum computer is
here, you will do with all the cars at the same time.
So it is obviously consumers are not yet aware of this.
This is happening now at at very high level government level.
But the good news in the United States is the government has
moved very fast by publishing those guidelines which are
basically used now by private sector companies to develop
solutions. Before was kind of evangelizing.
You have to explain people why they need to invest in this
technology was not easy. Now it's much easier because you
have a government framework already designed around this.
Yeah, I find it fascinating. Not just consumers, I'm sure
investors don't quite understand it yet either.
So thank you for sharing your story here.
Let's talk about risk management, Carlos.
How do you handle risk and what are some mistakes you see people
make with respect to risk management?
So the in, in, in companies like like CLSQ you grow very fast,
right. You move from being a start up
to be a one, one or $2 billion company in this sector.
Quantum computers company do not have a lot of revenue.
Actually we have much more revenue on the defense side that
they quantum players and they are developing quantum computers
have by just building a computer we get the INQD wave.
They they are announcing very small amount of revenue and huge
amount of losses investment. So you have to mitigate that
risk. You know, our, our view is that
while we want to get there, we're going to get from an angle
where you can start to create revenue now versus creating
revenue in five years time. And that's why we put focus on
the security aspect. You know, quantum security is
now revenue coming today because you're buying the chips versus a
quantum computer. If you are an investor, you you
need basically to say, OK, maybe this is going to work in five
years time and quantum computer company evaluations are massive,
but we are talking about 10, fifteen, $20 billion markup for
companies like Rigetti and Q and other or valuations are are
smaller. We are we are between you
mentioned 600. Actually this is in the last
week because the entire AI issues the divesting from the
start, but quantum is is is not AI.
Actually quantum is much more mature technology than AI in the
sense that is a physical thing. Then you can see, then you can
touch, you can play with it with AI in it's, it's, it's a lot of
bluff going around AI in our days.
So, so this industry for investors, if you are a short
term investor, you rather invest in quantum security.
If you are a long term investor, then you can offer obviously
invest in quantum computer and you can also invest in both.
You know, I think the consensus is then quantum security
companies and quantum computer companies will merge in the
future into one company. So that means a quantum, a
quantum computer needs security, you know, and currently quantum
computer companies do not have security.
So that means that it is another risk of a quantum computer
attacking another quantum computer because they that
quantum computer doesn't have security.
So that hybrid model is actually consensus in the industry that
is getting together. And in the future, you will have
both assets into one company, which is a great opportunity for
us because we can go from 1 billion to 25 billion, which is
what the quantum computers are having now.
Yeah, it's tremendous growth and there's clearly a lot of value
that'll be generated for decades to come.
To your point, there's also revenue growth, there's earnings
growth, there's valuation growth.
So there's a tremendous amount of quantum growth, pardon the
pun, ahead here for you. Congrats on being there.
So let's talk about timeless lessons, Carlos, you've learned
along the way that you'd like to share with the audience.
You've been doing this for decades now.
You're founder and CEO of a very successful startup.
You've got your finger on the pulse.
What are some timeless lessons you've learned along the way
about life, business, relationships?
Anywhere you want to go, please. So I think you need to be
focused on something. I think, you know, I live in
Geneva. When the World Wide Web was
invented, there was invented in Geneva and at that time that was
kind of naive vision that everybody will connect and
everybody will be happy and sharing and friendly.
Obviously that last few years and then the Web 2.0 arrive with
social media and companies taking your data and taking your
identity and developing very addictive models which basically
contradicted the original vision of the web.
You know what was invented by Timus Lee.
So now we are in the Web 3.0, which is a correct of the abuses
of the Web 2.0, which is again decentralizing the power of the
technology to the person, to the human.
And and this is it goes against the business models.
So very big companies. So it's going to be a fight,
right? Because a lot of companies have
been making a lot of money by just data mining data and
collecting identities and making captive the users to those
platforms. The web 3.0, which is also the
web that uses Quantum, it's a decentralized web.
So we are not only connecting billions of people, but we are
not connecting trillions of objects.
So this is the big opportunity, right?
Well, if you have a company and you develop a solution like
address to protecting people, you have a very small ecosystem
available to you. When you do that for objects,
then this ecosystem is very big. Yesterday, the Amazon founder
just launched an AI which will be for the physical world.
And that's a very interesting concept.
The physical world is your house, is your car, is your
airport, is your city, is your hospital, is your facility.
So all that needs to be secure, and this was not secure before.
So in a journey of entrepreneurs, you need to be
very focused on a vision, on a problem that you want to solve.
But I always say that money follows ideas and no ideas
following money, right? So, so that means that if you
have a very clear vision of a problem that you want to solve,
like quantum security, you're going to get a very successful
company because so you will need to be very focused on delivering
milestone in that journey. At the beginning it will be very
difficult eventually, but if you're with perseverance and
hard work, you're going to make it happen sooner or late.
We absolutely love it. Well, OK, let's talk about the
flip side of that. This timeless lessons.
How about timeless mistakes? What are some that either you've
made, you've seen other people make?
How do you learn from them so you avoid them or don't repeat
them? So I think the concept of
mistake when you're working on tech, it's actually a different
concept than when you're working in in normal life activities,
because a mistake is the component of a learning curve.
All technologies based on trials, you know, you try
something, sometimes it works, doesn't work, but that
information is actually aggregated.
This is the same way you are training AI, by the way, AI is
being trained the same way. It's always to optimize in
something, then doesn't work well.
So it can work better with the help of AI.
So the, the, the important thing on, on failure is to break the
failure into blocks. You know, so you decompose what
a failure is and you're trying to get the good things of it and
you incorporate that into your learning process.
And then you're trying to improve on the things that you
actually make a very big mistake.
And, and those things are, if they are identifiable in a
different way from the block, you can solve that much easier.
So the traditional failures of companies is like you start to
strong, you get excited because suddenly like I did this year, I
raised $450 million. So you wanna use that money
immediately to make acquisitions.
You then have a problem of managing that growth mixing
culture when you buy a company. I just bought three companies
this year and one of the major issues we had is, is feeding the
culture right So people can work together and then they are not
being used to work together. So the human aspect of it is
always the more complex thing. Technology is much easier to
integrate the human interactions.
And this is the the thing entrepreneurs need to be very
careful when they go into a very high exponential growth path not
to make those mistakes. They're obviously situations
where you don't care if you don't make those mistakes
because the end game is so big. Like open AI, right, To develop
an EGI. They are making a huge amount of
mistakes every day. They make a huge amount of
mistakes, but the end goal is so big.
The benefit of that is so high, so, so rich that that you don't
mind and those mistake be made. So the same thing applies in
quantum. I mean, the quantum computer is
a new generational Internet generation.
Basically, we are moving from things that we normally do with
traditional security to an extrapolation of power and
security. And that needs a different type
of mindset. You're going to have super
intelligent devices that will be fed by unlimited computational
power that they are gonna make decisions for you, like AI
agents. And those AI agents, now imagine
they're really very performing now with a very low
computational power. Imagine that when it gets
extrapolated in unlimited computational capabilities, so
quantum computer will accelerate AI to EGI and there we are
entering into a total different paradigm shift around where we
are not any more in control for first time in the evolution of
human you have something which is more intelligent than we are
and and we are not used to have that.
So, so that will that will require a huge risk assessment
and and put the right the right recommendation or regulations to
avoid that this becomes uncontrollable.
Yeah, I love what you just said. There were mistakes or part of
the learning curve. It's brilliant, absolutely
brilliant. So thank you for that.
All right, next question for you, Carlos.
Let's talk about leadership. What makes a great leader?
What are some lessons you've learned about leadership?
Anything else you want to share with about leadership please?
Yeah. So, so I mean, I would say the,
the, the best leader is the, is the one that serves better,
right. So leadership means that you
need to be very accessible to the talent pool that you are
able to collect because they trust you as a leader because
they, you know, they, they, they see your vision and they see
then you are executing on that vision.
But that should be return back to them by empowering them.
I always say that you know human has an amazing unleashed
capability that can be unleashed with the right leadership
process. So if you are like we are in our
companies, you know, we don't have those vertical structure.
We are very, I always say that regardless the number of
employees that we have, let's maintain the startup spirit.
Let's let's not create verticalization or silos or
power blocks, then avoid the data and the knowledge to
circulate. So we always see like, like your
human body, you know, you have cells, you have organs, you have
so many things and they are controlled by your brain, but
you don't even realize that you are doing that on daily.
Basically, there's not a permissional process in, in the
human nature, right? Or in the, in the nature itself.
So if you, we copy that and we apply that to companies, we
create very successful, very large companies without falling
in the mistakes or those multinationals.
Then they become too heavy, too slow and too easy to, to, to
basically bring them into the legacy wall because they cannot
move fast enough. The companies on the future and
the leadership of the future will not necessarily be only
judged by the money you make, but but by the good that you
create. The goodness is an asset that
has not been properly, this is an intangible asset, right.
But in the future that intangible asset is going to
become a tangible asset because we, we going to have, we are
going to be in a situation where we're going to have more time,
more resources, more software behind host, more computational
capability to solve very serious problems that we were not able
to solve until now. And that will create another
type of leadership structure. I mean leaders will then be
judged by the efficiency on solving those problems than just
by making a lot of money and have a good quarter on the stock
market, right. So that that's going to be the
the shift in the future. I love that.
So thank you very much for that overview about leadership.
Let's talk about adversity being successful.
You have to learn how to overcome adversity and
obstacles. How do you handle adversity and
what are some obstacles you had to overcome?
So when when you create a company, you are alone at the
beginning, then you have to bring a person, another person,
a five person, a ten person, 100 persons and and basically you
are expanding the problem solving capability.
Then you will have first by solving your own problem.
I mean, when I when I say leaders, then they they try to
solve somebody else problem before solving their own
problem. It's actually very difficult,
right? Because that that will that will
bring you down sooner or late. I mean, you're you, you have to
be a very kind of wise person if we're going to call that word
like a person that is able to solve all the major challenges,
life, my, my, my present to you and convert them into into
solution. And then as you move forward,
you will be able with that example on that leadership, help
others to integrate into that motion.
I mean, I think although we need to look into things that can go
wrong, I think the forces should be on things can go right
because by thinking of where can go wrong, you are actually
focusing on the wrong issues. By focusing on things where it
can go right, it will create a situation where you will be more
effective on solving things than can go wrong.
But obviously the things can go wrong.
As I mentioned before, is scaling too fast is having a
situation where your ego takes over and you think you are the
master of the universe when you're the knowledge comes from
a combination of talent and you are able to bring into your
company to be following money all the time, funding,
fundraising all the time versus focusing on developing your
product. And and as I said before, money
follows idea. Money's aware of your idea
already and the money would knows that this idea could
eventually become very profitable for that money
source. So you don't have to necessarily
focus too much on that. You have to focus on developing
products then solve concrete problems and not products that
that incentive A shareholders or investor to invest in your
company, which is in many cases the the reason why people create
company just to raise money. So, so if you go into that road
map, you will be very successful and you will be able to transfer
that model of their leadership inside your organization.
Absolutely love it. Well, thank you for that.
Final question for you today, Carlos, What is the best piece
of advice you'd like to give the audience or your 30 year old
self? So never give up.
That's the, it's like an athlete, right?
I mean, an athlete before it gets into the Olympic game, it
has to do go into, into many, many steps.
Going into the NASA is like joining the Olympic Games of
finance, right? You're going to be there
together with many other champions that have done the
same. But before that, you, you have
to maintain that spirit the day. Then you, you do the bell
ceremony, which I did it several times already.
It's actually a day where all the collective forces and, and
goodwill of the company comes together into a celebration.
So I think that should be the inspiration, all of it.
Any leader is to keep, keep training.
You're not going to be immediately able to compete in
the Olympic Games. You're going to have to go
through a lot of fight before getting there.
A lot of training, a lot of hard work, a lot of sacrifices, but
the good news is that one day you're going to be also able to
ring the bell. Absolutely love it.
Well, Carlos, thank you so much for taking the time.
Thank you for what you're doing. A lot of good here helping us
protect about future risks with quantum computing security, and
hopefully we'll have you on again soon.
This is absolutely fantastic. Thank you very much, Adam for
your time as well. Look forward to continue
discussing with you in the future.