Key Takeaways:
In May 2022, the CEO of TAG Cyber LLC Ed Amoroso released findings from his team, which conducted in excess of 2,000 interviews with cybersecurity startups spanning the last few years, notating three key indicators of cybersecurity startup success.
We want to provide our own commentary on these findings based on our experiences in this space to give cybersecurity startups a guide to success.
As a cybersecurity accelerator, we believe that foundation, marketing, and passion are the key indicators of cybersecurity startup success.
What’s New?
In May 2022, the CEO of TAG Cyber LLC Ed Amoroso released findings from his team, which conducted in excess of 2,000 interviews with cybersecurity startups spanning the last few years. In this report, he detailed three key indicators of cybersecurity startup success he and his team noticed during their deep dive research. As a cybersecurity accelerator intimately involved with startups in cybersecurity and other related technologies, we want to provide our own commentary on these findings based on our experiences in this space to give cybersecurity startups a guide to success.
#1: Foundation
According to Amoroso, the first key indicator of cybersecurity startup success is their belief system (1). If you have ever seen startups pitch their ideas to investors, you know that the first part of their presentation often starts with ‘why.’ This ‘why’ is why they started their company and decided to invest their lives to solving the issue that they are through their startup. It may be a personal anecdote, a common issue, or even a call to action. This part of the pitch sets the stage for the rest of their presentation, because ineffective ‘whys’ often denote ineffective startups.
Research shows that startups often miss the mark. Lack of market demand for their company tops the list as a cause of startup failure, with 42% of failed startups ending due to this factor alone (2). However, instead of a belief system as an indicator of cybersecurity startup success, we believe it is your foundation, your own company’s 'why.' Piled up coins don’t always make a flat surface, but sometimes a mountain that startups can slide right down. Yet, a heartfelt story or a vulnerability you faced that you felt the need to change so nobody else had to face it, that is a foundation of steel and titanium that is unbreakable. Instead of trying to make money, the best founders find a real need or problem and their startup is the solution.
#2: Marketing
According to Amoroso, the second key indicator of cybersecurity startup success is their attention to design (1). This makes sense. As individuals who participate in the global business ecosystem, we rarely find ourselves thinking, “that company’s marketing is so cluttered and disorganized, I can’t help but want their product” when watching a commercial. This puts the salience of marketing for startups in perspective. Even if the technology and supporting statistics showing your company’s promise are all there, if you have a sloppy logo, disorganized website, or lack of customer outreach, you have no customer base and no startup. In fact, some of the key reasons behind startup failure include poor marketing efforts, with this and other user-facing imaging accounting for around 10% or more of startup failures (2).
We tend to find that design and marketing is simply the icing on the cake. The real layers that make up an effective marketing campaign and make cybersecurity success soar is a story. Looking at some of the most profitable brands, we can see this style of marketing emerge - Dove’s Real Beauty Campaign, Victoria Secret’s story of Victoria marketing towards their beginning, and Snapple’s advertising campaign featuring Wendy Kaufman (a shipping worker-turned-Snapple spokesperson whose gregarious and boisterous personality that made Snapple a unique and luxury brand that appealed to the everyday American consumer). While some of these companies remained strong and others had a boom-and-bust cycle of success, their peak remained the same - it consisted of a well-crafted story that could be extended to build the brand.
While cybersecurity is not the same as a retail brand, a well-crafted story can build on the ‘why’ behind your company, making it trustworthy and fill a need all at the same time. Knowing your product and explaining the analytics and statistics in an easy-to-understand manner will make your product accessible to companies and users alike. Since cybersecurity is a more complex space, explaining all the technical aspects in great detail depends on the intention of your brand. Once you craft your story, your marketing must match to make a startup greatly successful.
#3: Passion
According to Amoroso, the third key indicator of cybersecurity startup success is domain knowledge (1). The startup space is not something to be taken lightly. The best startups are those that founders devote their entire lives to. So, it is easy to tell which founders are serial entrepreneurs or inexperienced founders with dreams of the monetary gain that can come from the space. It all comes down to one question - “Why do you love what you do?” Those truly passionate about their startup will give you the answer you hope all great companies are founded on - the story of how they fell in love with the problem they are working to solve and how they would gladly do their services for free because they love what they do. Passion is the driving force behind the startup scene and why a large majority of people in the startup space are in this industry. It is a field of passion, and the most successful startups and founders reflect as such.
Conclusion:
We want to be part of helping startups in the cybersecurity space be successful and help with their pitfalls and challenges. While we can’t give founders their passion and drive, we can certainly help them hone their skills and drive towards making their startup successful. That is why we have a devoted accelerator program for early stage startup companies who are developing cyber related products and services and are ready to take their business to the next level through expanding their networks, learning key business approaches and seeking investment. We encourage those interested in being part of the cybersecurity and technological startup community to apply here to be part of the cyber change that MACH37 represents. We hope this post gives you some guidance into the cybersecurity sector of the startup ecosystem and what differentiates any cybersecurity startup from the next great cybersecurity startup!
Who Are We?
VentureScope works with creative entrepreneurs, venture capital investors, and large private and public sector organizations around the world that are trying to solve interesting problems. Our team has extensive and unique experience launching new business ventures, investing in promising startups, running startup accelerators, and providing strategic innovation and general management consulting services to large private and public sector organizations. We’re on the pulse of emerging and over-the-horizon technology and are tracking their growth and development against important industry problems to inform our deal flow and give you exceptional advice. MACH37 is our start-up accelerator designed to facilitate the creation of the next generation of cyber product companies.
References:
1 - https://www.darkreading.com/edge-articles/3-predictors-of-cybersecurity-startup-success
2 - https://www.embroker.com/blog/startup-statistics/#:~:text=About%2090%25%20of%20startups%20fail.&text=10%25%20of%20startups%20fail%20within%20the%20first%20year.&text=Across%20all%20industries%2C%20startup%20failure,be%20close%20to%20the%20same.&text=Failure%20is%20most%20common%20for,70%25%20falling%20into%20this%20category.
3 - https://www.istockphoto.com/photo/binary-code-gm122204403-11474668 (Image)