Mordy Hackel is the founder and principal at KJ Technology, a managed IT services company in Manhattan. Hackel spoke with Crain Currency about working with clients in the family office space on strategic IT planning and the pressing issues of cybersecurity and artificial intelligence.
What led you to start KJ Technology?
My previous employer was a consulting firm by name but a staff augmentation company in practice. Being employed by one company and deployed at another didn’t allow for feeling at home in either place. Back then, technology assistance was expected to be rude or even offensive.
At that time, “SNL” ran an ongoing skit featuring Jimmy Fallon as Nick Burns, the obnoxious computer guy. I believed clients deserved more, and we could create that enhanced experience. Our approach was to hire great people, give them a sense of community and develop a client-centric culture while providing expert, prompt, professional services for our clients.
Many of KJ Technology’s customers are family offices. Can you share how you first started building strategic relationships in the family office space?
Our first client was a family office, though we didn’t know it was called a “family office” 25 years ago. The firm managed the business dealing and day-to-day of a high-net-worth family. The principal loved technology and wanted great technology both at home and at his office.
Over time, he referred us to his friend who was having a particularly odd issue. His firm’s calendar in Microsoft Outlook was randomly changing similar appointment locations anytime an appointment was updated. The two assistants who were managing the CEO’s schedule could hardly afford for him to go to the wrong place for a meeting—he was scheduled out months in advance. The CEO was annoyed, and his assistants were confused and frustrated. After troubleshooting the issue and clearly identifying how these changes occurred, we engaged (really, fought) with Microsoft to have them fix the software. Finally, Microsoft admitted the anomaly and agreed to issue a fix. The client showed his gratitude by hiring us for both his business and his residence.
We continued to build strategic relationships in the family office space by delivering high-quality IT services that meet unique needs. In 2002, we were asked to implement a full home Wi-Fi solution for an entertainment industry CEO at his Upper East Side townhouse in NYC. His guests were household names, and we understood that privacy, discretion and trust were critical to success in this niche market.
We sought to continue to earn our clients’ faith by being discreet, responsive and providing expert advice and services. Years later, that CEO sold his home, and the new buyer hired us to upgrade the network to the latest and greatest ... and so it goes.
What do you think are the biggest cybersecurity issues that family offices need to be aware of today?
There are several key factors that family offices need to be mindful of. These include:
- Accidentally providing unauthorized access through phishing or targeted phishing (also known as whaling). This is exacerbated with the rise of AI creating a risk for impersonation [and] now able to gather and stitch together vast data.
- The introduction of AI-based tools is rapidly changing the creative interaction between people and computers. Interviews, podcasts, photos and other video can easily be combined to reproduce a like image, with a message that may be damaging or affect loss.
- Information or money mistakenly sent to the wrong place. Again, the issue is more people-oriented, underscoring the need for cybersecurity awareness education. Nothing is truly free. In a situation where the product is seemingly free, you are the product. Or said more clearly, the data you generate will be captured and monetized.
- In the family office space, this risk is magnified, as sensitive information can be entered into a free product, and the rights to that information are given away though an end-user licensing agreement (EULA) that most accept without reading.
- Technologies such as data loss prevention, mobile-device management and encryption can help mitigate the risk of accidentally sharing private information or being able to recover private data from a lost or stolen device.
- Lastly, ransomware. How it got in is less relevant than having it get out that you paid a ransom and needing to worry about being re-ransomed. Protect your systems and have a number of backups. Consider an air-gapped backup for key information.
There is a balancing act between privacy, convenience and security. How do you address this issue with your clients?
Security and privacy require restrictions and limitations. These are usually inconvenient and sometimes cumbersome. Most people just want easy. However, in most cases, the greater context creates space to embrace protections for the greater benefit. People working in this space appreciate the heightened risk profile and are usually open to evolving habits to improve security and minimize reputational risk.
Our clients appreciate that we discuss the risks as well as the pros and cons of the security approach. Getting to level-set on a risk assessment is vital so consent can be reached on a go-forward plan.
Sometimes, speaking truth to power needs to happen as well—“No, you cannot remove the password from your phone.” This was an actual conversation my business partner had with a famous entertainer. Despite his wishes, we would not allow him to be exposed in this way.
How do you and your team approach working with family offices that often have multiple generations of stakeholders?
Regardless of the client demographics, it's essential to understand what is important to each person. Sociologically, it would probably be an interesting study on the interaction of different generations in the same family businesses. There is a tension between the digital-native generation and baby boomers, who align with the idea that many things are best kept private. Said differently, not every plate of food I eat should be posted online.
On the business side, in our experience, the more successful firms seek to promote people’s strengths. In either case, any technology, new or old, is simply a tool. What matters is how it’s used. Tools themselves seldom have inherent value. Making the technology serve the people at each level is something we believe in passionately. It is often the other way around.
Artificial intelligence is a major talking point right now. How do you think AI could be a tool for family offices?
In a word: carefully. Think of AI as a friend who knows everything but is also a pathological liar. AI should be used, and like with everything new, used with caution.
AI often answers complex questions in a nonmeaningful or even inaccurate way. So, fact-checking and properly prompting requires time, effort and treasure.
So, is AI as it currently stands a benefit? We believe the answer is yes, and it will continue to evolve and improve.
For today, here are some practical ways to implement AI in your organization:
- Summarizing or better explaining long/complex documents.
- Getting started writing. Often a blank paper generates writer’s block.
- General editing in real time.
- Meetings: Transcription digests when someone cannot attend a meeting.
- Meetings: Transcription digests when a reminder is needed of what was discussed, agreed to, who has next steps, etc.
- Virtual assistant, such as gathering and digesting travel information (flights, cars, etc.).
- Email thread summaries.