GUEST ESSAY: The story behind how DataTribe is helping to seed ‘Cybersecurity Valley’ in Maryland
There’s oil in the state of Maryland – “cyber oil.”
With the largest concentration of cybersecurity expertise –– the “oil” — in the world, Maryland is fast changing from the Old Line State into “Cybersecurity Valley.”
Related: Port Covington cyber hub project gets underway
That’s because Maryland is home to more than 40 government agencies with extensive cyber programs, including the National Security Agency, National Institute of Standards and Technology, Defense Information Systems Agency, Intelligence Advanced Research Projects Activity, USCYBERCOM, NASA and the Department of Defense’s Cyber Crime Center. Within these government labs and agencies, taking place is a groundswell of innovation in deep technology cyber disciplines to the tune of billions of dollars annually over the past three decades.
In addition, the state is home to 16 nationally designated cybersecurity Centers of Excellence and a state university and college system that graduates more cyber-degreed engineers than any other state. The state counts approximately 109,000 cyber engineers.
Not only does the advanced development at these government agencies contribute to the success of cybersecurity in the state, but also so do many Maryland-based cybersecurity companies. Two notable examples are Sourcefire, acquired by Cisco for $2.7B and Tenable, which went public in 2018 with a market capitalization of approximately $4 billion.
Maryland and environs, including Virginia and Washington D.C., has also attracted a powerful and growing flow of venture capital to the region – about $1 Billion in 2018 and growing at an incredible pace.
Such bona fides led to the inaugural private “by invitation” Global Cyber Innovation Summit (GCIS) in Baltimore in May 2019. GCIS was a Davos-level conference with no vendors and no selling, where scores of chief security information officers (CISOs), top CEO’s, industry and government thought leaders and leading innovators discussed the myriad challenges in and around cybersecurity and possible solutions in today’s environment.
All this represents the early phases of a foundation-building process that is on track to eventually create a grander landscape. In the eyes of many cyber pros and investors, Maryland is becoming such a fast-growing cybersecurity hub that many believe it will replace the cyber component of Silicon Valley, hence becoming “Cybersecurity Valley,” within the next five years.
Tech epicenters
Maryland’s path toward a cybersecurity epicenter parallels Silicon Valley’s evolution decades ago when it became the world’s biggest and most respected information technology hub.
In Silicon Valley, the initial technology seeds were planted in World War II, when the U.S. government invested billions of dollars at Stanford and the University of California Berkeley and other key universities nationwide to develop cutting edge innovation deemed essential to winning the war effort, including radar and artillery technology. Post World War II, these universities were repositories of some of the most advanced technical expertise in the world and looking for opportunities and new applications.
Later in that decade, Frederick Terman returned to Stanford from Harvard as dean of the engineering school and encouraged the development of electronics in local businesses. In 1951, Terman went on to become the founder of the 660-acre Stanford Industrial Park (later named Stanford Research Park), which blossomed as electronic and technology companies signed long-term leases to make the Stanford Industrial Park their home.
Expansion continued, and in 1956 William Shockley, the co-inventor of the transistor at Bell Labs, left Bell and founded his own company, Shockley Semiconductor Labs. Shockley’s company employed many Stanford grads and was the first company to make transistors out of silicon— generating the Silicon Valley moniker.
In 1957, a number of Shockley ex-employees created Fairchild Semiconductor in Silicon Valley. Shortly afterward, many left Fairchild and founded their own semiconductor companies, giving “Silicon Valley” yet more credence. Semiconductor stars Intel and Advanced Micro Devices were born and Kleiner Perkins created the first venture firm in Silicon Valley in 1972 to provide capital and business growth expertise to the burgeoning innovation community. (Kleiner was the founder of Fairchild Semiconductor and Perkins was an early Hewlett-Packard computer division manager.)
The foundation of Silicon Valley was set, and today comparable technology development pieces are being laid in Maryland on the cybersecurity front.
Seeding ‘cybersecurity valley’
Janke
One of the key players fueling the cybersecurity growth surge in Maryland is DataTribe, based in Fulton. It’s a cybersecurity and data science “foundry” that uniquely helps create, finance and intensely coach brand-new startups manned by former cybersecurity and data science veterans of select federal research centers and national laboratories. Mike Janke, the co-founder of DataTribe, and a six-time CEO and former Navy Seal, observes “Before the creation of DataTribe in 2016, many Maryland-based cyber and related startups had to relocate to Silicon Valley to succeed.”
Bob Ackerman, Janke’s DataTribe co-founder, one of cybersecurity’s “Money Men” according to the Wall Street Journal and the founder of AllegisCyber Capital, the pioneering Silicon Valley-based early-stage cybersecurity venture firm, remembers this period well.
Two of Ackerman’s cyber startups — Synack and Area 1 Security had their origins in Maryland and the NSA, but both realized quickly that they needed the playbook, expertise, resources and relationships of Silicon Valley to succeed. “So, they moved west,” Ackerman says, “They had the expertise, but needed an ecosystem in which they could successfully grow and prosper.”
Today, with DataTribe in Maryland, it’s no longer physically necessary to re-locate to Silicon Valley – a huge plus given the region’s astronomical cost of living and uber competitive and high costs for start-ups.
“Maryland was one of the very first states to recognize the importance of information security, not only as a critical issue for the nation, but also as a strategic industry for the state,” said Governor Larry Hogan. “DataTribe and AllegisCyber have been foundational to our unrivaled cybersecurity ecosystem and critical to maintaining our nation’s information and infrastructure,” he added.
Maryland’s CyberPort
While cybersecurity stands out in Maryland, it’s also important to note that Maryland overall has become a strong, rapidly growing center for technology in general — a plus for cybersecurity because many cyber pros start out as IT workers with other specialties and only later pursue additional education and move into the cyber realm. According to the U.S. Bureau of Labor Statistics, the Baltimore metropolitan area alone had more than 61,000 people working in computer and mathematical occupations as of May 2017, almost all in IT-related fields. This made it the nation’s eighth-largest technology hub.
And perhaps more important is the pending development of “CyberPort” in South Baltimore’s $5.5 billion, fourteen million-square-foot Port Covington waterfront redevelopment project, analogous to the Stanford Research Park. Accompanied by a new nationwide marketing program, it will give the state’s cyber community a critical mass and corporate address built similar to Silicon Valley innovation clusters. DataTribe and AllegisCyber Capital have been on the ground floor of bringing the CyberPort vision to life and will be among the anchor tenants (with another 40-plus cyber companies) when the new campus is ready for occupancy in early 2021.
While Maryland focuses on looming prospects in coming years, it also enjoys the present, knowing there are plenty of openings for cyber pros, and that the number will only keep growing. It’s all part of a national trend – accentuated in Maryland because of its cybersecurity infrastructure. According to Cybersecurity Ventures, there will be 3.5 million unfilled cybersecurity positions globally by 2021 – up from 1 million in 2014. The current number of U.S. cybersecurity job openings – 350,000 to be exact – is up from 209,000 in 2015.
The best jobs, of course, are often at those companies pushing the cutting edge of technology. DataTribe startups do this in spades. With employees groomed at the likes of the National Security Agency, U.S Cyber Command, DARPA and classified R&D labs, they have strong backgrounds in offensive cyber capabilities, as well as defensive counter-measures, a key factor for commercial success. These engineers are “domain masters” and understand the fabric of cyber space – its structure, seams and vulnerabilities – much better than most in the cyber domain. Ackerman says this unique expertise gives DataTribe startups an unfair competitive advantage as they apply their knowledge to identify and anticipate future threat vectors and develop effective defenses.
“These backgrounds are critical because second place doesn’t matter in the cyber space,” Janke adds. “If you are second-best, your adversary will beat you.”
Supporting startups
DataTribe has been described as the “Silicon Valley Playbook in a Box” by investing $2M at seed stage and moving the startups into the DataTribe facility for 12 months. The playbook is designed to “over-resource” early stage startups by embedding a team of former CEO’s, CTO’s and sales/marketing leaders with decades of proven experience. This over-resourcing covers areas such as product development, product marketing, product launch, team building, customer and partner engagement. All these skills and advantages are at the core of Silicon Valley’s success but are in critically short supply in the nascent Maryland ecosystem. To date, DataTribe has co-built nine startups, partnering with technology domain masters to create startups operating at the forefront of cybersecurity innovation and creating entirely new categories of products that did not exist previously.
On average in the U.S, it takes a little over 22 months for a seed stage company to complete its Series A financing. DataTribe averages 12 months from seed to Series A funding – an astounding metric that demonstrates the advantage of over-resourcing.
Partnering with only three to four start-up teams a year (out of 250-300 under consideration), DataTribe keeps the bar high and leverages its domain knowledge to identify gaps in the cybersecurity market to help create companies to fill them. Seed-stage startups are financed with up to $2 million, as well as being offered an embedded team of experienced start-up executives with experience in the commercial sector; effectively adding the missing resource to go from “cyber practice” to “cyber product.” When the time comes, DataTribe leverages its San Francisco office to help DataTribe startups gain access to West coast customers, next round venture funding and entrepreneurial talent.
The first company at DataTribe – Dragos, a provider of cutting-edge cybersecurity solutions for industrial control system companies – has set an early standard for others by growing from three employees to more than 100 in the past two-and-half years and by twice raising venture capital from independent sources in Silicon Valley. It raised $10 million in 2017, from AllegisCyber Capital and Energy Impact Partners, and last year raised an additional $37 million from Silicon Valley-based Canaan. Janke says the company was valued at $139 million in its most recent round of financing. Robert Lee, the CEO of Dragos, was a former leader at the NSA for industrial control system cybersecurity.
Another DataTribe founder and CEO, Ellison Anne Williams of ENVEIL, previously led the team at the NSA working on better protecting the security of data sets. Both Dragos and ENVEIL set up shop at DataTribe to access essential expertise and resources and learn ways of the all-important Silicon Valley commercial ecosystem. Lee and Williams both knew that cutting-edge technology was insufficient by itself.
Other DataTribe startups – equally aware of the importance of Silicon Valley business know-how, resources and personnel networks – include Attila Security, which builds a zero configuration VPN firewall that better protects phones, laptops and security cameras, and Prevailion, which focuses on identifying malware-based cyber attacks, as they occur, materially reducing the time that an adversary can dwell within the networks of a target. Attila and Prevailion founders are intelligence community veterans.
Also disrupting new technology categories are BlueRidge AI and Refirm Labs. BlueRidge AI integrates the Internet of Things, machine learning and predictive analytics to enable manufacturers to transform their operations into globally competitive operations. ReFirm Labs, meanwhile, has developed a radically new approach to securing heretofore insecure connected devices through firmware validation. Like Dragos and ENVEIL, the founders of both BlueRidge AI and Refirm Labs developed their expertise at the NSA.
Keeping an eye on all these companies and now based at DataTribe is The CyberWire, the leading global cybersecurity news, analysis and information source.
Growth potential
Janke and Ackerman continue to see the future. They are building new state-of-the-art cybersecurity and data science products that are unique and disruptive in the global cybersecurity market. There are no “me too” technology companies in their mix. This gives them a big leg up on Silicon Valley companies that also have the “playbook,” but lack the expertise of nation-state operators who are often operating years ahead of the commercial sector. Maryland was once largely ignored by the venture capitalists of Silicon Valley. But no more.
Today Janke and Ackerman are upbeat, but not naïve. “We’ve obviously got the building blocks and the talent in Maryland to build another “Silicon Valley,” Janke says. “But we still need to collect more capital and build a better innovation ecosystem that can transform and leverage experience into market-leading companies.”
Adds Ackerman: “We know we have a lot of work ahead of us, but so did the founding fathers of Silicon Valley.”
About the essayist: Steve Kaufman, is a long-time business journalist including the San Jose Mercury News, Detroit News, and Individual Investor. He holds a BA in English from Northeastern University and an MS in journalism from Columbia University.
(LW provides consulting services to the vendors we cover.)
*** This is a Security Bloggers Network syndicated blog from The Last Watchdog authored by bacohido. Read the original post at: https://www.lastwatchdog.com/guest-essay-the-story-behind-how-datatribe-is-helping-to-seed-cybersecurity-valley-in-maryland/
