Cybersecurity Private Equity

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Index at 100 on January 1, 2020

6 Things Cybersecurity Start-Ups Can Learn From the Country’s Largest Firms

It should be no surprise that significant opportunity exists in the cybersecurity industry. Threats are everywhere, and software that can reduce the risk for businesses could generate substantial sales numbers if it addresses their concerns uniquely.

Examining firms already succeeding in the industry can provide a blueprint for start-ups. These firms have done something right, so looking at how they’ve grown or reached unicorn status offers clues on the route your company could take.

The biggest cybersecurity companies in the United States didn’t get there by accident. This guide will explain what start-ups can learn from some of the industry’s largest firms. 

What Are the Biggest Cybersecurity Companies?

There are several ways to analyze the top U.S. cybersecurity companies. You can begin by looking at the large multinationals with significant tech industry footprints like Microsoft, IBM, Cisco, and Oracle because they also offer cybersecurity products. It’s likely impossible for a start-up to duplicate these firms’ success, though, so looking at the growth some smaller firms have experienced is a better starting point.

Juniper Networks, Synopsys, and CyberArk are established, publicly traded tech firms with industry-leading cybersecurity innovations. Wiz, Lacework, Snyk, and Illumio are start-ups valued north of $1 billion and growing steadily within the cybersecurity industry. The number of sizable cybersecurity firms is regularly expanding, so looking at how these firms reached the next level is vital for start-ups.

Why Cybersecurity Is Critical

Developing your strategy as a cybersecurity start-up often begins with the breakdown of why the industry is crucial to businesses. Understanding where your start-up fits in could assist as you develop and market a product. Reasons the sector is vital include the following:

Every Company Needs It

There’s a cyber attack every 39 seconds in the United States, and 43% of all attacks target small businesses. Every attack has the potential to cost the victim a significant amount of money, and we’re now at the point where there’s no excuse for not having a cybersecurity system in place. The result is greater demand for specific products catering to a company’s unique needs.

Advanced Technology Creates Vulnerabilities

Technological advancements like 5G, the Internet of Things, cloud storage, and the remote workforce are great for employees and consumers, but they open new vulnerabilities that companies must address. Greater use of technology means more connected devices for hackers to target, creating a more significant demand for solutions. The goal is to create a secure system that doesn’t need constant human intervention to protect data and infrastructure.

The Damage Is Significant

Cybercrime could cost the global economy $10.5 trillion by 2025, representing the most significant transfer of economic wealth in history. This number could eclipse the damage caused by natural disasters annually and would make these attacks more profitable than the global drug trade. Criminals have many reasons to target businesses, making a cybersecurity strategy essential.

Identifying why your start-up could be critical to the security of other firms helps position yourself in the market. You can then begin examining how other companies gained traction to push yourself in the right direction.

Six Ways Start-Ups Can Emulate the Top U.S. Cybersecurity Companies

The country’s most successful cybersecurity companies provide value to their clients. Simply having a product isn’t enough, though, because firms must be aware of your existence. Six steps you can take to separate yourself from the pack like the biggest cybersecurity companies did in the past include the following:

1. Identify a Need

Perhaps the most critical thing a cybersecurity start-up can do is to determine an area where the industry is lacking. Identifying this need gives you an advantage when developing a product because you can be certain companies will be intrigued by it once you go to market.

2. Develop a Specialized Product

The product you develop should solve a problem within the cybersecurity space. The top U.S. cybersecurity companies know what their customers seek and develop products based on what these users require. The product doesn’t have to solve every cybersecurity issue out there, as focusing on a particular aspect is enough. 

3. Create an Approach

The approach you use could determine the product’s success. Snyk is a company with an $8.5 billion valuation that offers a specialized tool developers can use to scan and fix code, improving security in the process. They aren’t reinventing the wheel but rather appealing to development teams by offering a tool to make their lives easier.

4. Market the Product

Getting the word out about your product can be challenging because the space evolves rapidly. Start-ups won’t have the name-recognition advantage more established firms use to get products out there, but working with industry-savvy investors can help. Wiz is an excellent example because it was founded in 2020 and valued at $6 billion by October 2021 due to its strategy of uncovering cloud vulnerabilities, presenting its findings at conferences, developing solutions, and pursuing investors.

5. Expand Your Offerings

Developing a successful product is only part of the battle because you’ll want to expand by offering new products in the future. Arctic Wolf, for example, started small and now has a full range of cyber security solutions, including a platform that integrates with all of them. 

6. Secure Funding

Money is a crucial component as a start-up gains traction. You’ll need to look for investors with industry knowledge willing to back start-ups like yours to jump-start your growth.

You must develop a unique path for your company as you look to emulate this success, but examining how these other firms reached their goals can assist in the decision-making process. It also shows that rapid success is possible if everything falls into place.

Bringing Start-Ups and Investors Together

One of the most challenging aspects of growing a company is coming up with the money you need to scale. You’ll need investors, so figuring out where to find them is a significant piece of the puzzle once you have a product. 

Option3 brings investors together with cybersecurity start-ups. We aim to help these start-ups become the industry’s next big thing, so we assist them as they secure the funding they need. Contact Option3 for more information on succeeding as a cybersecurity start-up.


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