Start-Up Nation: SurfEasy looks to capitalize on spy shock

A year ago, no one had yet heard of Edward Snowden, the former CIA and NSA employee who has since blown the whistle on just how deeply U.S. authorities are snooping on people’s online habits. The revelations are now fuelling an explosion of interest by both companies and individuals in securing their Internet usage and communications from all manner of prying eyes.

Toronto-based SurfEasy was, pardon the pun, ahead of the wave with its debut in 2012. The startup launched with a credit-card-like USB device that plugged into computers and provided private, encrypted browsing. The service is essentially a virtual private network that shields its users’ traffic from other individuals or entities looking to spy on them. This past summer, the company launched a mobile app that does the same on smartphones and tablets. In all cases, revenue comes from subscriptions ranging from $2.99 to $4.99 a month.

As it turns out, the company’s timing – and reading the pulse of more security-conscious market – has been perfect.

Name and its origins: SurfEasy’s founders wanted a name that was easy to remember. They planned on using a lot of direct marketing to consumers, so they opted against the funny spellings and silent letters that are common with tech startups.

Education and experience: Chief executive Chris Houston is a self-described serial entrepreneur, having been involved in marketing with a few large startups such as Boost Mobile, Amp’d Mobile and Virgin Mobile Canada. Chief operating officer Steve Kelly worked in marketing for both Bell and Virgin. Chief technology officer Athir Nuami did research and development for Symantec and Delrina, which was eventually acquired by Symantec.

Big idea: SurfEasy is a direct response to the likes of Google and Facebook and the trend of users losing control over the electronic footprints they leave on the internet. “We think privacy is a big deal and people are looking for solutions to take back control over some of the privacy that’s been eroded over the past 10 years in their online life,” Houston says.

Company they want to be: Ironically, the company founders want to be like Google, and not so much like other security companies. “Where they’ve lost it over the last few years is in innovation and keeping relevant with where consumers’ concerns are today,” Houston says. “What we admire about [Google] is the willingness to try a lot of different things and accept that not all of them are going to work.”

Funding: The company isn’t disclosing numbers, but funding has come from Mantella Venture Partners, the MaRS accelerator program and a few private investors, including Wind Mobile founder Tony Lacavera and Ray Reddy, group product manager for mobile commerce at Google Canada. Staffing is now up to 15 employees, with the mobile app available for Android and iOS and the USB device selling at retailers including Future Shop and Target.

Reason they won’t succeed: Privacy may be something many people care about peripherally, but unless they personally experience identity theft or some other form of compromise, it’s hard to get them to care enough to pay for it. And even if that can be achieved, there are plenty of competitors in the VPN space, some of which – such as Silicon Valley-based HotSpot Shield – have stronger name recognition.

Reason they’ll succeed: With continuing revelations about how authorities and companies are accessing and using individuals’ online habits without their knowledge or consent, privacy concerns are growing dramatically. One of SurfEasy’s pluses is that the products are easy for mainstream users to understand, which comes from the company’s founders’ experience with mass consumer product marketing.

Last word: Privacy experts think the sky is the limit for security-minded companies such as SurfEasy. “I think there's more use for these types of services than ever,” says Tamir Israel, staff lawyer for the Canadian Internet Policy and Public Interest Clinic. “Having a Canadian-based company doing this also offers some assurance … a Canadian based company might be more insulated from NSA pressure and potential infiltration.”