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Call Steve Adams (512) 947-1823

Monday Cup of Coffee Oct 9

Do geopolitical events have an affect on your daily life?  

Absolutely … Tensions with North Korea were the primary influence on mortgage rates over the past few weeks. 

The reaction from investors to the increase in tensions with North Korea was to buy relatively safer assets such as U.S. mortgage-backed securities (MBS). 

The added demand for MBS caused mortgage rates to decline. 

And Here’s Your Monday Morning Coffee…

A man is not old until regrets take the place of dreams.  ~John Barrymore

The founders of BitSight Technologies, Stephen Boyer and Nagarjuna Venna, believed they had a hot idea for a startup: a business that could assess and rate the cybersecurity of other businesses 

Today BitSight, based in Cambridge, Massachusetts, is in a sweet spot as companies look for ways to reduce the risks of being hacked. 

BitSight issues daily ratings that are akin to a credit score for security and help companies flag not only their own risks but also those of the companies they do business with: vendors, partners, acquisition targets. 

The risks from third parties burst into public consciousness after the 2013 attack on Target, when the credit-and debit-card data of 40 million customers was stolen through an HVAC vendor. 

While BitSight faces competition from newer entrants, it retains the advantage of having launched.

Customers pay on a subscription basis with annual fees ranging from a few thousand dollars to analyze a single company to more than $1 million to review thousands of suppliers. FORBES estimates BitSight’s revenues will reach $50 million in 2017 and $100 million in 2018.

To help them meet their promising potential, they brought on a whiz kid with a record for building startups as their CEO… someone who had run three cybersecurity startups  and sold them for a combined total of $1 billion!

Shaun McConnon has never founded a company himself, however, he has sold Raptor Systems to Axent for $250 million, Okena for $154 million and Q1 Labs $600 million. 

“Shaun is a unicorn as a CEO,” says David Aronoff of FlybridgeCapital Partners. “This isn’t a long-term market … one of Shaun’s great qualities is he does see market trends happening.”

To those used to seeing tech CEO’s in hoodiesMcConnon is a throwback. When he’s plotting strategy, he likes to sit at the Local, a gastro-pub near BitSight’s headquarters, and scribble on the backs of the previous week’s menus. 

He self-published a novel and reads voraciously, passing out books to staff and board members. “He gives me so many books it’s hard to keep up,” says Glenn Solomon, a BitSightboard member. “I’d put his energy level and drive against any of our founders and CEOs despite the fact that he is double the age of many of them.”

Oh, have we not mentioned his age… this tech whiz kid is 72 years old!

“I’m not the idea guy,” he says. “I usually inherit the idea or concept that over the next two years I morph into something that people want and will pay money for.”

At BitSight the idea guys are Boyer, now chief technology officer, and Venna, chief product officer. Both 40, Boyer and Venna met as graduate students at MIT when they were teamed on a class project. 

The idea for BitSight was simple in concept but excruciatingly difficult to execute. Rather than ask companies about their security risks, they would assess those risks from the outside, observing communications coming into and leaving a company’s network. 

“In 2011 nobody was paying attention to this. It was not on anyone’s radar,” Venna says. 

But then they brought in McConnon and now, Cabela’s, the hunting and fishing goods retailer based in Sidney, Nebraska, has been using BitSight for almost a year to monitor its own risks and those of some 85 vendors. 

The chain has been able to slash the time it takes to vet new vendors from days or even weeks to just hours, says Michael Christian, Cabela’s information security manager for cyber-risk and compliance. “Three or four times, I have actually said no to vendors,” Christian says.

Named to the Forbes 2016 list of next Billion Dollar StartupsBitSight has more than 500 customers, including AIG, Safeway, Ferrari and Lowe’s, and has assessed the security of some 70,000 companies and is on its way to fulfilling the amazing predicted potential because of their 72 year old tech Whiz Kid CFO.

As the Whiz Kid says, “No one gives you a ribbon in this business for coming in second or third.” ~ by Amy Feldman