Blog

Einat Katzenell /

Cybersecurity Execs Losing Sleep

   

Cyber PracticeLike any other branch of the hi-tech industry, cybersecurity startups must show a viable business model and a market for their products in order to raise capital. But while cybersecurity entrepreneurs might have it relatively easy convincing Angels and VCs of their business opportunity, viability, and immediate need and market size, they’re having the hardest time finding qualified employees to take their ideas forward.

The cybersecurity market is big. How big? That depends on which reports you’ve been reading. I’ve seen industry PR (like this one) suggesting a current market of $100 billion, with projection upwards of $170 billion by 2020. Whether or not you believe these figures (and one should always be cautious when citing sponsored research) it’s not unreasonable to argue the market for cybersecurity solutions is not going to shrink anytime soon.

The cybersecurity playground is sophisticated. How sophisticated? First let’s classify the culprits: black hats, hacktivists, cyber-terrorists and computer criminals, differentiated by motivation. Second let’s list the methods: malware, ransomware, DoS attacks, identity theft, just to name a few. The solutions offered or pursued by cybersecurity companies are extremely sophisticated and include monitoring and detection solutions, prevention solutions, system management solutions and more.

Something’s got to give

Take a big market and sophisticated playground, and it’s clear to see the how many niches cybersecurity startups can exist with little or no competition in their space. The problem is, and I’m not the first nor will I be the last to say this, these startups are desperately competing for qualified engineers to take their cutting-edge technologies forward.

In the Israeli arena we’ve seen dozens of new cybersecurity companies established in the past two years. Considering the annual rate of engineers graduating local universities together with the number of soldiers graduating the IDFs prestigious technological units – it’s difficult to see how the demand by these new companies can be met.

Working with my firm’s cybersecurity clients, I’ve witnessed founders leaving no stone unturned in pursuit of qualified candidates, using all methods possible, and even commencing recruiting processes when these engineers are still in military service or taking class at university.

Sadly, it doesn’t look like there’s a local solution to this shortage in the next few years, and it will be interesting to see whether we’re going to see some kind of consolidation between companies working on similar or parallel products, or some other tectonic move – otherwise it’s hard to imagine how the cybersecurity industry is going to satisfy skyrocketing demand.


Einat Katzenell offers strategic and practical advice to hi-tech, life sciences and biotechnology entrepreneurs, investors, early-stage and mature companies, academic institutions and business ventures, and is widely regarded an industry insider and a leader in her field.

More posts by Einat here.

einat@kdlaw.co.il | +972.9.9500555 | LinkedIn


DISCLAIMER: Blog posts are not designed to provide legal advice or create a lawyer-client relationship. You should not take action based on this content.

SHARE:

read more in: