We’re looking forward to welcoming special guest Pascal Gauthier to BREAKERCON 2019, taking place in New York on May 15. Read more about our first-ever event here.
On Wednesday, Paris-based crypto security firm Ledger, best known for its hardware wallets, named President Pascal Gauthier as its new CEO. He replaced Eric Larchevêque, who will now serve as executive chairman of the board. “I have come to the realization that I was spending all my time on day-to-day execution at the expense of critical high level strategic thinking,” Larchevêque wrote in a letter announcing the changes. “I have therefore decided, with the support of the Board, to move to a new role as Executive Chairman. In this role I’ll be able to properly focus on strategy and vision, while also overseeing regulator and government outreach, partnerships, customers, broader business relationships and technology thought leadership.”
We caught up with Gauthier shortly after the announcement was made to discuss his new role and Ledger’s plans for the future.
First of all, congratulations on the new position. What brought about these changes at the top of the company?
When it comes to Ledger, I was a seed investor. Just after the seed investment, I was a board member. In 2017, I joined the company as president to help the founding team scale the company. And so it’s just a natural evolution of my relationship with Eric and the founding team. Even in my previous role as president, Eric and I were sort of co-running the company. We were always very aligned. We’ve been working now for four years together. We like each other, and we like to work together. And the both of us made the decision to change the way that we’re going to run the company, with Eric moving up as executive chairman, me moving to CEO, to just better execute on Ledger and what Ledger needs to achieve in the future.
How do you think that this new arrangement will help you better execute Ledger’s vision?
Eric was in charge of tech and product; I was in charge of sales and marketing. I think for the teams, there was always a confusion, like “Who do I ask?” So we decided that it would be best to lead with one head for the team, to bring clarity and to execute on the core business issues, which are the hardware wallet and the Ledger Vault [a crypto security solution for financial institutions].
What’s your first order of business at Ledger now that you’re CEO?
The problem that we created for ourselves is you had product and engineering on one side, and you had sales and marketing on the other side. For me, it’s important that sales, marketing, product, engineering work as one. And so my first action is to reorganize the teams under me to make sure that we know exactly what the priorities are.
"Now I feel comfortable being CEO of Ledger, which I was not in the past, because I have done my homework."
What have you learned from Eric during your time at Ledger?
I learned a lot when it comes to his vision of the crypto market and to Ledger’s technology itself. Working closely with Eric and the rest of the founding team, I got intense learning and coaching on the things where I was the weakest at the time. Now I feel comfortable being CEO of Ledger, which I was not in the past, because I have done my homework. Eric, as executive chairman, is in charge of the vision and strategy. We’ll make sure that at least one of us is thinking about the future, and one of us is thinking about core execution and the right now.
Bitcoin seems to be rebounding, and perhaps crypto winter is coming to an end. Would another bull market change how Ledger operates?
It’s a tough question. The bull market of 2017 was crazy. Everyone who worked in crypto and had a decent product had their most amazing year. The following years were challenging because that market disappeared—at least 80 percent of it—overnight. And all business models were challenged. Right now, we see a little bump in price, we see good news here and there, but I don’t think we’re in the bull market yet. So to me, right now, nothing changes. It’s just about building the best possible product.
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With Vault and the security that we bring to financial institutions, we are in the deployment [stage] right now. And once it’s deployed, then money will flow in. So I actually think that the bull market is linked to the success of Ledger, in the sense that if you don’t have security, big money won’t be able to flow in. I think the two will be linked: The bull market will come when security is there.
You’re also looking into products focused on the Internet of Things. What can you tell us about that?
The intention right now is to focus on two business units, hardware wallets and Vault. But we have a third business unit that we actually wrongly call IoT—but that’s a placeholder name. It means that there are many objects that are coming to the market in the future that have critical digital assets that need security. If you’re an object and your job is to count something, then you need Ledger technology more than anything else.
I’ll give you an example: a deal that we signed with ENGIE, which is a French utility company. We will install an electronic device on every windmill that ENGIE controls. And the device will count the number of megawatts that the windmill is producing. And we’ll [record that] on a blockchain. So we’re proving that a megawatt was actually produced by this windmill there.
"Most of the hacks that we see in the market are actually not so much the technology being hacked, it’s the process being hacked."
In general, are you seeing increased hacker activity when it comes to cryptocurrencies?
I would say it’s as it was before. But when we talk about hacking for cryptocurrencies, I think there are two things that are often combined together as one, when they’re actually very different. There is the hacking of the technology, and then there is the hacking of the process. Most of the hacks that we see in the market are actually not so much the technology being hacked, it’s the process being hacked. Some of the latest hacks that have been documented were not black hat hacks, they were inside jobs by someone who could steal the coins.
The Ledger Vault technology is solving those internal processes issues: Who’s got access? Where are the rights administrators? [It’s making sure] that you have people that have administrator rights are not the same as the operators, so I can’t give myself the right to spend $1 million if I’m actually the person spending the $1 million. It’s governance that is enforced through technology. So you know exactly who’s done what and who has the right to do what, and you get an audit trail and you get segregation.
In a recent interview, Eric predicted that within five to 10 years, technology will have advanced enough that smartphones will be secure places to hold your crypto. That would mean that people wouldn’t necessarily need hardware wallets. How is Ledger preparing for that near future?
Yeah, I think the hardware industry, including phones and computers, is moving towards more security, because the crypto phenomenon has actually pushed everyone to think more about hardware security. Before crypto, people could steal stuff from your computer, but it was mainly data and it was not directly money. Right now, if you hold crypto in your computer or on your phone, people can actually start stealing money at scale. In the same way that our technology powers Nanos [Ledger’s line of wallets], our technology can power a phone, so you could put Ledger inside a phone. And it’s something that we are actually working on with several phone manufacturers.
That being said, a phone is always with you. If you have high value in terms of coins, do you really want to carry them with you all day long? I don’t think so. So I think there will still be a market for the hardware wallets. In the end, you’d have a hardware wallet at home and some [crypto] on your phone.
Now that you’ve become CEO, what are you most excited about when it comes to the future of Ledger?
What is amazing for me is that every time I go to a conference anywhere in the planet, people come to me and thank me. Of course, it’s a collective effort. But what I’m trying to say is that there is real love and there is a real community around this brand. I think what excites me is to continue building this and launching the Nano X, our next product, which has been well-received by some of the communities that have had the privilege to touch it. As you might know, we have been delayed in production due to [parts] issues. Getting the product into the market is exciting for me, because I think it’s changing the game.
In my first four years at Ledger, I’ve learned all about crypto and made contacts in this world. So from from all angles, I think I’m perfectly ready to be CEO. And I was just voted in by the board. So apparently I’m not the only one to think so.
This interview has been edited and condensed. Photo courtesy of Ledger.