Neil Patel

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In the dynamic world of entrepreneurship, few stories captivate as much as that of Eugene Malobrodsky. Eugene’s journey is a testament to resilience, determination, and the immigrant spirit, from his humble beginnings in Lithuania to co-founding AnchorFree, a groundbreaking tech company that later went public.

In this blog post, we delve into Eugene’s life, exploring the challenges he faced, the successes he achieved, and the valuable insights he now brings to the world of venture capital.

Listen to the full podcast episode and review the transcript here.

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The Early Years: An Immigrant’s Tale

Eugene’s story begins in Lithuania, a small country with a population of just two and a half million people. He spent his early years in Kaunas, the country’s second-largest city. Like most Eastern European families, he was surrounded by a family that valued education and innovation.

Growing up with an engineering and entrepreneurial mindset and an innate extroversion, Eugene’s journey took a significant turn when he moved to the United States at the age of 13.

Despite the initial challenges of adapting to a new culture and language, his extrovert personality, perseverance, and grit laid the foundation for what would become an extraordinary career.

Eugene was excited about meeting new people, learning, and surrounding himself with people who wanted to grow, and this inspired him to grow as well. He quickly fell in love with computers, taking classes in computer graphics and similar things.

Anchoring Dreams: The Birth of AnchorFree

Upon arriving in Silicon Valley, Eugene’s fascination with technology led him to the world of startups. His early experiences, including working for a company testing Motorola’s Iridium product, fueled his passion for building and creating.

Iridium was Motorolla’s phone that you have on airplanes, and the company, SimulTrans, was doing localization. Eugene was hired as a QA tester to test the product, and he remembers watching Google’s first office outside his window. This stint started him on the path of technology.

Eugene’s next position was as a system administrator, and then, he was in an IT asset management company where he learned the art of selling, realizing that he was really good at selling. He also found that he wasn’t good at taking directions.

Teaming up with a close friend, they started a company using their parents’ credit cards. It quickly grew to a million-dollar company sometime in the early 2000s.

The Genesis of AnchorFree

As Eugene recalls, you couldn’t work out of a restaurant or coffee shop since Wi-Fi was extremely expensive and payable by the hour. Their initial objective was to eventually build a company that would bring democracy of access to the Internet.

This idea gave birth to AnchorFree in 2005. Eugene and his co-founder wanted to be able to work from anywhere, whether on University Avenue or on the streets of Palo Alto or San Francisco, and enjoy working without meeting in an office.

They went on to hire engineers to create software that would allow advertising inserts into the Wi-Fi stream. Using Wi-Fi would be free of cost since it was sponsored by advertising. Two 23-year-olds trying to build something but having virtually no experience caught investor interest.

The duo managed to raise $360M for the company. However, facing the challenges of financing and infrastructure costs, Eugene, along with his co-founder, David Gorodyansky, navigated through a rollercoaster of ups and downs.

Storytelling is everything, which is something that Eugene Malobrodsky was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend Peter Thiel (see it here), where the most critical slides are highlighted.

Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

The introduction to Bert Roberts, a former CEO and Chairman of MCI, marked a turning point, as he believed in Eugene’s and David’s vision and became a crucial mentor and investor. Bert introduced them to his other investor friends, including the Dupont family offices and other “telecom guys.”

The journey continued with the creation of Hotspot Shield, a product that not only secured internet connections but also became a platform for privacy and freedom.

Most importantly, the platform offered protection from attacks by middlemen, especially in countries that had internet censorship.

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Surviving the Storm: Lessons from the 2008 Financial Crisis

The financial crisis of 2008 tested AnchorFree’s resilience. In 2009, the company broke even, and in 2011, it burned through its NOLs. With a board meeting that resulted in a down round and necessary layoffs, Eugene learned a crucial lesson in letting go of ideas that were not working.

This decision, though difficult, set the stage for the company’s survival and eventual success. Eugene took away an important lesson for his future endeavors: For every dollar you spend, you need to make at least a dollar and a penny back.

As Eugene recalls, at the time, the network aspect was not breaking even and was draining money, resources, engineering, IT, and more because the company owned the infrastructure and was like a small telecom.

However, one of the marketing people put out an ad for the Hotspot Shield with the USP of privacy and freedom in one of the blogs in Egypt. Suddenly, the company started to scale rapidly, adding 10 servers every two days.

Beyond: AnchorFree’s Impact on the World

In 2012, Goldman Sachs recognized AnchorFree’s growth and profitability, injecting $52 million into the company. However, Eugene’s commitment to the product and its impact on privacy and security saw the company continue to lead globally.

AnchorFree was the first to create technology that was used by enterprises back at the consumer level. Hotspot Shield continues to be in the top 50 top 20 apps globally and in the number 1 category in the Middle East.

The company was not only generating revenue but also creating a huge impact in the world, providing democracy, privacy, and security to people around the world so they could speak their minds in different regimes.

Turning the Page: From Founder to Investor

In 2020, Aura acquired AnchorFree. After nearly 15 years with AnchorFree, Eugene faced a pivotal moment.

Reflecting on his journey, he decided to channel his experience into supporting immigrant founders, recognizing the sacrifices they make for a better future. He was inspired by the fact that he had brought people from different countries worldwide to work for him at AnchorFree.

This led to the creation of a fund with a focus on first-gen immigrant founders, investing in industries like fintech, health tech, logistics, deep tech, and B2B SaaS. Eugene met Semyon Dukach, who was originally the MIT blackjack team leader.

Eugene also started investing in companies and working as a venture partner. When raising their second fund, Semyon offered him the opportunity to work full-time in the fund. Semyon also brought Lex Zhao as their third partner and successfully raised a $65M fund.

Eugene underscores the staggering stats that 55% of start-ups in America and 80% of American unicorn companies have an immigrant founder or executive.

Traits of Success: Resilience, Survival Instinct, and Team Building

In Eugene’s experience, successful founders share common traits such as resilience, a survival instinct that thrives under pressure, and a knack for thinking outside the box. Moreover, the emphasis on building a team of true believers in the company’s mission has been a crucial factor in achieving success.

The Investor’s Perspective: A Passion for Impactful Innovation

  • As an investor, Eugene emphasizes the importance of founders who genuinely believe in their ideas and aim to make a significant impact on their respective industries.

His commitment to interviewing every person hired during his time at AnchorFree reflects his dedication to fostering a culture that aligns with the company’s vision.

Eugene Malobrodsky’s journey from an immigrant teenager to a founder and investor extraordinaire is a story that inspires and educates.

Anchored in resilience, innovation, survival instinct, and a passion for impact, Eugene’s legacy continues through his investments in the next generation of immigrant founders, leaving an indelible mark on the world of entrepreneurship.

Listen to the full podcast episode to know more, including:

  • Eugene’s journey exemplifies the power of resilience and determination, overcoming challenges from his early days in Lithuania to the trials of building AnchorFree in Silicon Valley.
  • The 2008 financial crisis taught Eugene the importance of adaptability, emphasizing the need to let go of non-working ideas and pivot strategically to ensure the company’s survival.
  • Bert Roberts’ role as a mentor and investor played a pivotal role in AnchorFree’s success, highlighting the significance of experienced guidance in the startup landscape.
  • AnchorFree’s success wasn’t just in financial achievements but in creating products like Hotspot Shield that had a global impact on privacy, security, and freedom of internet access.
  • Eugene’s transition from founder to investor is driven by a purposeful mission to support first-gen immigrant founders, recognizing their sacrifices and potential contributions to the entrepreneurial landscape.
  • Eugene emphasizes the importance of building a team of true believers, highlighting that success in entrepreneurship is not just about individual brilliance but collective dedication.
  • As an investor, Eugene seeks out founders who genuinely believe in making a significant impact on their industries, emphasizing the importance of purpose-driven innovation in startup success.



For a winning deck, see the commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here). 

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The Ultimate Guide To Pitch Decks

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.


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Neil Patel

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