Cloak, which is bootstrapped and profitable, has built a public wi-fi security solution for the tech savvy and novices alike

By Editor February 18, 2013

Cloak logoA Q&A with Cloak co-founder Dave Peck. The Seattle–based company was founded in 2011 and released version 1.0 of its wi-fi security product in late January.

SUB: Please describe Cloak and your value proposition.

Peck: Cloak keeps you safe on public wi-fi. It’s so easy to use, it’s like the Dropbox of VPNs.

We looked at the world of online security and said “this stuff is just way too hard—why isn’t there just a button I can press to stay safe on public wi-fi?” The world of security lacks good, empathetic design. There didn’t seem to be a good explanation for this, so we decided to set about changing it. Cloak and VPNs seemed like a sensible place to start.

SUB: Who are your target markets and users?

Peck: Initially, we went after tech-savvy users who know what a threat untrusted networks can be, and who understood what a pain it was to set up a personal VPN. Maybe they’d even dabbled in it before and gotten a VPN working from one of their devices, but not their others. We wanted them to use ours, and even poke around at it a bit so that they knew we did a good job on both the security and the design fronts.

As we’ve grown, we’ve started targeting a much broader audience. My mom uses Cloak now. Mobile professionals on the go—salespeople, musicians, photographers, and developers—really love Cloak. We also have a fair number of expats who like to stay safe in their new countries.

SUB: Who do you consider to be your competition?

Peck: There are a surprising number of personal VPN companies out there. We see our first product as in this space, but we see our company as all about bringing great design and experience to the world of security. So we’re looking at things a little different, and as we move forward, I think this will become apparent.

SUB: What differentiates Cloak from the competition?

Peck: When you compare us directly to other personal VPN companies, we’re way easier to use, we have really friendly—and highly tech savvy—customer support, we have a unique end-to-end solution with a dynamic VPN network built on modern cloud computing offerings, and we’re typically price competitive. Honestly, we think Cloak is a no-brainer.

We have some competitors who offer advertising-supported VPNs. This makes no sense whatsoever. Cloak is a privacy product. If you get a free service like Cloak and accept ads, you’re not the customer—you’re the product. It becomes about something other than privacy—I’m not sure what. We want you to enter into a business relationship with us because we want you to be our customer. We’re all about protecting your privacy online.

Finally, we have a lot of great industry-first features. For example, our new OverCloak feature closes the final gap in being able to trust networks you know nothing about. It’s an essential feature for total privacy on public wi-fi, and nobody else offers it. It’s a tricky feature to get right from an engineering perspective, and I suspect our competitors won’t be able to duplicate it for a long time, if ever.

SUB: When was the company founded and what were the first steps you took in establishing it?

Peck: We started in summer of 2011. Peter [co-founder Peter Sagerson], Nick [co-founder Nick Robinson], and I had all worked together in some capacity in the past, and I jumped at the opportunity to bring the three of us together on a new project. Nick is a killer experience and graphic designer; Peter is one of the best engineers I’ve ever had the pleasure of working with. So, we knew we wanted to work together, although we weren’t sure on what.

SUB: What was the inspiration behind the idea for Cloak? Was there an ‘aha’ moment, or was the idea more gradual in developing?

Peck: When we started Cloak, Peter and I were freelance software developers. We didn’t have an office; we were working from Seattle’s many fine coffee shops. There was a heady mix of caffeine, public wi-fi, and sensitive work for clients.  We realized we needed a tool like Cloak for ourselves. We took a look at the competition and thought maybe we could do better. We had an alpha version in friends’ hands in late 2011; we opened up a public beta in early 2012; we finally launched our 1.0 to the world in January, 2013. Somewhere along the way we decided to actually make it our full-time occupation.

SUB: How did you come up with the name? What is the story behind it?

Peck: We went through so many potential names. We had a different one that I really loved for a variety of reasons, but the domain squatters wanted a very unreasonable six-figures for it, so we had to pass. Cloak kept coming up as easily memorable and fun to work with as a brand. To be fair, Cloak is not without its problems: it has odd associations for some people with ‘Dagger’ and the last thing we want people to think of is stealth or clandestine activities. Cloak is an online privacy tool—nothing more or less.

SUB: What have the most significant obstacles been so far to building the company?

Peck: There’s a huge market education barrier. The problem that Cloak addresses is real: hacker tools like Firesheep have been downloaded millions of times and make it easy to crack people using over 80-plus of the world’s largest web sites and services. But it’s not a problem that many people know exists. I think this is changing, slowly. A cynic might say that it’s a little like backup software, only worse—people generally buy backup software after they’ve lost all their precious photos the first time. For many people, the threat against their data that Cloak protects against is a lot more abstract. If you ever want to make it concrete, though, just spend ten minutes with Firesheep in a crowded Starbucks. It’s really distressing how huge the problem is in practice.

SUB: You just released the first version of your product to the public. Why was this the right time?

Peck: As I mentioned, we actually had our public beta out since early 2012. But yes, it was absolutely the right time for us to say “hey, we’ve really improved this product by leaps and bounds since its early beta days. We’re thrilled to call Cloak 1.0.” Our early beta users seem to agree.

SUB: Have you raised outside funding to this point?

Peck: No—we’re bootstrapped.

SUB: How does the company generate revenue or plan to generate revenue?

Peck: At the moment, we’re a very standard consumer SaaS play. We started taking credit cards last year, during our public beta, and I’m happy to say that we also reached profitability last year. 

SUB: What are your goals for Cloak over the next year or so?

Peck: We’re looking to grow the business. We want to find more customer segments that need Cloak and maybe don’t know about it. We want to improve on those areas where our experience isn’t yet good enough. I like to say that we’ve made the simplest and best version of this thing in the industry, but that we can probably make it 100-times simpler still. We think of our current product as the very beginning and we’re excited about the amazing opportunities that lie ahead.

Cloak –