THE UPSIDE OF BEING DOWN
SOMETIMES ADVERSITY OPENS THE DOORS TO NEW IDEAS AND OPPORTUNITIES
BY T. KENDALL HUNT (BBA ’65)

After a long career in the technology industry, T. Kendall “Ken” Hunt (BBA ’65) founded VASCO Data Security International, a global software company that provides strong authentication and e-signature solutions for online interactions. Today, Hunt is the chairman and CEO of the Chicago-based company, which conducts business in 110 countries and has a customer base of some 10,000 companies, including major banks, government agencies and health care organizations. Overall, 100 million people worldwide use VASCO credentials to access applications. Hunt is also a member of the School’s Board of Overseers and the UM President’s Council. Here, he discusses survival in the fast-moving technology arena — where, he says, it pays to adapt and to “never give up.” 


We’ve all heard that perseverance and the ability to deal with setbacks are important ingredients for success. I learned that firsthand, and somewhat painfully, when I was in college. But it turned out to be a valuable lesson for me. 

As a college sophomore, I was attending the University of Miami on a football scholarship, and was a starting halfback with a reasonably good chance of playing in the pros. Then, on a visit to a firing range, someone accidentally shot me in the leg with an automatic, shattering the bone just above the ankle. It took a year and half to heal, and it put an end to my plans for football. I wasn’t happy, but I decided to reinvent myself as a focused student working toward a business degree and a business career. 

My degree did in fact lead me to a good job at IBM, and then to a technology-services corporation, where I eventually headed up a $220 million global division. I was then recruited to take on the CEO role at a company that provided electronic training solutions for corporations. My corporate career was basically one success after another, and the future looked bright — until I was abruptly fired from the CEO position over a difference of opinion with the founder about company direction. 

I was 40, fired, and, of course, shocked and worried. But it actually turned out to be a positive, watershed moment for me, because it forced me to examine myself. I decided I was not going to rush into the next job, but instead take time to think about what I wanted to do. Did I really want to work for a big company again? I decided that I didn’t, and that I was attracted to the idea of being an entrepreneur. 

I started down that path by launching a small consulting firm that helped corporations automate office business processes. But while I was doing that, I also kept an eye out for a business that I could grow. In 1989, I found a venture capital firm that was participating in several successful startups — and in one that was not so successful. This startup had a security technology that would generate a one-time password for people making network connections. This was before the Internet era, and the venture firm had decided that the market was not ready for this technology. But the startup had some patents and a major customer — a European bank that was essentially an early adopter — and my experience in the technology industry told me that this meant that there was real potential. So I took out a second mortgage on my house and bought the company, and that was the start of VASCO. 

Over the next decade, VASCO grew modestly. In some ways, that venture capital firm was right in thinking that this technology was ahead of its time. But the world caught up, and as the Internet took off, so did the need for robust security and authentication. We weathered the technology crash in 2001 and 2002, but then, in 2003, began several years of 42 percent compound annual growth as more and more banks and bank customers went online. We also expanded into areas such as e-government and online gaming, where people wanted to protect their avatars and virtual goods from cyber thieves. But banks remained at the core of our business. Unfortunately, that meant that when the financial industry fell off the cliff in 2008, it dragged us with them.

Once again, it was time to take stock. Certainly, many companies were responding to the downturn by cutting back, but we decided instead to persevere — to take advantage of the profits of the previous several years and invest in strengthening VASCO. While others hunkered down in 2009 and 2010, we hired salespeople in countries where we had had no representatives, such as Turkey, Spain, Chile and India. We also spent more money on research and development to create a cloud-based version of our authentication product, allowing us to sell our software as a service and reach a wider variety of customers. In 2010, we launched 20 new products. 

The economic downturn was clearly tough on this industry, and as the recovery started, many of our competitors were in disarray. We felt a little like the last man standing — but we were standing, after all, and we were well positioned to move forward. Since early last year, we’ve seen growth in requests for proposals and our backlog of booked business has more than doubled. For several quarters in a row, I’ve been able to get on earnings calls with analysts and tell them that we’ve just had our strongest quarter ever. So we are definitely back.

In some ways, getting shot in the leg may be one of the most important and most instructive things that ever happened to me. The lesson, I believe, is that there are going to be problems along the way, but don’t give up. You can adapt and learn and keep going. If you have a good plan and are with good people, you can get through the rough spots and come back strong — even in the midst of bad economic times. 

— As told to Peter Haapaniemi

Fall 2011
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