The cybersecurity industry is a large, highly competitive market, full of large companies that are well-established and have developed credibility and trust among clients. Thus, it can be incredibly tough for startups to compete with these tech giants, even if they are able to create successful programmes and solutions.
Indeed, there are plenty of challenges facing cybersecurity startups that can make it difficult to succeed in the industry, especially in the long term. But, that doesn’t mean it’s not possible.
All companies have to start somewhere, it’s all about being persistent, realistic and patient in working towards achieving your goals. Part of this is striking a balance between focusing on your own endeavours and setting your company apart from your competition while still maintaining awareness of exactly what’s going on around you.
Challenges Involved In Launching a Cybersecurity Company
Working and succeeding in the cybersecurity industry can be incredibly challenging, for both well-established companies as well as for entrepreneurs building startups.
- Competitive and Saturated Market: The cybersecurity industry is crowded, full of both new and well-established companies, all of whom are fighting for market share. Thus, it’s incredibly difficult for startups to stand out among the crowd, especially when there are so many large firms that have solid reputations and can offer comprehensive solutions.
- Need For Constant Innovation: Technology in cybersecurity is constantly changing and evolving, a lot of which is due to cybercriminals coming up with new ways to infiltrate companies’ systems and private data. Thus, cybersecurity firms need to be up to the challenge of constantly innovating, and coming up with solutions to new problems. Of course, this also means that startups must always be up to date with changes and new trends in the industry which can be difficult to get right.
- Scaling Solutions: In order to be successful in the long run, cybersecurity firms need to have realistic plans for scalability, and this needs to align with the firm’s cybersecurity technology.
- Managing Regulatory Compliance: Since cybersecurity companies deal with sensitive data, there are plenty of laws and regulations that need to be followed. Of course, these rules differ from one location to the next, but regardless of where the company is based, it’s essential that it’s aware of these regulations and complying with them too.
- Building Credibility and Trust: One of the most difficult things to get right for any and all startups, but especially in cybersecurity, is building credibility and trust within the industry. This is especially challenging when surrounded by large companies that already have a solid reputation. The only way to develop trust is by proving that the company and its solutions are solid.
- Financial Constraints: Funding is difficult for all startups, but it’s especially challenging in the cybersecurity space. Solutions require a great deal of investment in research and development in order to create cutting-edge technology. It can be incredibly tough to secure enough funding in the early stages as investors tend to be cautious about the viability of startups’ products in such a competitive landscape. Furthermore, cybersecurity also tends to have long sales cycles which can make cash flow difficult.
Indeed, there’s no getting around the fact that starting a cybersecurity company is a challenging endeavour. However, having said that, there are several things that can be done to help make the process run smoothly, giving your startup the best possible chance for success.
Our Experts
Experts and veterans in the cybersecurity industry advise entrepreneurs to maintain focus on what they’re trying to achieve – always striving towards coming up with solutions to problems they’ve identified. More than that, it’s all about standing out in a competitive market, so experts highlight the importance of patience and persistence.
- Ev Kontsevoy: CEO at Teleport
- Anthony Young: CEO and Founder at Bridewell
- Sam Gutmann: CEO and Founder at Own Company
- Anders Reeves: CEO at CovertSwarm
- Peter Burnap: Founder at Wales Cyber Innovation Hub
Ev Kontsevoy, CEO, Teleport
“Complexity is awful. Just don’t ignore it once it starts creeping in. That’s something that can easily bite you if you ignore it for too long. No one ever intentionally makes obviously bad decisions. Every decision always seems rational in the moment.
But if the cybersecurity product you sell starts becoming more complicated, and the way you sell it gets more complicated — for example, you start selling multiple products, especially early on — then you might be splitting your focus too much. What is the problem in the cybersecurity industry that you’re trying to solve?
As a startup, you need to be hyper-focused on answering that question. Also, you need to mimic how your customers behave. The fastest way for your product to be adopted is for your entire organization to be like a mirror to how your customers act.”
Anthony Young, CEO and Founder, Bridewell
“While the cybersecurity market is growing, it’s also highly competitive, with many established players. To succeed, you must differentiate yourself by focusing on your strengths – whether that’s professional services, identity, managed security services, incident response, forensics, pen testing, or data privacy – and clearly communicate this to prospects.
A common mistake is underestimating the importance of sales and marketing. Many cybersecurity firms are started by tech specialists who focus too much on delivering one project, neglecting the need to scale. This results in them finishing one project and spending the next six months looking for the next one. To grow, it’s crucial to think beyond the current project and invest in building a pipeline of future opportunities.
Trust and reputation are vital but take time to establish. Companies won’t hand over their cybersecurity unless you can demonstrate a track record of success, which could take years. Be patient, focus on credibility, and always work to build lasting client relationships.”
Sam Gutmann, CEO and Founder, Own Company
“Building a company is as much about focus as it is about adaptability. Startups succeed when they remain committed to their core mission, but they thrive when they evolve with the market. When we launched Own (previously OwnBackup), we zeroed in on providing the best backup and recovery for Salesforce, and that sharp focus earned customer trust and fueled our growth.
Then, we went beyond recovery to develop a full SaaS data protection solution and today, Own customers can fully harness their unique data to unlock historical insights and shape predictive outcomes. Own is the clear choice for SaaS data protection and activation, and that success comes from adapting to meet the evolving needs of customers.
The key is staying open to new ideas, shifting gears when necessary, and continuously asking, ‘What’s best for our customers?’ That’s how you build a business that lasts.”
Anders Reeves, CEO, CovertSwarm
“The best advice I received before founding my own company – CovertSwarm – was to be a painkiller for an issue I truly understood. Having previously worked as a technology and security leader for some of the world’s largest brands, I knew the pain I wanted my own company to solve for others was that which came from a cyber breach.
This helped me to design and solve the question of what CovertSwarm’s value proposition needed to be; however, a ‘value prop’ is nothing without the right people to deliver it. That’s where our ‘Employee Value Proposition’ came into play.
By focusing the same time, effort and resources on developing our EVP as we did our VP (a full year before trading), we created a neat ‘fit’ between solving the pain points we identified that ethical hackers were feeling through their employment in legacy cyber vendors as well as those of our future clients – all through the shaping of our service offering and unique employee benefits package. CovertSwarm was born. A little under 4 years later we are 65 people strong, have supported hundreds of brands, and enjoy an eNPS rating of 50+, and an NPS of 80+.”
Peter Burnap, Founder, Wales Cyber Innovation Hub
“Building a successful start-up, particularly in cybersecurity, hinges on assembling a well-rounded team with both technical expertise and commercial acumen. Investors look beyond a great idea – they want to see a complete package, including software skills, customer development, and innovative thinking.
Your solution must address a real market need, solving problems that people are willing to pay for. Speed and traction are also critical; engaging potential customers early to validate your business case, pricing model, and value proposition is vital.
Access to mentors, commercial advisors, and UI design experts can further boost your chances of success in a fast-moving, competitive market. Without these components, even the best ideas can struggle to take off.”
