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Technology
Computer Services
OTC: NNSWF

Net Nanny Software, Int’l

15831 NE 8^th Street - Suite 200
Bellevue, WA 98008
Phone: 425-688-3008

Gordon A. Ross
Chairman and
Chief Executive Officer

Interview conducted by:
Diane Reynolds, Co Publisher

CEOCFOinterviews.com
April 2002

Bio of CEO,
GORDON ROSS, PRESIDENT & CEO

Gordon Ross’ rich and colorful career spans 30 years as an award-winning Internet filtering pioneer, computer security and telecommunications engineer and an internationally sought-after speaker.  A grandfather whose personal experience and concerns helped shape his mission to make Net Nanny’s products First Amendment friendly.  Ross strongly believes in the positive virtues of the Internet.  He is a firm believer that education, combined with effective technology solutions, proper funding and training for law enforcement will ensure that the Internet remains an open, safe and helpful resource for the global community.

Since 1993, Mr. Ross has lead the company to a position of solid market and brand leadership, beginning with the industry’s first filtering product in January 1995 – Net Nanny.  Since then, he has expanded the Company into a leading developer of other security related products – PC Nanny, NN Pro and BioPassword – that perpetuate his mission of providing powerful tools that give users options and flexibility in protecting their digital data.

Mr. Ross is a nationally sought-after speaker and advisor on issues concerning the Internet, privacy, security, child safety and the First Amendment.   In July 2000, he testified before the Congressionally-appointed COPA Commission on filtering technologies, assisting the Commission in drafting their report about ways to protect children from sexually explicitly material.  He also sits on the US Congressional Internet Caucus Advisory Board, and in March 1999, testified before Sen. John McCain’s Commerce Committee hearing on Internet Pornography.  Under his direction, Net Nanny sponsored and sat on the steering committee for GetNetWise, a 1999 Internet industry online education initiative directed at parents.  The company sponsored, and served on steering committees for the Internet Online Summit in December 1997 and a follow-up project called America Links Up, a national campaign introduced in September 1998 to educate people about the safe, productive use of the Internet.  In November 1998, the Company conducted its own America Links Up event in the Seattle area with AT&T, Microsoft, Edmark and others.

His expertise lead him to speak before international organizations, including the Organization for Economic Cooperation and Development’s forum on Internet content and self-regulation in 1998 and the Bertelsmann Foundation’s conferences on “child Safety and the Internet” in 1997 and international Ratings and Filtering in 1999.  In April 1998, Ross spoke before the Freedom Forum’s annual Technology Conference for Journalism Educators and participated in a panel of technology experts in May 1998 at Harvard University’s symposium, “The Internet and Society.”  He also spoke at “The Internet and Our Children,” an event that Net Nanny cosponsored with Microsoft in May, 1998, and featured Senator Patty Murray (D-WA), former Congressman Rick White (R-WA, 1^st DST), the U.S. Customs Child Pornography and Cyber smuggling Unit, the ACLU and Cyber Angels.

Mr. Ross represented the Internet filtering industry at the federal Trade Commission’s hearings on protecting children and privacy in 1996, and 1997, served on panels for the Internet Librarian ’97 and ’98 conferences in Canada and the United States and participated in a meeting last March with the American library Association and other filtering companies to discuss the state of the technology.   He also offered his expertise to the Cyber Risk Conference in 1997, which was sponsored by the National Computer Security Association.

For his exhaustive efforts to ensure that the Internet is a safe, open medium, Ross received the first annual Internet Humanitarian of the Year award in February 1999, from Cyber Angels, an online Internet safety organization (a Christian Magazine Computing Award in 1997) – all in recognition for his long-standing contribution to further republic understanding of the important issues surrounding child safety and data security online.

Prior to Net Nanny Software International Inc., Ross developed expertise in information flow, routing, and access control and network management while working as a traffic engineer at BC TEL, the largest GTE operating company in Canada.   As the Network Systems Manager, Ross was responsible for maintaining BC TEL’s highly complex routing and communications systems, overseeing the development of the company’s NICS (Networking Information and Communications System).  During his 14 year tenure at BC TEL, Ross also served in Beijing, China, teaching network management to Post and Telecommunication Staff in Beijing.

Mr. Ross graduated from California State Polytechnic University in 1973, holds a Bachelor of Science degree in Electronics Engineering and is a registered Professional Engineer.  He attended AT&T’s Network Management School and has taken numerous management courses from GTE.   He also owned and operated a professional 24-track recording studio for 9 years and has training and experience in television service and design.

Mr. Ross has over 30 years of industry and management experience in: communications, software development and security with organizations including the US Army, CONRAC Corporation, Telus Corporation (a Verizon company), Inside Trak Studios (Professional Recording Facility) and various companies in the home entertainment industry.  Mr. Ross was responsible for the acquisition of the Company’s BioPassword technology and designed Net Nanny the world’s first Internet filter for the consumer.  Mr. Ross’ responsibilities include the Company’s vision, seeking business opportunities to utilize the Company’s patented technology, driving research and development efforts, providing software development direction, and establishing strategic alliances.  Mr. Ross holds a Bachelor of Science degree in Electronics Engineering from California State Polytechnic University.  He is a registered Professional Engineer and Alumni of the Banff School of Advanced Management. 

Ceocfointerviews: Please tell my readers about your company and how it stands today.

Mr. Ross: As it stands today, the company is really a software security company developing software products to really allow the individual, the organization or the government to control the data the way they want to control it and to protect it the way they want to protect it.  The company started out as a security company way back in the early days in BioPassword but that was put on hold to do some technical issues with the technology and we developed Net Nanny first.  The company has always been involved in security and to secure information on a personal level or corporate level. 

Ceocfointerviews: The software, is this offered to everyone?  Is it strictly for companies?  How do they access your products?

Mr. Ross: That’s a good question.  The Net Nanny is a retail product that is sold through retail distributors to stores like Comp USA and it is also available online through online retailers, such as Digital River.  The BioPassword technology is currently being sold to corporations, government, and military.  The Logon products are for securing access to various terminals and operating systems.  We also sell an SDK to companies who may be interested in doing e-commerce transactions online, in order to authenticate the actual user login.   That product is currently being sold to business as the Net Nanny product is being sold to business and consumers, but we are looking at incorporating the technologies and attacking both markets with the technologies.

Ceocfointerviews: Do you see the bulk of the revenue coming from the corporate sales or do you see the majority coming from the retail end of it?

Mr. Ross: The biggest money comes from the corporate sales just due to the volume of business and security related issues.  Over time I think, if you look at the industry as a whole, the consumer is going to be involved with a lot more security issues as we move in to the digital age, especially with the privacy protection issue.  That’s one of the many areas we really focus on.

Ceocfointerviews: Like everything else, you have your hackers out there getting into everything.  That is a constant challenge for you.  How do you keep up with that, go back, update your software and get it back out there to the corporations?

Mr. Ross: By working together within organizations and staying involved with what is going on in the so-called Hacking Community.  We do attend various trade shows and also do various security seminars to make sure we are up to date.   The one thing I think people have to understand about security is, it’s only as good as the people involved.  If someone is looking for a 100% solution, hardware and software, it’s only going to be as good as the people involved.  So, if someone says they have a 100% solution here, be cautious of that.  Dig deep.  Because it is very important you have the right people in security.  I think any hacker will tell you that, especially when it comes to systems.  If you don’t have the proper firewalls or proper protection and system adminstration people looking after your systems, you’re going to be open for attack.

Ceocfointerviews: Now, I think the new thing they are doing, is actually hacking into your website, somehow bypassing firewalls and doing damage to companies’ websites.  Are you addressing this issue?

Mr. Ross: Oh, absolutely!  Most hacking capabilities usually happen through one of two ways, one is called social engineering where   someone will pretend they are somebody and gain access to their password and gain access to whatever account levels they have.  The other is actually running routines in software that are out there on the web, that hackers know about, that can actually steal the passwords and ids’s off the system and they go ahead and use those.  What our technology does is eliminate that issue.  Because with our technology you have a rhythm based password so you cannot replicate my rhythm even though you do get a hold of my id and password. 

Ceocfointerviews: That’s interesting.  How about educating the consumer out there.  What type of advertising do you do?  Do you leave that to partners?  How does that work?

Mr. Ross: We do various types of advertising both on the web and in newsprint, however, we do attend many seminars, both family and security seminars and I personally do speeches at these seminars regarding safety issues and how you can protect yourself today in the digital age, both from a family standpoint and a corporate standpoint.  Being involved in the community is what is important.

Ceocfointerviews: I think the biggest challenge for most parents is trying to keep track of what their kids are doing on the web.

Mr. Ross: Oh absolutely! I think one of the biggest issues when it comes to that is the computer should be in an open environment, not locked up in a bedroom somewhere.  This way they can always walk by and see what is going on in the screen.   It’s part of good  parenting skills.

Ceocfointerviews: Because it does a lot of things, the Net Nanny that is, does it also block Spam mail?

Mr. Ross: We do all kinds of things, if you as a consumer want to block a certain email address, you can certainly do that.  You can put them in a word and phrases list and create your own list.  You can basically control whatever information you want coming in or out of your computer with the Net Nanny.  We try to market products that don’t block access to anything but give you access to block out anything.  In other words, I am a true believer in the First Amendment.  The internet should be kept wide open but we should better train the people who are accessing it, let them know what is out there and what tools are out there to help them better control the data. 

Ceocfointerviews: You’re relying on the revenue stream coming from the Net Nanny?

Mr. Ross: No, that’s currently where the majority of our revenue has come from, but no, the overall revenue will be coming from the biometric technology that we are working on along with other security things we are working on, so as the company grows, what we are growing into here is a world class security agency and that is the goal of the company.   To make sure the technology is a no brainier to use so anyone can use it and it doesn’t require an administrator to use it and explain what is going on.  That is the goal of the company and to make sure the products meet the standards that the company and industry require. 

Ceocfointerviews: Spoke about the other applications that you have.  How far are you on those, when do you see them getting out there and creating additional revenue?

Mr. Ross: That is a good question.  The log on product we are working on right now we are already selling to various corporations.  That is a replacement for the current log on procedure for the current Windows system, NT, 2000 and XP, so when you do the log on for that system you do a biometrically check when you log on.  We use the Microsoft standards so it’s buried right in the operating system, so we don’t do it as an out board system, it’s all a part of the operating system, so it’s integrated within the operating system.  That is one product.  Then we have the Software Development Kit, otherwise known as the SDK.  That is licensed to various online websites.  One is Music Crypt in Canada; they are using it for online authentication for downloading music.  We have another company called Touch Credit, which is looking at the ability of online credit cards. It’s an electronic credit card verification system using our biometric technology.  We have various technologies within the government bodies and some in the health care industries using the product.  Some I can’t mention because of the non-disclosure issues we have with them.  It’s currently being sold and is available in the market, so you can order from the website, or just contact us.

Ceocfointerviews: You are offering this worldwide?

Mr. Ross: Yes we are.   All of our products are offered worldwide for distribution. Net Nanny itself has been available since 1995.  It has worldwide distribution in place, so we are following behind that with the same distributors with BioPassword.  We are distributing basically six out of the seven continents right now.  So, basically the whole world with the exception of Antarctica.  Right now we haven’t developed anything in “Penquineese”. 

Ceocfointerviews: The one product you mentioned was interesting, downloading music.  There has been talk up and down that it’s “illegal”, “it’s copyright”, how is that working?

Mr. Ross: Those are good questions, especially the copyright thing.  The one thing about BioPassword, it’s probably one of the best-kept secrets of the security industry.  It’s been available for years; the technology has been out there for a better part of twenty years.   It’s only been recently that it has been available for the retail market.  The technology has been around through the years.  When you look at the intellectual property detection, when I log on to a website to download something, and I have your id and password, I am downloading whatever it is you are allowed to download.  Also, being billed to your card and not mine.  What we do is to say, if you log on to the system, I know it’s you and your credit card that is attached to this credit card and signature.  If “Gordon” gets a hold of this signature he cannot get in there.  It prevents the kids getting in there and downloading stuff without them knowing about it, or employees for that matter.  With the whole issue of identity theft that has been identified recently as one of the fastest crimes growing in the country, we need BioPassword type technology.  How do I know that my credit is safe?  You can pick up my credit card number and various accounts very easily today.  Once you have access to those numbers, you have access to wherever I can go.  How do I make sure that if you do get a hold of these numbers that it is really me that is going there?    BioPassword solves this!

Ceocfointerviews:  As far as ease of use.  Most people have computers and obviously not everyone knows what they are doing.  Children know a lot more than their parents these days.

Mr. Ross: At Net Nanny, what we do is basically a “no brainier” for installation.  It’s basically a one click and follow instructions on the screen.  BioPassword on the other hand, is sold completely to the corporations but we are working on a consumer product, a stand-alone product that will basically be designed the same way.  It will have some features that the corporate product won’t have because corporations require a lot higher security, so we will make it simpler for the consumer.  So, let’s say if they did break their hand and can’t get on the machine in their home because they broke their hand.  We have an override within the home product and that is something you would not do in a corporation.  The technology is very easy to use.   The BioPassoword Log on product, if you are firing up the operating system and you are running Windows, it looks just the same as if you were logging on to regular Windows except it has an extra screen on there that says you are logging on with BioPassword.   As far as the procedures in all this, it is identical to what you are currently doing.  It’s a real interesting technology, given an ID of eight characters and given fifteen samples of your normal typing pattern, it’s just as accurate as a fingerprint.  So, I want to secure my system so that no one can get into it.  I use my id with my name and my password is my name.  I’m using this so I won’t forget it.  Everyone in the security business will tell you this is foolish.  It is absolutely true, but under the biometric technology, you can replicate my name but not my rhythm.  It really comes in handy especially with all of the various PIN numbers we need for various accounts.  We can now use one for all of them just as long as the technology allows for all of them.  It came from the old days from the telegraph during the Second World War.  When they sent code to you, you can tell if it is I or someone else just from the rhythm of the dots and dashes.  That research was done in Stanford back in the late ‘70’s early ‘80’s and then productized in the early 80’s in the hardware device and that’s when we acquired it all.

Ceocfointerviews: Are you competing with anyone in this area?

Mr. Ross: In the biometric community there are four or five different biometrics out there but within the keystroke dynamics we own the patent. There have been one or two companies out there that said they are doing keystroke dynamics, but we have also notified them through our legal channels, letting them know that they are violating our patents and if they do go to market they can run into problems, however, we are willing to license you the rights to do that.  So if someone is working on this technology, they should be aware that it is patented.  We do have one company that basically told me to “take a walk”, but we’ll worry about them later.   That’s up to the lawyers to work out. 

Ceocfointerviews: As far as growth is it strictly internal growth, or are you looking into acquisitions or relying heavily on partners?

Mr. Ross: All three to be honest.  We do have strategic partners and are driving things internal, however, over time, I’m sure this company will be acquiring additional companies or we may be acquired ourselves.  That is always a possibility out there.  As you grow, people have asked me about that.  They ask, if I were approached, what would I do.  Well, I’ve never stopped creating.  As long as the shareholders are happy.  It’s a public company and therefore it is the shareholders call.  I would certainly not recommend something to the shareholders if I didn’t believe in it. 

Ceocfointerviews: Is this company financially situated to handle whatever comes along?

Mr. Ross: Currently, we are going around on another financing, it’s funny you should mention that.   You never have enough money.  Right now times are tough.  We’ve been pretty fortunate especially during the whole .com issue.  We have product out there and we do have distribution out there.  That has kind of helped us where a lot of other companies have gone through tens of millions of dollars and have gone nowhere.   This company since 1985, the time of inception, has spent somewhere between $15-$18 million dollars.  This over 10 to 15 year period, which I say is commendable to the people involved.  I’ve seen a couple of businesses spend $100 million dollars and are out of business today, so from an investors standpoint I feel this company has achieved a lot for the investors.  Considering the resource base that we have, we have done a commendable job. 

Ceocfointerviews: I know there has been a lot of companies, what it was, and your company was founded before the .com companies flourished and then fizzled out, I think that helped.

Mr. Ross: Yes, that and we’ve come up with the right name.  When it comes to the filtering business we’re probably known as the world leaders in the filtering game even though we may have competitors making that claim.  We do know that when we see the news releases out there it always says “Nanny type filter” so it’s good from a brand recognition from our standpoint.  I just received  some statistics today that   out of a million websites looked at; we’re ranking at about 55 globally right now.  That’s not bad for traffic.  Especially for a small company, I was quite shocked to get that report today.  Number one was Microsoft of course, so I didn’t feel too bad considering we have a staff of about 20 people and we’re 55^th down the ladder.  That’s not bad out of 900,000 plus sites.’

Ceocfointerviews:  What do you feel has kept this company afloat?  What has given you the strength to go on?

Mr. Ross: The people that I work with.  The employees that I have and the investors who have stuck behind me and mainly the community that I have been dealing with.  I’ve been very fortunate to be surrounded by a great group of people.  I think it takes a good team to survive this sort of challenge.  As an individual I wouldn’t be able to do this sort of thing by myself.  I think it is really important to have a good team.   I am a strong believer in team building. 

Ceocfointerviews: I know that a while back there weren’t enough people to fill the positions in your sector.  Did you experience any of that?

Mr. Ross: No, we’ve been very fortunate.   If anything, we’ve been very fortunate during the time around two years ago when everyone was jumping around everywhere.  We’re very fortunate.  We didn’t lose anyone doing that.  I guess because of the environment we have here.   We have a very open door policy and all of the executives have bought into that. We do listen to our employees.  That’s what is important.  It is important to listen to your employees.  They are the ones who are coming up with all of the ideas.   You may have some concepts, but you certainly don’t have them all.  I find it very rewarding working with the people here because they keep me revitalized all of the time.  I’m a little older than most of them as you can tell by my photograph.  I tell people when I started this venture I had a full head of hair and it was all black.  That was about five or six years ago. 

Ceocfointerviews:  During your time here, what was your biggest challenge that you had to overcome?

Mr. Ross: Our biggest challenge to overcome was the financial difficulties we struggled with over the past two years.   That was probably my biggest challenge in my whole career.  The last two years were probably the hardest for me.  I think what brought me through it were the investors behind me, the board that was behind me, and the employees that stuck with me.   Many of them could have just said, “No, I’m out of here”.  So I think it is really commendable for the employees that work here.

Ceocfointerviews: You speak very highly of your investors. Right now, a potential investor is sitting in front of you and is wondering, why, why invest in your company.  What would you say to him/her?

Mr. Ross: Probably because we have the best winning technology which is portable for all sectors of society.   Right now we’re dealing with personal computers and access control.  This technology is applicable to ATM’s, Cel Phones, Hand Help PC’s, applicable to automobiles and ignition systems, and home systems.  Are we going to do all of that work? No, we would license the technology and the code for others in that industry to do that.  Just the growth potential of the technology alone and the people who are involved here, I think that is a good reason.  I think if you look at the fingerprint systems, I think they are the best recognized.  There are about six to eight serious vendors out there.  Problem is, they can’t talk to one another.  On my fingerprint system if you read my print on my system, you couldn’t read it on your system because I use a different algorithm.  Where with our product, it will fit into any system out there, no matter if it’s Windows, Unix, Java, it’s totally cross platform and you can have it function that way and have it customize that way because it’s all software.  The cost of implementation is negligible if you look at it that way.   The maintenance cost is virtually zero and we’re not changing any policies or procedures in a company that are already established.  Whereas, if you brought hardware in you would have the maintenance issues to address, the retraining issues to address.  Most people don’t want to give up their fingerprints, so what we do is capture the id password and capture a signature off of the keystrokes and that’s basically what you do everyday.  So, I think the potential of the technology is where I would tell the investor to look and this “patented” technology will secure anywhere you push a button because it can tell how you pushed that button. 

Ceocfointerviews:  You mentioned service.  Now I know I can get very frustrated with something new that I don’t understand and I may have some stupid questions.

Mr. Ross: There are no stupid questions.

Ceocfointerviews: Sometimes there are.  The thing is anymore, you call for service and it’s voicemail after voicemail after voicemail.  That is very frustrating.

Mr. Ross: Yes that is.  What I do personally, when I have that, is bypass it.  We do have voicemail systems, but one of the things is it’s the cost vs. having someone just sit there.  That can be frustrating, so most of us are using voicemail because of cost, but I think the menus should be relatively simple.  You shouldn’t have to go through ten layers to get an answer.  Maybe, one or two layers and they shouldn’t be long layers.  They shouldn’t be long messages, but short, especially if I’m doing a long distance call.  I think voice prompt systems should be short and to the point and you can staff it with people.   But, if you can’t staff with people, make sure your messages are short and to the point. 

Ceocfointerviews: Are you using your website for other services other than information?  I know some websites offer “open chat”. Do you offer such an option?

Mr. Ross: We offer services off our website called “FAQ’s” and responses to some of the issues you may have using the technology that we answer on the website.  As far as a monitored chat, we’re not there right now, but we will be going there in the future.  

Ceocfointerviews:  I think that can be very helpful because you can do multiple answers on there and have ten people asking questions and you can have one person typing in the answers.

Mr. Ross: The other thing we say is, you go to the website and do a search on your problem because they do have a lot of answers to your questions.  A lot of times your answer will be there before you call and ask for tech support.  One of the biggest issues, and I’m just as guilty as the next person, when we buy new products we don’t read the manuals.  We just want to fire up the product and see how it runs.  It doesn’t matter if it’s a car, or a piece of software and I’m in the software business and I’m just as guilty in not reading the manual.  I just want to get in there and play with the tool, that is, until I run into problems.  Then the next thing is, well maybe I should call tech support.  Well, maybe you should have read your manual.  It would have saved you two things, one is the cost of your tech support call and the other issue is, most of the answers are there and if not, check the website.  If the company doesn’t have a website today, I think they are in trouble.  If you can’t get the answers off of the website or from the manual, then all tech support.  That is a training issue with people and I’m just as guilty as the next person like I said.

Ceocfointerviews: I remember when the products first came out; it was like, twelve books with one disk.  I’m sorry but I’m not reading twelve books.

Mr. Ross: Exactly I think they are a little bit more simpler today, especially with some of the files they come with, like a built in help file today.  Don’t hesitate to click on that and a lot of people don’t do that either.  A lot of help is in that help file, so they should do that.  Unfortunately, a lot of people don’t want to read and just pick up the phone and say “hey, I can’t load the CD, what do I do?  So you are educating them on the training part of a computer and not the product.  It does become a problem, but you try to keep the customers happy.  Are you going to keep 100% of the people happy?  I don’t think so.  I haven’t seen it yet, I would like to, but there is always someone you can’t make happy.  So, hopefully it’s only the one.  What I recommend also, is use E-mail.  I get the odd email with someone who is not happy with the support we have.  So what I have done is personally contact those people and our support people to find out what happened here and sometimes they slip through  the crack and that can happen.

Ceocfointerviews:  Is there anything you would like to add for our readers?