Week 10 of the Big50-2017 features 4 cybersecurity startups that understand risk. These startups could have easily fit into one of our previous cybersecurity weeks, but we’re grouping them here to highlight how each uniquely handles risk.
To be fair, every cybersecurity startup we’ve covered thus far deals with risk as a core competency. Without risk, there’s no need for souped-up, layered security after all. Yet, how you approach and mitigate risks often creates path dependencies that can either help or hinder you as the risk/threat landscape evolves.
Complicating matters, for startups, risk is a double-edged sword. By their very nature (long-shot newcomers taking on entrenched, deep-pocketed incumbents), startups self-select for risk. Their founders, early execs, first wave of employees, and financial backers have all decided to risk their time and/or money on a coin-flip bet. . . or worse.
Startups are risky by nature
Silicon Valley conventional wisdom has it that 9 out of 10 startups fail. That’s a horrible bet, but fortunately, the data disagrees with that shaky wisdom. According to Cambridge Associates, the real rate of failure for venture-backed startups is lower (but still high.)
Cambridge Associates tracked 27,259 startups between 1990 and 2010. The Boston-based global investment firm found that the actual failure rate, which they defined as delivering a 1X or less return to investors – hit a high of 79% during the dotcom bust, but hasn’t been higher than 60% since.
Whatever the real failure rate, a startup’s risk bias, if you will, creates both opportunities and obstacles.
The first obstacle every soon-to-be successful startup must clear is often then most challenging: convincing paying customers that the startup is NOT a risk.
That’s a tricky mountain S-curve to navigate, and many careen over the edge. In fact, during the Big50 assessment process, when we ask startups about their major challenges, the top concern is always about figuring out how to get customers to overcome the status quo and their fear of change to take the plunge with a risky startup.
Mobile Risks in the Spotlight First
The security startups we’re covering this week come at risk head-on, believing that a clear-eyed, no-B.S. understanding about the underlying and ever-evolving nature of security risks should be table stakes for any cybersecurity company (any company at all?). We agree.
We kick of the week with a startup focusing on mobile risks. A fragmented mobile security and authentication landscape isn’t keeping up with the growing risks posed by m-commerce, mobile payments, and in-app purchases.
On Tuesday, we’ll feature a startup that helps organizations vet third-party contractors and partners. If you think you can ignore third-party risks, remember, it was contractor Edward Snowden who was responsible for the theft of NSA secrets that helped Russia target the 2016 U.S. election.
A startup that provides enterprises with a “hacker’s view of your attack surface and then prioritizes vulnerabilities based on risk” is in the spotlight on Wednesday, while Thursday’s featured startup has set its sights on email security risks.
And after that, Startup50 will be off to celebrate the holidays. We return on January 2 with a mobile startup targeting the home healthcare sector.
Enjoy the holidays!
How these startups made it into the Big50-2017
To recap, the Big50-2017 competition started with more than 160 startups.
Through three rounds of challenges, the Startup50 team whittled that down to the 55 startups we are featuring in the Big50-2017. (Yep, there are 55 startups in the Big50. You know, like giving a 110%.)
The first obstacle Big50 startups had to pass was the fundamentals test. Have they raised sufficient funding, attracted a solid team, developed a viable business idea that tackles a real-world problem? Do they have on-the-record customers, are they targeting a viable market niche, and have they launched an MVP that’s moved the needle?
Next, if the fundamentals were in order, startups had to fight their way through the Online Voting and Social Media challenge.
Those still standing, then had to face the Content Challenge. Startups pitched the Startup50 team their best story ideas for a forthcoming podcast.
The 55 startups featured in the Big50-2017 startups excelled in each of those three challenges.
Come back in fifteen minutes or so, and you’ll see the first of our risk management startups, one that tackles mobile authentication challenges. Stay tuned. . .
