TechTalk: The Future of Data Security: How a Startup Is Redefining Password Management and Security

McKelvey Packard:

Thanks for having me, Fritz. Looking forward to it.

Fritz Spencer:

Likewise. Well, to get us started, I would love if you could quickly give us a brief background on yourself.

McKelvey Packard:

Yeah. So I started my engineering and entrepreneurship and leadership career very early on. I went to Case Western Reserve University in Cleveland, Ohio. I went for aerospace and mechanical engineering, was kind of a little bit of a black sheep from my family. I wouldn't call myself a black sheep, but I guess that's the term you use when you do something completely different from the rest of your family.

My family was all in theater and acting. My mom was an actress. My dad was a stage designer. And what led me into engineering, my dad actually was... Being a stage designer, he actually went to school for architecture as well, so he was always drawing designs in the basement and building things. And so I took after that. I think the typical engineer, you're obsessed with things like Legos, Bionicles, Transformers, et cetera. So always doing those.

Fritz Spencer:

It's interesting to hear how family started on the art side and you ended up the rocket scientist in the family. I'm sure you get enough of those it's not rocket science type jokes at the dinner table then, right?

McKelvey Packard:

Not usually, no.

Fritz Spencer:

Okay, good, good. All right, well, let's move on to Everykey. Everykey is the company that you've. Tell me about Everykey and maybe how you founded it or why and just explain a little bit more about what the business is.

McKelvey Packard:

I'll actually go into why we created Everykey from some current events. I'm sure a lot of people have probably heard of the Ticketmaster breach. It's one of the largest breaches. It might be the largest now. It wasn't just Ticketmaster that was breached. There were several other companies involved in it as well. And the reason that they were breached is these hackers gained credentials for their Snowflake account from the dark web. So that's issue number one.

And then issue number two is they were able to use those credentials to log into the account and there was no 2FA set up on the account. And so there was no fail-safe to block them. They were able to get in. And ultimately, 6 million bank accounts were stolen, as well as 28 million credit card numbers. And data breaches are on the rise, and they're always linked back to these basic protections on the user side. I was actually at the FBI headquarters yesterday.

They were having a panel and one of the panelists, he was in the army and they have a term called brilliance in the basics, and he mentioned that no one has the basics handled right now. No one is brilliant in the basics. So that's what we're really trying to solve here. Only 34% of people use a password manager. Only 45% of people use 2FA, and only a third of organizations require that people use 2FA.

And so the reason for this is the current solutions aren't really user-friendly. Organizations will opt for what is the most convenient for their users. And so they won't put these protections in place. And people often think that in order to be secure, your solution has to be more complicated. So we are flipping that on the head. We want to make security so easy and convenient that it's second nature.

So we've created a patented proximity based solution that will authenticate you to all of your devices and online accounts primarily for password management and multifactor authentication. And we're also utilizing passkeys for passwordless solution. So it creates a really easy solution for the user. You just need to be nearby your devices, your accounts.

And you can log into those very easily without needing to take your phone out of your pocket, without needing to scan QR codes, without any of those things. This also creates a phishing resistance scenario. So since Everykey is a separate physical device and you no longer know your passwords or the two-factor pins, you can't actually give those to any bad actor.

If someone tries to phish you, you wouldn't be able to put that into the credential fields on their phishing website. If someone calls you pretending to be your IT director saying they need your MFA code, you wouldn't be able to give that to you. You need to physically have your Everykey on you.

Fritz Spencer:

Got it. So it's a physical device. Can you tell me more about the device itself? Describe it in its size and capacity, and then also a little bit more about how it functions with these devices that you mentioned.

McKelvey Packard:

So the physicality of it is actually just your phone, it's completely wireless, so you can still just keep it in your pocket. You don't need to plug it into anything.

Fritz Spencer:

Interesting. That's so cool. If I have it on my phone, wherever my phone is, I am, so I can use it to authenticate any of my other devices around me as well as accounts. And I know from our previous conversations that you’ve landed government contracts, can you tell me a little bit more about how you maybe gained those contracts and what they were looking for?

McKelvey Packard:

In terms of the other government contracts we have received, so we are working with the Air Force currently. And given our proximity-based authentication, we can do physical access as well. Unlocking your office door, different lockers and cabinets, we would be able to authenticate you to those as well. So those are the types of things that we're working on with the Air Force.

Fritz Spencer:

Interesting. So you mentioned that you guys have about 3,400, maybe more than that now customers. What are your customers coming to you and giving you feedback about that that has been I guess either life-changing for them or that you have improved their business processes?

McKelvey Packard:

So it's really that proximity authentication piece. It creates a scenario that I was mentioning earlier that is very user-friendly. The solution's out there right now. When we first started talking about this interview, you assumed we were a plugin device. It's very valid that you thought that because that's the solutions that are out there right now.

So the issue with those is employees and users often leave them plugged in all the time, and so your devices are logged in all the time. With us, you just keep your phone on you. And when you walk away, no one can log into your devices or accounts anymore.

Fritz Spencer:

Interesting. Yeah, if I leave my computer unattended, but it's still logged in, I'm vulnerable at that point to any wrongdoers that can either physically access or remotely access my machines. So you mentioned also that you guys had worked on patents and obviously you've patented your technology. Can you tell me more about that process? I know you mentioned it was challenging, to say the least.

McKelvey Packard:

Yeah, yeah, it was. The first few years we were just working on the tech and trying to figure this out. So we're wireless technology. We currently use Bluetooth, but our patent actually doesn't mention Bluetooth specifically. We can use any wireless communication, so Wi-Fi, NFC, RFID, ultra-wideband. We can use all of them, but initially trying to figure out this technology.

Our base technology, so it's for proximity-based authentication, but what we really can do is communicate with multiple devices at the exact same time. And typically, Bluetooth technology doesn't work in that manner. So if you think of a typical Bluetooth headset, if you want to listen on your phone, you first have to connect to your phone.

And then if you want to listen to your computer, you first have to disconnect from your phone and then you can connect to your computer. But we'd actually be able to communicate with both of them at the same time. Our use case isn't really audio. That would be interesting listening to both your phone and your computer at the exact same time, but we can use that for authentication and security related scenarios.

Going back to when we were first developing the technology, since that isn't typically how Bluetooth and wireless communication works, it was very difficult and we actually had multiple employees saying, "Hey, this isn't possible. This isn't how this technology works." And so they actually ended up quitting, but it made us work really hard to figure out the technology and figure out how we could make this work. And thankfully now we have a patent on it.

Fritz Spencer:

Interesting. When you think of computers, you typically think of input response, input response, but having it doing listening and sending signal at the same time sounds like that's a feature you guys overcame. So let's talk more about your entrepreneurship or your investing journey, I guess you could call it that. You have a bunch of well-rounded advisors helping you and invested in you. Can you tell me more about how you're fundraising went and what you guys are looking to do next?

McKelvey Packard:

So Case Western Reserve University, where I went to college, we were actually founded out of Case Western here in Cleveland. We're taking that Midwest feeling and trying to grow it. So we didn't immediately move to the Bay Area or anything to try to build the company as quickly as possible. Like I mentioned, the patent journey was relatively long. It took us a couple of years to develop that. And so yeah, taking the low burn journey of a Midwest company.

Now we're getting to the point that we've built traction and have these companies and the Air Force contract that we can really grow and expand now. So yeah, trying to bring in even more advisors who can help us along that journey and experts in cybersecurity field and things like that. As you mentioned, we did early on meet some exceptional investors and advisors.

So we have Greg Kidd, one of the founders of Work Bowl, and he is actually one of the first investors in Twitter and Square as well. So we're extremely thankful to have him on board with us and as well as some car execs, so the presidents and CEOs of Chrysler and GM and Mercedes-Benz and things like that. So trying to create this ecosystem and this company of proximity-based authentication for your entire life essentially.

Fritz Spencer:

Super interesting. And you mentioned the automotive industry, and I know from our discussions is you have a strong background in automotive. Did you work in it? How involved were you in the automotive and how did that translate to your story with Everykey?

McKelvey Packard:

So I went to Case for aerospace and mechanical engineering. My interest in automotive and renewable energy as well. I mentioned I started a renewable energy company in college, but all of those interests started in high school. One of my senior projects, we were tasked with coming up with some innovative project. I decided to create an electric car that was more affordable and more efficient.

At the time, what was this? This was 2010. At the time there weren't really affordable electric cars out there. There was a Tesla, of course, which it was an awesome car, but I don't think a normal person could afford that at the time. So I did grow up in a middle-class family, and I wanted to create a vehicle that was more affordable to the everyday person.

I knew the way to make that work is that you had to make it more efficient and ultimately remove the batteries that were in the vehicle because reducing the amount of batteries would decrease the weight of the vehicle. And they're also expensive, so you save costs from removing the batteries themselves. And then you can also make it more efficient and remove different materials because of the weight as well.

I always think of those memes of the physicist or the scientist versus the engineer or entrepreneur. To be an engineer and entrepreneur, you need to think outside the box and think in what ways can you use technology and make new solutions. I mean, that's how our panic came to be as well. Like the Bluetooth technology, there was a certain way it was supposed to work, but we thought outside the box and came up with a new solution.

So going back to the car to end that story, I actually ended up emailing Elon Musk the concept for the car. To this day, I am still convinced that it was the inspiration for the Model 3.

Fritz Spencer:

I love to hear a nice ending little anecdote to leave us off there, sending your design to Elon and then him almost certainly using it. That's funny. Anyway, McKelvey, I want to thank you so much for joining me today to have this conversation. It was an absolute pleasure.

McKelvey Packard:

Thanks for having me, Fritz.

Fritz Spencer:

Of course. Of course. And another thanks to our listeners for tuning into TechTalk, the entrepreneurs and innovators who turn to EisnerAmper for accounting, tax, and advisory solutions to help propel their success. Subscribe to EisnerAmper's Podcast to listen to more TechTalk episodes or visit EisnerAmper.com for more tech news that you can use.

Transcribed by Rev