FREEDOM AND SAFETY
As cybersecurity becomes more of an imperative for individuals and organizations, several regions in the US are investing money and efforts in security innovation.
Silicon Valley may be the most famous hotspot for tech innovation in the country, but it's far from the only place driving cybersecurity advancement. Areas such as the Washington, DC region and the Boston metro area are home to a growing number of security startups and incubators.
There are several factors that contribute to making an area a hotbed for security innovation, explains Rick Gordon, managing partner at cybersecurity startup accelerator Mach37. Some critical elements include availability of seed capital and educational institutions generating new talent.
"Cyber is an area where innovation is built and based on extent of experience and knowledge," says Bob Ackerman, founder of cybersecurity venture capital firm Allegis Capital. The technology is deep, and the ability to develop and apply it requires a lot of experience.
The problem is, the industry is struggling with a shortage of skilled security engineers, he continues. Regions are trying to fill the gap by building programs to graduate more skilled graduates and using technology to increase the productivity of existing engineers.
Many colleges and universities have begun to respond to the shortage in engineering talent by expanding their curricula to include cybersecurity. UC Berkeley, UC Santa Barbara, Carnegie Mellon, MIT, and Georgia Tech are among institutions fueling tech innovation with trained graduates.
Even in regions known for technological innovation, it can be difficult for security startups to succeed because they need more than tech talent to achieve growth. Oftentimes, tech talent moves to areas where business expertise and a strong venture capital ecosystem will support innovation.
For this reason, security businesses have begun to emerge in regions where they have access to capital, skills, and opportunities needed to grow. These regions are primarily located on the east and west coasts of the US, but some have begun to pop up in the south and the middle of the country.
"Cybersecurity is an area driven by nonstop innovation," explains Ackerman. "The half-life of cybersecurity is one of the shortest in IT. We focus on these regions because in cybersecurity, if you're going to compete, you have to have a solid foundation to start. You can't pick it up as you go."
Here, we spotlight some regions across the US driving innovation in the cybersecurity space through factors like education, accelerators, and other support for entrepreneurs and startups looking to grow.
Experts agree the Washington, DC metro area is among the hottest regions for cybersecurity innovation due to the strong presence of federal agencies and increase in security spend.
"This area is home to one of the most densely concentrated cyber workforces in the entire country," says Tenable Network Security CTO Steve Vintz. Part of the reason is because DC's roots are in security. Bodies such as the federal government and NSA contribute to a security-focused culture driving opportunity in the area.
A wealth of talent is driving innovation in the DC region, says Sean Cunningham, managing director at Trident Capital Cybersecurity. This area may have a history of security, but many people leave their government careers to join startups and seed companies, where job opportunities are plentiful.
"The availability of talent and cost of doing business in DC is phenomenally positive," Cunningham continues. "Savvy people coming out of government with incredible experience; that adds instant juice to a startup." This talent can be harnessed and applied to endpoint, cloud, network, IoT; all areas of security ripe for growth, adds Gordon.
The security culture is further strengthened by a plethora of educational institutions, including the University of Maryland, graduating trained cyber talent. Incubators and accelerators in the area such as Mach37 are creating opportunity for people who want to switch their careers into the cybersecurity space. Ackerman describes Maryland's DataTribe as a "startup studio" created to work with technical entrepreneurs and build companies focused on cybersecurity, big data, and analytics. DataTribe brings the added skills many companies need to grow.
"There may be reservoirs of tech talent, but not as much commercial talent or business experience," he says. "Startups don't just emerge; they need commercial DNA to go with it."
It's important to note quality of life also plays a factor in how DC will grow as a security hotspot. An educated workforce, history of innovation, economic opportunity, and job growth make DC a desirable area to live, attracting a larger pool of talent, says Vintz.
The region has been home to several security startups, including NetWitness (acquired by EMC), SourceFire (acquired by Cisco), Mandiant (acquired by FireEye), IronNet Cybersecurity, LookingGlass Cyber Solutions, and CrowdStrike.
Going forward, Gordon anticipates the "center of mass" for cybersecurity innovation will be in DC as more people learn how to build companies, outside investors continue to fund them, and professionals continue to enter the private sector.
As you might expect, experts cite Silicon Valley as a prime region for cybersecurity innovation. There's a lot of capital pouring into the cyber market there, fueling a strong and competitive market for startups. Tenable's Vintz says he foresees venture capital and private equity will continue to increase in the area, driving growth.
Silicon Valley is among the popular areas for companies that are founded elsewhere across the US and foreign countries, but relocate to drive growth, explains Cunningham. Businesses with their roots in Israel, London, and Ireland come to the US because there isn't as much venture capital investment abroad.
"If you're going to build a company, you need to go where capital is developed for early stage companies," he explains. Many tech entrepreneurs relocate to Silicon Valley for its strong startup ecosystem and abundance of tech expertise, including security talent. One example is 41Q, which relocated from Spain to Silicon Valley. Appthority is another startup that grew in this region. Vintz says in the long term, he envisions the company will have a presence in Silicon Valley because of the area's strong competition and plentiful talent.
However, a problem with the Silicon Valley region is its high cost of living, which serves as a barrier to entry for companies transferring from areas such as Baltimore or San Antonio.
The vibrant venture capital community in Boston is largely driving cybersecurity innovation, says Mach37's Gordon. Its long history of venture investment is appealing to businesses because they don't have to attract funding opportunities; they're already there.
Boston is different from other tech hotbeds because there is a greater presence of people with less technical skills. There is tech talent, but there are more professionals with experience in building product companies and enterprise software companies. These two factors are helping drive the security startup scene.
A combination of educational institutions and major tech companies is driving security innovation in the Seattle area.
Much of the talent supporting startup growth is coming from tech giants such as Microsoft, Amazon, and Google, all of which have a presence in the Seattle area. Many employees exiting these companies are matching with big-money venture capital firms, which is increasing growth for companies focused on security and other technologies. Given the size of the tech companies in Seattle, the size of the venture capital community is significant, says Cunningham.
Seattle also has strong educational roots, he continues, citing the University of Washington as one of many institutions generating tech talent.
ID Experts is one of the cybersecurity startups to come from the Seattle area.
Cunningham explains how a lot of exits have happened in Chicago, driving an increase in entrepreneurship and innovation. Assertify is one example of a startup to come from the Chicago area, which hosts large incubators in its downtown area.
The region is also a hot area for startup growth because it's a popular travel hub, which contributes to business growth. Salespeople are not typically headquartered at the company's main office, he explains, and frequently need to travel in and out of headquarters. In this sense, it's helpful to be located in a travel hub.
Gordon and Ackerman referred to Austin as an up-and-coming area for cybersecurity opportunity. The region has a growing tech community and has been home to security startups. Ackerman also cites San Antonio as a region growing with cyber expertise. Advancements there are largely driven by initiatives from the US Air Force and US government, which has the National Cybersecurity Center of Excellence in the area.
Allegis' Ackerman cites education as a primary reason security innovation is growing in the Atlanta area, where Georgia Tech has begun to offer cybersecurity programs. Its graduates go on to fuel innovation in the security space with engineering talent, which he calls the "raw material" of building startups.