Kickstarting a Cybersecurity Startup
It is a fact that the way businesses conduct themselves has changed immensely over the past two decades; these industries previously needed more digital infrastructure to meet 21st-century requirements. The digital age offers companies and business owners access to new opportunities and innovations within seconds. This is something that previous generations could have only dreamed about having in their lives. After all, it gives them a more significant opportunity to succeed, profit, and achieve greater ambitions. However, chances of this magnitude do not come for free as they have substantial costs, mainly cybersecurity threats. Despite this, cybersecurity is still viewed as a luxury in many places worldwide. Cybersecurity businesses in these places always need help to present a convincing case that cybersecurity is necessary.
Growing Cybersecurity Threat Landscape
The days of analog dominance are quickly ending and are rapidly being replaced by digital codes that immediately revolutionize numerous industries' strategies and cultures. It's important to note that these digital codes that cause all this significant change have created new vulnerabilities that make companies and businesses more susceptible to being hacked by unknown cyber assailants.
According to a PwC 2018 Global State of Information Security survey report, 44% of 9,500 surveyed executives know the growing concern about cyber threats. However, 44% said they currently need an overall information security strategy. Besides, a 2017 Online Trust Alliance (OTA) report estimates that over 93% of security breaches can be easily avoidable by applying essential IT industry best practices widely adopted by the Intellection Group.
This is why organizations of all sizes need to know how necessary critical safeguards must achieve at least a first line of defense. The OTA also considered 2017 as another "worst year ever" in the escalation of personal data breaches and cyber incidents such as data theft, ransomware takeovers, business email compromise (BEC) for financial or credential theft, and the infiltration of the Internet of Things (IoT) connected devices.
Allocating a portion of an organizational budget to cybersecurity ensures the organization is better equipped for cyber attacks. It provides business survival as 60% of small to medium-sized businesses (SMBs) that are attacked go out of business within a year because they can't afford the costs of damage control. More alarmingly, small to medium-sized companies are likely to fall prey to cybercriminals, as they are their favorite and easier-to-reach targets. As a result, ill-prepared organizations tend to find themselves overwhelmed and in a challenging hole to get out of.
The global cybersecurity market is booming in many places. Cybersecurity-related spending is on track to surpass $133 billion in 2022, and the market has grown more than 30x in 13 years. Some industry watchers have claimed that the cybersecurity market is a bubble about to burst. To understand the debate, looking beyond traditional supply and demand metrics is essential. On the one hand, the demand for cybersecurity solutions is vast. Organizations are increasingly investing in cybersecurity, as evidenced by a recent report by Gartner Group showing security spending is outpacing IT spending.
Security departments are expanding in size and budget, and at the helm, security decision-makers are gaining more respect than ever before. With ever-dynamic cybersecurity risks and regulations, it is clear to most C-suite leaders that there's more to be protected and more on the line. Security is taking on a new shape within organizations. Generally, security buyers are investing in various categories to defend their organizations.
Moreover, security is often integrated into new business initiatives and used as a competitive advantage. The resounding sentiment across the different security approaches is exact — no one wants to be breached. However, this preparation for a cyber doomsday might be disproportionate to how breaches affect the bottom line.
Well-publicized security incidents in recent years resulted in a little long-term effect on the bottom line. Equifax regained its market cap less than two years following the "incident of the century," and Sony, a $70 billion-plus giant, incurred "catastrophic" damages of less than $100 million after proprietary, sensitive, and even embarrassing data was stolen.
With the overvaluation of startups, market saturation, and the seemingly less-than-catastrophic impact of breaches, it's no wonder some are worried about the cybersecurity industry. Unique factors make cybersecurity a challenging market. Companies deal with their worst-case breach scenarios without enduring severe financial losses that were once believed to devastate companies. So, are security departments just crying wolf? If so, could the demand for solutions decrease?
To highlight a few: Government and defense investing are anchors that continually fuel growth. For example, the U.S. 2019 President's Budget includes $15 billion for cybersecurity-related activities, and France has committed to 4,000 cyber headcounts by 2025. This type of demand is going to be around for a while.
New categories emerge in spaces like Zero Trust and IoT security to address growing threats in scope and sophistication. The future-forward mindset in the industry is so healthy that sci-fi writers are employed to predict cyber threat scenarios and inject innovation into cyber defense. Besides, increased compliance and regulatory requirements such as the EU's General Data Protection Regulation (GDPR) call for companies' action and propel awareness and sales even further. On top of that, the industry is dynamic and keeps reinventing itself and help kickstarting a cybersecurity startup.
While these factors contribute to the industry's strength, they are not the primary elements that will prevent the cybersecurity bubble from bursting. The answer does not lie in where cybersecurity is today but in where it is going next. In the foreseeable future, cybersecurity will face unique threats that will fuel its growth even further.
The security market is highly fragmented; some companies are overvalued, and only some new security tools will succeed. But as our world becomes more software-driven, cybercrime will inevitably intensify, leading to new matters entering the security bubble. This will propel security into a significantly larger market at an even greater rate, visible to investors, leadership teams, and company boards. Instead of bursting, the cybersecurity market will only keep developing and growing.