By Adamantios Koumpis November 27, 2022
Startups in Europe – and elsewhere
CS-AWARE Corporation is not only one of the partners of the CS-AWARE-NEXT Consortium, but also the main vehicle for the exploitation of all project outcomes and results. The company itself is a successful spin-out of the previous CS-AWARE Innovation Action and considered as a success story because we exhibited commitment to build a sustainable business that will help local public organisations increase their awareness and build capacities to successfully fight with cyber security threats. This might be our European perspective on how to build a business. Let us see a little more far away…
Vanta is a security compliance automation startup that was founded in 2016 and is headquartered in San Francisco. Some weeks ago we read that the company raised 40 million US dollars by strategic CrowdStrike’s investment vehicle, Falcon Fund, as part of ‘an extension of a Series B funding round that closed in June, which valued the company at 1.6 billion US dollars’.
What might be useful is to spend some time looking into few details that might help us understand the field of technology-driven entrepreneurship. We list them in the form of bullet points – and would welcome to receive reactions, inputs and thoughts:
- One may still be a startup even thought six years old as a company! The startup process in general can take an unpredictably long period of time, so being six years old is still OK for a company to regard itself as a startup!
- While still a startup, Vanta has managed to build an impressive customer base: according to the aforementioned source, ‘over 4.000 fast-growing companies trust Vanta to automate their security monitoring and get ready for security audits in weeks instead of months’. The number would still be ok if it were 10 times smaller: 400 is also a good number for a customer base of a young startup. What the three zeros mean, on the other hand, is the proven capacity of Vanta to successfully scale up. On this, I dedicate one further point below.
- Good to see the asymmetry in the two figures above: one is valued 1.6 billion US dollars and receives (only) 40 million funding. Is this normal? And, the trickier question: is this fair? It is normal that all startups make great claims about their potential for success. Of course, this naturally gives space to raise questions from potential investors and financiers as to why a particular startup is bankable or not.
- The question now is how much funding is necessary to allow a startup to fully commercialise their innovation. This question had been successfully answered by Vanta, as they had built a base of 4000 customers. This proves the capability of Vanta to unquestionably scale up their services.
- The biggest risk, however, that startups face comes from elsewhere and relates to emotional exhaustion: all the efforts needed for the startup process to bring results can take a long period of time and are especially challenging because of the high failure rates and uncertain outcomes. One may wonder how things might have evolved, in retrospect, if the Apple founders had dissolved their venture few weeks after they had founded the company?
- For CS-AWARE Corporation the challenge comes from two fronts: to build a sustainable business out of an undisputable innovative technology, and secondly and most importantly, build a market where our customers will commit not only financial but other organisational resources for assessing, monitoring and taking active care of their cybersecurity.
The last point would define an important milestone for the success of the CS-AWARE-NEXT project, as it would demonstrate to a wide audience of potential customers the need to take cybersecurity as a serious concern. To this, we see the need to keep on investing on well-targeted communication and dissemination actions, to help increase the awareness and the basic literacy levels.
The shelves of airport bookshops are full of books by business specialists and entrepreneurship gurus who tell that the capacity to invent and believe in a story about what one is and where they head towards can be crucial for the survival of a business. This is not applicable to startups only but to large enterprises and organisations, and, with things changed that should be changed, also to nations, and to our common European project itself.