At $111 billion, Palo Alto Networks is one of the most valuable companies in tech. In a conversation at the All-In Summit, CEO Nikesh Arora tells us why cybersecurity is more important than ever, what it was like working for Masa, and more!

Protecting the Systems We Rely On

“Cybersecurity offense is way easier than defense.”

Nikesh Arora

Hackers used to try to compromise an individual. Can we get Francis to click on this fishy link?

Now, they go straight to the source. Instead of going after Francis, they just hack the Microsoft Exchange email server that Francis and 1,000 others use.

Hacking has become a huge business. Victims paid $2 billion in ransomware payments last year alone.

AI will make it easier than ever before to compromise systems. LLM’s are better at coding than anything else, and hacking is largely a matter of code.

To stop the hackers, Palo Alto Networks buys up the best cybersecurity companies it can find. Then, it offers their products to its huge customer base.

This makes it easy for a customer to get all the best cybersecurity software in one place.

The roll-up approach is great for customers, great for Palo Alto Networks, and great for the startups they buy. Everyone wins.

This is why Lina Khan needs to stop blocking M&A. These transactions benefit everyone!

Investing with Masa

“You’re spending too much time on the mistake.”

Masayoshi Son

Before becoming CEO of Palo Alto Networks, Arora worked for billionaire investor Masayoshi Son. Son is known for placing giant bets, including an $11.5 billion investment in the failed office sharing startup WeWork.

Son makes big bets, but he’s also brutal about writing off the losers.

When Arora was trying to save a bad investment, Son told him not to bother. His time would be better spent with the winners.

I disagree with Son completely here.

First off, we made a commitment to the founder. That commitment isn’t just for the winners.

What’s more, in my experience, the best founders don’t need much help. Investors mostly get in the way.

We have a better chance of improving the outcome by focusing on the stragglers.

Some VC’s are even harsher than Son. I’ve heard stories of investors leaving the company’s board and telling the founder not to contact them.

I find that repulsive.

This person is struggling, and they need you! Maybe you can’t offer them more capital, but you can sit down and listen.

Son can take his approach. I and other investors like me will take ours.

Founders can choose who they want to work with.

Wrap-Up

I find Arora’s career fascinating. Very few people have gone from VC to top tier CEO.

Arora is tough, no-nonsense, and low key. He wears a company shirt onstage, just like a rank and file employee.

In a world of flamboyant CEO’s, Arora is a breath of fresh air.

What did you think of Arora’s talk?

More on tech:

Two Million Miles Without a Fatality: Waymo’s CEO at the All-In Summit

The Quarter Trillion Dollar Bet: Benioff at the All-In Summit

Backing One of the World’s Fastest Growing Startups | The Mr. Bray Labs Podcast

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