This CEO Solving A Quantum Problem = Quantum Security

And welcome everyone to another Smart Money Circle episode. I'm Adam Sarhan. With me today is Carlos Marrera, who's the founder and CEO of Seal SQ Ticker symbol is LAES. Carlos, thank you so much for taking the time and welcome to the Smart Money Circle. Thank you, Adam. Pleasure to meet you. Likewise. So Carlos, I always like to begin. Can you please tell us your story and how you got to where

you are today? Yeah. So I am from Switzerland, Geneva and I was the Chief Security Officer of the UN. So my background is cybersecurity on protecting very critical infrastructures. And in 1999 I, I went out of the UN and create a start up which should become a listed company and the NASDAQ. And since then, I had been working a lot of different technology segments like a space, cybersecurity and now post quantum, which is the focus of our discussion today.

Got it. And then let's talk about your business. Please tell us what you do and some of your competitive advantages. So quantum technology is coming. This is a three to five years issue where quantum computer companies like Rigetti, like IU and Q, they are developing very sophisticated computers that will basically break RSA triple Des. So with that they will break everything. They will break cryptocurrencies, they will break a smart card transactions, they will break access control

into report. So everything is compromisable. So we develop a solution which is based on semiconductors which is CLSQ, which is basically defense a quantum attack. So once the quantum computer attacks anything, if they have that chip which is the chip we are launching this week in Las Vegas here, that chip will defend a quantum attack.

So the US government has issued new directive, we call that the CNSA 2.0 that says the United States before the year 2027, all the public and federal agencies needs to be quantum resilient means that they need this technology. So this is technology's booming now. That's one of the reasons the company went to $1 billion markup a few weeks ago because there is a need to defend critical infrastructure. Otherwise we will have serious problem in the next 5 to 5 to 6 years.

So I, I love that. And by the way, this is the first I'm hearing of that. So it's kind of like cybersecurity 10 years ago, 20 years ago and that proliferate into a massive multibillion dollar business. And you're saying now there's a new potential threat, which is a quantum computing breaking through and you need security there and you're able to step up and do that.

Is that a good? One, yeah, the, the legacy, the legacy security and I have been working on my career is the RSA, which was invented 50 years ago by MIT or triple that. So the entire wall infrastructure is secure by those algorithms. The new algorithm they had being published by NIS, NIST, which is the US government, those are quantum algorithms and they're going to replace those old algorithms. So this is what you put on the

chips right there. There's a new generation of crypto algorithms that basically defend a quantum attack because the quantum computer will not be able to break that specific algorithm. The old ones will be vulnerable. It will take few seconds for a quantum computer to break RSA in few years time. So quantum computers are also expanding. We don't have yet that computer computational capability. This is something will take

three to five years. There was a big debate at the beginning of the year with NVIDIA CEO say, oh, this is going to be 30 years and then the Microsoft say no, actually this is going to be faster. And now the consensus is internationally this is between 3:00 and five years. So we have to get ready now. And This is why the company is growing so fast and and the the attention is so big on house because you have to put those algorithm at the silicon level.

And this is very complicated to put that type of the fan on the microchip on the chip. Then you will use to secure your car, to secure your house, to secure your alarm system and your cameras. All that will be compromisable if you don't have that type of chips. Wow, I love that. OK, so let's talk about that for a little bit and then we'll go into the timeless advice stuff because this is really interesting.

So you're saying that computing power, quantum computing power has Inc is going to increase substantially. Therefore, the defense mechanisms that we used before, almost like bow and arrows, we had before. So you can protect against bow and arrows, but once you have a cannon shooting at you, you got to upgrade the defense system. Is that what you're saying here? We have to upgrade.

Exactly, exactly that analogy is the cybersecurity analog analogy, you know, from the Roman time with the Greek Romans develop a material that was able to break into the Greek protection. So yeah, we are in the same cycle. But this one is actually special because due to the computational capability of Quantum 1 quantum computer is equal to several hundreds of thousands of supercomputers. So 1 quantum computer has

unlimited capability. And the reason is that we are moving away from the from the one and 0 constructions that we have on concurrent, you know, analog technology. Now in quantum computer, these one and zeros can be extrapolated in many different places. So it's not only like it is in the in the current technology which is 1 and 0 in the same place. Now we are coming into one and 0 in multiple places at the same time. So that is what feeds the computational power of a quantum computer.

So, So yeah. So what happened is that it's very similar to what happened in a virus environment when Covic arrived. People develop vaccines, right, to protect against the risk. So we are in this kind of analogy but in the digital world and something very bad is coming and obviously that needs to be defended.

Doesn't mean that quantum computer is bad because quantum computer will also accelerate many processes like you will find the new drugs for cure cancer or you will be able to solve many of the sustainability issues like finding a new solution for climate change from quantum computer. Computational will be actually an asset will be a tool. But as we know technology is not good or bad. It's actually the people behind technology which is good or bad,

right? So if that quantum computer gets in the hands of a rogue country or a terrorist group or somebody that will have other kind of intentions, that will create a huge, huge violation possibility on critical infrastructure. So people will die. I mean, This is why, you know, the car manufacturing industry is so concerned because imagine that you can break a car navigation system and crash the car, right? So, so that will now you can do

that with one car. When the quantum computer is here, you will do with all the cars at the same time. So it is obviously consumers are not yet aware of this. This is happening now at at very high level government level. But the good news in the United States is the government has moved very fast by publishing those guidelines which are basically used now by private sector companies to develop solutions. Before was kind of evangelizing.

You have to explain people why they need to invest in this technology was not easy. Now it's much easier because you have a government framework already designed around this. Yeah, I find it fascinating. Not just consumers, I'm sure investors don't quite understand it yet either. So thank you for sharing your story here. Let's talk about risk management, Carlos. How do you handle risk and what are some mistakes you see people make with respect to risk management?

So the in, in, in companies like like CLSQ you grow very fast, right. You move from being a start up to be a one, one or $2 billion company in this sector. Quantum computers company do not have a lot of revenue. Actually we have much more revenue on the defense side that they quantum players and they are developing quantum computers have by just building a computer we get the INQD wave. They they are announcing very small amount of revenue and huge

amount of losses investment. So you have to mitigate that risk. You know, our, our view is that while we want to get there, we're going to get from an angle where you can start to create revenue now versus creating revenue in five years time. And that's why we put focus on the security aspect. You know, quantum security is now revenue coming today because you're buying the chips versus a

quantum computer. If you are an investor, you you need basically to say, OK, maybe this is going to work in five years time and quantum computer company evaluations are massive, but we are talking about 10, fifteen, $20 billion markup for companies like Rigetti and Q and other or valuations are are smaller. We are we are between you mentioned 600. Actually this is in the last week because the entire AI issues the divesting from the start, but quantum is is is not AI.

Actually quantum is much more mature technology than AI in the sense that is a physical thing. Then you can see, then you can touch, you can play with it with AI in it's, it's, it's a lot of bluff going around AI in our days. So, so this industry for investors, if you are a short term investor, you rather invest in quantum security. If you are a long term investor, then you can offer obviously invest in quantum computer and you can also invest in both.

You know, I think the consensus is then quantum security companies and quantum computer companies will merge in the future into one company. So that means a quantum, a quantum computer needs security, you know, and currently quantum computer companies do not have security. So that means that it is another risk of a quantum computer attacking another quantum computer because they that quantum computer doesn't have security. So that hybrid model is actually consensus in the industry that

is getting together. And in the future, you will have both assets into one company, which is a great opportunity for us because we can go from 1 billion to 25 billion, which is what the quantum computers are having now. Yeah, it's tremendous growth and there's clearly a lot of value that'll be generated for decades to come. To your point, there's also revenue growth, there's earnings growth, there's valuation growth. So there's a tremendous amount of quantum growth, pardon the

pun, ahead here for you. Congrats on being there. So let's talk about timeless lessons, Carlos, you've learned along the way that you'd like to share with the audience. You've been doing this for decades now. You're founder and CEO of a very successful startup. You've got your finger on the pulse. What are some timeless lessons you've learned along the way about life, business, relationships? Anywhere you want to go, please. So I think you need to be

focused on something. I think, you know, I live in Geneva. When the World Wide Web was invented, there was invented in Geneva and at that time that was kind of naive vision that everybody will connect and everybody will be happy and sharing and friendly. Obviously that last few years and then the Web 2.0 arrive with social media and companies taking your data and taking your identity and developing very addictive models which basically contradicted the original vision of the web.

You know what was invented by Timus Lee. So now we are in the Web 3.0, which is a correct of the abuses of the Web 2.0, which is again decentralizing the power of the technology to the person, to the human. And and this is it goes against the business models. So very big companies. So it's going to be a fight, right? Because a lot of companies have been making a lot of money by just data mining data and collecting identities and making captive the users to those

platforms. The web 3.0, which is also the web that uses Quantum, it's a decentralized web. So we are not only connecting billions of people, but we are not connecting trillions of objects. So this is the big opportunity, right? Well, if you have a company and you develop a solution like address to protecting people, you have a very small ecosystem available to you. When you do that for objects,

then this ecosystem is very big. Yesterday, the Amazon founder just launched an AI which will be for the physical world. And that's a very interesting concept. The physical world is your house, is your car, is your airport, is your city, is your hospital, is your facility. So all that needs to be secure, and this was not secure before. So in a journey of entrepreneurs, you need to be very focused on a vision, on a problem that you want to solve.

But I always say that money follows ideas and no ideas following money, right? So, so that means that if you have a very clear vision of a problem that you want to solve, like quantum security, you're going to get a very successful company because so you will need to be very focused on delivering milestone in that journey. At the beginning it will be very difficult eventually, but if you're with perseverance and hard work, you're going to make it happen sooner or late.

We absolutely love it. Well, OK, let's talk about the flip side of that. This timeless lessons. How about timeless mistakes? What are some that either you've made, you've seen other people make? How do you learn from them so you avoid them or don't repeat them? So I think the concept of mistake when you're working on tech, it's actually a different concept than when you're working in in normal life activities, because a mistake is the component of a learning curve.

All technologies based on trials, you know, you try something, sometimes it works, doesn't work, but that information is actually aggregated. This is the same way you are training AI, by the way, AI is being trained the same way. It's always to optimize in something, then doesn't work well. So it can work better with the help of AI. So the, the, the important thing on, on failure is to break the

failure into blocks. You know, so you decompose what a failure is and you're trying to get the good things of it and you incorporate that into your learning process. And then you're trying to improve on the things that you actually make a very big mistake. And, and those things are, if they are identifiable in a different way from the block, you can solve that much easier.

So the traditional failures of companies is like you start to strong, you get excited because suddenly like I did this year, I raised $450 million. So you wanna use that money immediately to make acquisitions. You then have a problem of managing that growth mixing culture when you buy a company. I just bought three companies this year and one of the major issues we had is, is feeding the culture right So people can work together and then they are not

being used to work together. So the human aspect of it is always the more complex thing. Technology is much easier to integrate the human interactions. And this is the the thing entrepreneurs need to be very careful when they go into a very high exponential growth path not to make those mistakes. They're obviously situations where you don't care if you don't make those mistakes because the end game is so big. Like open AI, right, To develop an EGI. They are making a huge amount of

mistakes every day. They make a huge amount of mistakes, but the end goal is so big. The benefit of that is so high, so, so rich that that you don't mind and those mistake be made. So the same thing applies in quantum. I mean, the quantum computer is a new generational Internet generation. Basically, we are moving from things that we normally do with traditional security to an extrapolation of power and security. And that needs a different type

of mindset. You're going to have super intelligent devices that will be fed by unlimited computational power that they are gonna make decisions for you, like AI agents. And those AI agents, now imagine they're really very performing now with a very low

computational power. Imagine that when it gets extrapolated in unlimited computational capabilities, so quantum computer will accelerate AI to EGI and there we are entering into a total different paradigm shift around where we are not any more in control for first time in the evolution of human you have something which is more intelligent than we are and and we are not used to have that.

So, so that will that will require a huge risk assessment and and put the right the right recommendation or regulations to avoid that this becomes uncontrollable. Yeah, I love what you just said. There were mistakes or part of the learning curve. It's brilliant, absolutely brilliant. So thank you for that. All right, next question for you, Carlos. Let's talk about leadership. What makes a great leader? What are some lessons you've learned about leadership?

Anything else you want to share with about leadership please? Yeah. So, so I mean, I would say the, the, the best leader is the, is the one that serves better, right. So leadership means that you need to be very accessible to the talent pool that you are able to collect because they trust you as a leader because they, you know, they, they, they see your vision and they see then you are executing on that vision. But that should be return back to them by empowering them.

I always say that you know human has an amazing unleashed capability that can be unleashed with the right leadership process. So if you are like we are in our companies, you know, we don't have those vertical structure. We are very, I always say that regardless the number of employees that we have, let's maintain the startup spirit. Let's let's not create verticalization or silos or power blocks, then avoid the data and the knowledge to

circulate. So we always see like, like your human body, you know, you have cells, you have organs, you have so many things and they are controlled by your brain, but you don't even realize that you are doing that on daily. Basically, there's not a permissional process in, in the human nature, right? Or in the, in the nature itself.

So if you, we copy that and we apply that to companies, we create very successful, very large companies without falling in the mistakes or those multinationals. Then they become too heavy, too slow and too easy to, to, to basically bring them into the legacy wall because they cannot move fast enough. The companies on the future and the leadership of the future will not necessarily be only judged by the money you make, but but by the good that you

create. The goodness is an asset that has not been properly, this is an intangible asset, right. But in the future that intangible asset is going to become a tangible asset because we, we going to have, we are going to be in a situation where we're going to have more time, more resources, more software behind host, more computational capability to solve very serious problems that we were not able to solve until now. And that will create another

type of leadership structure. I mean leaders will then be judged by the efficiency on solving those problems than just by making a lot of money and have a good quarter on the stock market, right. So that that's going to be the the shift in the future. I love that. So thank you very much for that overview about leadership. Let's talk about adversity being successful. You have to learn how to overcome adversity and

obstacles. How do you handle adversity and what are some obstacles you had to overcome? So when when you create a company, you are alone at the beginning, then you have to bring a person, another person, a five person, a ten person, 100 persons and and basically you are expanding the problem solving capability. Then you will have first by solving your own problem. I mean, when I when I say leaders, then they they try to solve somebody else problem before solving their own

problem. It's actually very difficult, right? Because that that will that will bring you down sooner or late. I mean, you're you, you have to be a very kind of wise person if we're going to call that word like a person that is able to solve all the major challenges, life, my, my, my present to you and convert them into into solution. And then as you move forward, you will be able with that example on that leadership, help others to integrate into that motion.

I mean, I think although we need to look into things that can go wrong, I think the forces should be on things can go right because by thinking of where can go wrong, you are actually focusing on the wrong issues. By focusing on things where it can go right, it will create a situation where you will be more effective on solving things than can go wrong. But obviously the things can go wrong.

As I mentioned before, is scaling too fast is having a situation where your ego takes over and you think you are the master of the universe when you're the knowledge comes from a combination of talent and you are able to bring into your company to be following money all the time, funding, fundraising all the time versus focusing on developing your product. And and as I said before, money

follows idea. Money's aware of your idea already and the money would knows that this idea could eventually become very profitable for that money source. So you don't have to necessarily focus too much on that. You have to focus on developing products then solve concrete problems and not products that that incentive A shareholders or investor to invest in your company, which is in many cases the the reason why people create

company just to raise money. So, so if you go into that road map, you will be very successful and you will be able to transfer that model of their leadership inside your organization. Absolutely love it. Well, thank you for that. Final question for you today, Carlos, What is the best piece of advice you'd like to give the audience or your 30 year old self? So never give up. That's the, it's like an athlete, right?

I mean, an athlete before it gets into the Olympic game, it has to do go into, into many, many steps. Going into the NASA is like joining the Olympic Games of finance, right? You're going to be there together with many other champions that have done the same. But before that, you, you have to maintain that spirit the day. Then you, you do the bell ceremony, which I did it several times already.

It's actually a day where all the collective forces and, and goodwill of the company comes together into a celebration. So I think that should be the inspiration, all of it. Any leader is to keep, keep training. You're not going to be immediately able to compete in the Olympic Games. You're going to have to go through a lot of fight before getting there. A lot of training, a lot of hard work, a lot of sacrifices, but the good news is that one day you're going to be also able to

ring the bell. Absolutely love it. Well, Carlos, thank you so much for taking the time. Thank you for what you're doing. A lot of good here helping us protect about future risks with quantum computing security, and hopefully we'll have you on again soon. This is absolutely fantastic. Thank you very much, Adam for your time as well. Look forward to continue discussing with you in the future.