Sunny Ray sits down with longtime friend Austin Hill to trace his path from childhood hacker to privacy pioneer. Austin recalls getting his first VIC 20, running a bulletin board system, and dabbling in phone freaking before turning early security research into a consulting career after finding flaws in the Calgary Board of Education's network. He describes founding the ISP TotalNet in Montreal after betting correctly that a government run free internet portal would never launch, growing it into one of Canada's largest providers before selling in 1996. The conversation moves into Zero Knowledge Systems, the cypherpunk inspired startup he built with his brother and father to bring anonymous IP, identities, and electronic cash to the mainstream, which raised seventy five million dollars and drew comparisons to the NSA's most wanted list before the dot com crash forced a painful pivot. Austin and Sunny also dig into why Canada has struggled to replicate Silicon Valley style tech ecosystems, touching on broken early stage capital structures and geographic fragmentation, before Austin describes his return to startup community building and angel investing in the late 2000s.
From teenage hacker and ISP founder to cypherpunk privacy pioneer, Austin Hill traces his winding path toward Bitcoin and Blockstream.
Where does your story begin for you?
I've always been an entrepreneur and a geek. I got my first computer, a VIC 20, and spent weekends at my dad's accounting office playing games on their IBM mini computer. In the early 80s I ran a bulletin board system from home, played with acoustic couplers, and got into hacking and phone freaking, exploring networks I wasn't always authorized to be in.
How did that hacking background lead into your first real work?
I found security holes in the Calgary Board of Education's network that let anyone dial in and change grades. They told me they'd either call the police or hire me, so I started doing computer security consulting for power utilities, oil companies, and public institutions, training staff and running authorized penetration attacks. I was earning more than my teachers, so I skipped university.
What led you to start your first internet company, TotalNet?
I moved to Montreal in 1994 and couldn't get an internet account because the Quebec government was planning a free, French translated internet portal funded with fifty million dollars. I figured that project would never actually launch, so I raised money and started an ISP called TotalNet, which grew into one of Canada's largest before we sold it in 1996 for twelve to thirteen million in revenue.
What inspired you to start Zero Knowledge Systems?
I'd always followed the cypherpunks and wanted to make privacy and encryption tools as accessible as the browser had made the web. My brother, father and I raised money, hired cryptographers like Ian Goldberg and Adam Back, and built anonymous IP, anonymous identities, and electronic cash. We raised seventy five million dollars, grew to two hundred eighty employees, and got called the company the NSA most wants to shut down.
What happened when the dot com crash hit?
The market for privacy wasn't really there, people said they cared but didn't act on it. We were burning cash faster than we were growing revenue, so we had to fire a lot of the researchers, pivot to a profitable security suite we white labeled to internet providers, recapitalize, and eventually sell part of the company to a private equity partner.
Why does Canada struggle to build a Silicon Valley style tech ecosystem?
It takes time to build any ecosystem, and Canada is spread out with no real concentration like the Bay Area. Our capital structure was broken too, we basically invented the blind pool penny stock scam through the Alberta and Vancouver exchanges, so early capital came from promoters pumping stocks rather than experienced entrepreneurs recycling capital and expertise the way Silicon Valley did.
What did you focus on after Zero Knowledge, around 2007?
I moved back into startups and community building, setting up the first BarCamp and DemoCamp events in Montreal and pushing startup culture across Canada. I also did a lot of angel investing, though I made mistakes writing checks without proper diligence, often projecting what I would do running the company rather than respecting it as the entrepreneur's own.
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