How entrepreneurs can leverage the coming golden age of cybersecurity
As the markets continue to fluctuate, budget cuts and layoffs now extend across the tech industry, with cybersecurity no exception from tightening its belt and assessing its priorities. Investors are proceeding with caution and waiting to see a correction in valuations, while cybersecurity startups are examining their runway and long-term viability.
The growing number and sophistication of cyberattacks, however, reinforce the need for heightened security awareness and innovation. Standing on the front lines of these challenges are the chief information security officers, security practitioners and vendors working tirelessly to revolutionize the industry. I recently had the opportunity to speak with five leading investors and enterprise security executives that shed an optimistic light on current challenges, viewing them as a necessary impetus for innovation.
Will history repeat itself?
The stark dissonance between the highs of 2021 and what seems to be a cooled-off 2022 has some security professionals and chief executive concerned that this downturn will become the new reality, for the long term. However, industry veterans see things differently. Todd Weber, operating partner and chief technology officer at Ten Eleven Ventures, is confident in the market’s resilience.
“Our paradigm regarding 2022’s downturns is skewed due to 2021’s bonanza,” Weber says. “Viewed statistically over the past 10 or 15 years, we see a healthy environment and industry that I am really not concerned for.
Richard Seewald, founder and managing partner of Evolution Equity Partners, adds that “post 9/11, we saw cybersecurity funding decline sharply — as it does at the apex of every global crisis. The returns that were generated in the wake of that crisis, however, as well as those post-2008 and post-COVID, were the most attractive returns in cybersecurity private equity year on year.’”
The mix of bountiful opportunities and a limited number of top-of-the-line vendors in the early 2000s brought about the bronze age of cybersecurity, as Seewald called it, with the silver age dawning in the post-2008 crisis as cloud computing began its rapid rise and helped establish the tech behemoths that are today iconic and publicly owned.
“Going forward in this environment and over the next 10 years, we’ll see the golden age of private investing in cybersecurity,” he says. “With an increasing attack surface and the ability to address multiple vectors besides cybersecurity, including blockchain, quantum computing and others, entrepreneurs will be presented with significant opportunities — as will investors.”