Creating IT-Security Start-Ups
Benjamin Rohé,
Founding Managing Director
Sorry for the Layout
•  It had to be that way !
Market, Predictions and Examples
Investors Perspective
Cyber Security Startups?
Cyber Security Startup!!
•  Generations of Cyber Security
1993: Mosaic and the rise of the commer...
No crystal ball is required to predict
that high-profile security breaches
will continue to make
the news in 2015
Two Real Cyber Security Drivers
•  Governments and corporations are under attack
from cyber hacks (no longer simply a nuis...
Businesses Under Fire
•  Hackers are stealing around $250B/year in IP - NSA
Director, Gen. Keith Alexander, calls these at...
Business Under Fire
Money Follows Problems
•  Driving investment in innovative technologies
- $391M in just 16 companies between Jan 2012 and ...
Security Predictions For 2015
Security predictions
from: Blue Coat,
Damballa, FireEye,
Fortinet, Forrester,
Gartner, IDC,
...
Exit Opportunities for Founders
and Investors
•  Mergers and Acquisitions (M&A)
–  Cisco <- Sourcefire ($2.7B or ~10x annu...
Intelligence Services:
Key Investors1
•  106 Startups Who Received Investment from
the C.I.A* Since 1999 In-Q-Tel has been...
Case-Study: One Of The Most Prominent
Intelligence Financed Startups
As of 2013, Palantir was used by at least 12 groups w...
https://www.youtube.com/watch?v=VJFk8oGTEs4
Palantir Facts
•  Founded in 2004 by Peter Thiel, Joe Lonsdale, Alex Karp, Stephen Cohen,
Nathan Gettings; 1.500+ employee...
Global Cyber Security Spending to
Reach $76.9 Billion in 2015: Gartner
•  According to the IT research and advisory firm, ...
J.P. Morgan CEO: Cyber-Security
Spending To Double!
•  J.P. Morgan Chase & Co. Chairman and Chief
Executive James Dimon sa...
3 Solid Tips From Founders
Of a Security Startup2
•  To scale a startup too early or grow too quickly is not necessarily a...
Reaching Out to the Growing
Community (Examples)
https://angel.co/cyber-security
2014 surveys and annual reports
Publisher Title
Appriver Global Security Report: End-of-year report 2014
Cisco 2015 Annual...
Case Study: Steganos
4 Key Products …
.. For a Post-Snowden World
Growing a Cyber Security Company
with Success
•  B2C:
–  PR: own the subject
(steganos: snowden/
data privacy)
–  Affiliat...
Affiliate Marketing (B2C)
http://www.startupnation.com/articles/affiliate-marketing-101-understanding-the-basics/
Closing the Loop
•  Expertise Counts
–  Domain expertise is key (for investors and buyers)
–  Does the team really know it...
Closing the Loop
•  Government Cyberwarfare & CIP
–  More than 80 companies work with the NSA on
cyberwarfare and surveill...
Final Remarks
•  Security still a reflex reaction to an attack
•  IT infrastructure security still a one-time, ad hoc effo...
Contact Information
Benjamin Rohé
br@gtec.berlin
+491739751021
www.gtec.berlin
References
1.  https://mattermark.com/106-startups-who-received-investment-from-the-c-i-a-most-
frequent-in-q-tel-co-inves...
NATO Cyber Security Conference: Creating IT-Security Start-Ups
NATO Cyber Security Conference: Creating IT-Security Start-Ups
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NATO Cyber Security Conference: Creating IT-Security Start-Ups

introduction about the cyber security startup landscape, what are the drivers, why businesses and governments need to act, some predictions for 2015 and beyond, investment market and Palantir mini-case-study, market growth, 3 startup tips from founders, some references and additional material
Published on: Mar 3, 2016
Published in: Technology      
Source: www.slideshare.net


Transcripts - NATO Cyber Security Conference: Creating IT-Security Start-Ups

  • 1. Creating IT-Security Start-Ups Benjamin Rohé, Founding Managing Director
  • 2. Sorry for the Layout •  It had to be that way !
  • 3. Market, Predictions and Examples
  • 4. Investors Perspective
  • 5. Cyber Security Startups? Cyber Security Startup!! •  Generations of Cyber Security 1993: Mosaic and the rise of the commercial Internet (FUD* 1.0) •  2000: dot-com bubble burst (double-digit security spend as %IT) - 2002: inflection point (FUD* 1.5) •  2005: consumer Internet distraction & 2008: economic crash •  2011: media focus on all things cyber (FUD* 2.0) •  2013: Snowden and the fragility of the Internet (anti-FUD*?) •  2015: ? •  2020: ??? •  * Acronym for fear, uncertainty and doubt. It is a marketing term that is often used to cast a shadow over a competitor's product when your own is unable to compete. FUD is a technique used by larger companies who have a large market share. The FUD acronym was first freely defined by Gene Amdahl after he left IBM to found his own company, Amdahl Corp, with this statement: "FUD is the fear, uncertainty, and doubt that IBM sales people instill in the minds of potential customers who might be considering Amdahl products."
  • 6. No crystal ball is required to predict that high-profile security breaches will continue to make the news in 2015
  • 7. Two Real Cyber Security Drivers •  Governments and corporations are under attack from cyber hacks (no longer simply a nuisance) •  IT budgets are being freed up for products and services to strengthen digital defenses (convergence of risk)
  • 8. Businesses Under Fire •  Hackers are stealing around $250B/year in IP - NSA Director, Gen. Keith Alexander, calls these attacks "the greatest wealth transfer in history“   "Significant YoY increases in cyber attacks DHS reported a 68% increase in cyber attacks in 2012 at federal agencies, government partners, and against critical infrastructure - Symantec reported attacks on companies rose 42% in 2012 •  U.S. government is increasing spending in Cyber Security (despite cuts elsewhere)
  • 9. Business Under Fire
  • 10. Money Follows Problems •  Driving investment in innovative technologies - $391M in just 16 companies between Jan 2012 and Sep 2013: •  Cyber Security market is in a renaissance: - –  $1B invested in Cyber Security startups in 2012 –  up 5% over 2011 (vs. overall venture funding down 10% YoY) –  2011 Cyber Security funding was up 94% over 2010
  • 11. Security Predictions For 2015 Security predictions from: Blue Coat, Damballa, FireEye, Fortinet, Forrester, Gartner, IDC, ImmuniWeb, Kaspersky Lab, Lancope, McAfee, Neohapsis, Sophos, Symantec, Trend Micro, Varonis Systems, Websense. Image: Charles McLellan/ ZDNet
  • 12. Exit Opportunities for Founders and Investors •  Mergers and Acquisitions (M&A) –  Cisco <- Sourcefire ($2.7B or ~10x annual revenue) –  IBM <- Trusteer ($800M or ~10x annual revenue) •  Initial Public Offerings (IPOs) •  Private Equity etc
  • 13. Intelligence Services: Key Investors1 •  106 Startups Who Received Investment from the C.I.A* Since 1999 In-Q-Tel has been strategically investing in startup companies that are used by the intelligence community. •  Today, these companies have amassed more than $3.2 Billion in venture funding, and employ more than 7,000 people.
  • 14. Case-Study: One Of The Most Prominent Intelligence Financed Startups As of 2013, Palantir was used by at least 12 groups within the US Government including the CIA, DHS, NSA, FBI, the CDC, the Marine Corps, the Air Force, Special Operations Command, West Point, the Joint IED-defeat organization and Allies, the Recovery Accountability and Transparency Board and the National Center for Missing and Exploited Children.
  • 15. https://www.youtube.com/watch?v=VJFk8oGTEs4
  • 16. Palantir Facts •  Founded in 2004 by Peter Thiel, Joe Lonsdale, Alex Karp, Stephen Cohen, Nathan Gettings; 1.500+ employees; •  Palantir Gotham is used by counter-terrorism analysts at offices in the United States Intelligence Community and United States Department of Defense, fraud investigators at the Recovery Accountability and Transparency Board, and cyber analysts at Information Warfare Monitor. Palantir Metropolis is used by hedge funds, banks, and financial services firms. •  CEO Alex Karp announced in 2013 that the company would not be pursuing an IPO, as going public would make “running a company like ours very difficult.” •  As of early 2014 the company was valued at $9 billion, according to Forbes, with the magazine further explaining that the valuation made Palantir "among Silicon Valley’s most valuable private technology companies.
  • 17. Global Cyber Security Spending to Reach $76.9 Billion in 2015: Gartner •  According to the IT research and advisory firm, global IT security spending reached $71.1 billion in 2014 year, an increase of 7.9% compared to 2013. 2015, spending will grow even more, reaching $76.9 billion (+8,2%) •  By 2015, approximately 10% of the security controls deployed by organizations will be cloud-based, particularly when it comes to small and midsize businesses.
  • 18. J.P. Morgan CEO: Cyber-Security Spending To Double! •  J.P. Morgan Chase & Co. Chairman and Chief Executive James Dimon said the bank would double spending on cyber security over the next five years.
  • 19. 3 Solid Tips From Founders Of a Security Startup2 •  To scale a startup too early or grow too quickly is not necessarily a good thing, especially for enterprise startups. Things will go wrong, bugs will be revealed, and the unexpected will always surprise you at the most inconvenient of times. Being slow and steady at first allows time to optimise the advertising funnel and learn how to push customers down the funnel effectively with a small budget. Don’t ramp up the model until the conversion is consistently great. •  When attending business meetups and events, seek to build business relationships, and genuinely help people to ‘pay it forward’. Many startup founders meet to sell their idea, or to pitch. No one will be interested in buying from you or use your product if you directly sell to them when meeting the first time. •  At the end of the day, a startup is a business, so think of revenue early and have a solid business model, not just to build something cool or change the world. Don’t run out of cash, because the longer the business can survive, the greater its chance of succeeding and ultimately changing the world.
  • 20. Reaching Out to the Growing Community (Examples) https://angel.co/cyber-security
  • 21. 2014 surveys and annual reports Publisher Title Appriver Global Security Report: End-of-year report 2014 Cisco 2015 Annual Security Report CyberEdge Group 2014 Cyberthreat Defense Report Damballa/Ponemon The Cost of Malware Containment EY Global Information Security Survey 2014: Get Ahead of Cybercrime Forrester Understand the State of Network Security: 2014 to 2015 HP/Ponemon 2014 Global Report on the Cost of Cyber Crime Lumension/Ponemon State of the Endpoint Report 2015 Radware Global Application and Security Report 2014 SafeNet/Ponemon The Challenges of Cloud Information Governance: A Global Data Security Study Symantec 2014 Internet Security Report Tripwire/Atomic Enterprise of Things http://www.zdnet.com/article/cybersecurity-in-2015-what-to-expect/
  • 22. Case Study: Steganos
  • 23. 4 Key Products …
  • 24. .. For a Post-Snowden World
  • 25. Growing a Cyber Security Company with Success •  B2C: –  PR: own the subject (steganos: snowden/ data privacy) –  Affiliate Marketing (blogs, (software)publisher, software review magazines) •  B2B: Partner distribution & bundles; bottom-up approach (used at the bottom of the organization, becomes “standard” within the entire organization)
  • 26. Affiliate Marketing (B2C) http://www.startupnation.com/articles/affiliate-marketing-101-understanding-the-basics/
  • 27. Closing the Loop •  Expertise Counts –  Domain expertise is key (for investors and buyers) –  Does the team really know its vertical market?
  • 28. Closing the Loop •  Government Cyberwarfare & CIP –  More than 80 companies work with the NSA on cyberwarfare and surveillance (Der Spiegel) –  Claims that U.S. National Security Agency is funding “digital Blackwater” and “cyber Raytheon”
  • 29. Final Remarks •  Security still a reflex reaction to an attack •  IT infrastructure security still a one-time, ad hoc effort •  Security as a broad collection of technologies •  Cyber Security never gets solved Like an antibiotic-resistant bacteria: attackers adapt to defenses and render them obsolete (David Cowen, Partner at Bessemer Ventures)
  • 30. Contact Information Benjamin Rohé br@gtec.berlin +491739751021 www.gtec.berlin
  • 31. References 1.  https://mattermark.com/106-startups-who-received-investment-from-the-c-i-a-most- frequent-in-q-tel-co-investors/ 2.  http://fromlittlethings.co/2013/10/09/three-solid-tips-from-founders-of-security-startup- authopay/

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