Austin's early-stage cybersecurity sector is getting an upgrade -- two, actually.
The first, hack/secure, is a new Boston-based funding syndicate with members spread across major tech hub cities, including Metasploit founder HD Moore in Austin. Then, next week, Manifest is formally launching its networking and mentorship organization, which includes several of Austin's most prominent security experts and founders.
Let's start with Manifest, led by Dave Endler, a security expert who founded Jumpshot and was senior director of security research at TippingPoint, which was acquired by HP.
Endler said Austin has a strong base of IT security talent, including many working for some of the city's biggest tech companies, who may be looking for ways to turn their insight and ideas into a startup. But they often lack experience in creating compelling products, finding funding and building an experienced team. That's where Manifest comes in.
The network of security experts provide mentorship to help startups avoid common pitfalls and connect with potential investors, beta testers and customers. There's no money involved at the moment. It's an altruistic venture aimed at leveraging Austin's security talent into fast-moving companies.
"Austin has an amazing security DNA," he said. "Part of it is because there are big companies that lure people here and some of those people are gainfully employed and they might just be waiting for the right opportunity to go do their own startup."
Austin has several hacker groups and investors interested in cybersecurity, but it doesn't have a broader network for early-stage companies to connect with consultants, advisors and investors.
"This is really meant to elevate us all by making Austin a little more visible in the security landscape," he said.
Endler has been in cybersecurity since he left college, including stops at the National Security Agency, MIT Lincoln Laboratory, Deloitte & Touche and iDefense before joining TippingPoint in Austin in 2003. It gave him exposure to founding a company, working at public companies and going through acquisitions. He found he liked startups like iDefense the most.
Endler founded Jumpshot in 2010. The company sought to create a fun and simplified version of software that cleans up your desktop and protects against viruses. It had a wildly successful Kickstarter campaign that raised $162,000-plus and grew into a company that was acquired by Avast Antivirus.
After working with Avast for two years, Endler left in August 2015 in hopes of getting back into startup mode.
"Austin has a 25-yr-plus history of hackers & freaks & security folks. But it doesn't have much of a history of security companies."
"I wanted to help other people figure out that early-stage process, which is still really hard, not just for security startups, for any startup," he said.
It's also about finding funding in Austin, where founders don't have as many options as their competitors in Boston or Silicon Valley. Endler said Austin has investors committed to bolstering startups, including security startups, but he acknowledges it's still a challenge, despite having "warm relationships" with VCs and angels in Austin.
Finding early customers can be especially difficult for cybersecurity startups with products that protect against breaches that may not happen frequently.
"It's like selling a vitamin versus selling a pain-killer," Endler said. "If you have a headache now, I can easily sell you an Advil. But if I'm selling you Vitamin C and you don't get sick, how do you know it was because of that?"
Many startup teams don't have the right marketing and sales skill sets and struggle early on. Often, they just need the right advisor or co-founder to help bring them to market, he said.
Manifest's mentoring and partnership network includes Ted Ross, CEO at Exodus Intelligence; Alan Kessler, CEO at Thales e-Security; Donald Park, chief of staff at Vista Equity Partners; Antoine (A.J.) Johnson, senior director of Duo Security's central region; Steve Guengerich, principal at Powershift Group; Brady Roberts, a senior advisor at Axon Global; and several others.
A Close Tie with hack/secure
One of Manifest's mentors, HD Moore, is also partner at hack/secure where he is monitoring Austin's cybersecurity scene for investment opportunities.
The newly launched hack/secure syndicate is likely to bring more attention to cybersecurity startups in Austin. It was founded by serial entrepreneur and venture capitalist Chris Lynch, co-founder of the Boston-based VC firm Accomplice, and Cort Johnson, a partner at Accomplice.
HD Moore, who founded Metasploit, which was acquired by Rapid7, is on the board of directors of hack/secure. It's a new investment syndicate that includes about 25 of the most prominent cybersecurity founders in the U.S. It hopes to form and fund 100 new security companies in three years.
The group backs security startups found on AngelList with up to $250,000, which Moore said goes a lot farther in Austin than in New York, Boston or San Francisco.
Moore said hack/secure helps fill a void because, for most founders, it's difficult to convince VCs to fund cybersecurity startups. And that's especially pronounced in Austin, which doesn't have a huge crop of VC firms with interest in security.
"Security companies are tough. Essentially the only thing your product can do is prevent something else from happening," he said. "They're really difficult to show the value of over a period of time."
Yet Austin is emerging as a hot spot for security talent.
"Austin has a 25-year-plus history of hackers and freaks and security folks," he said. "But it doesn't have much of a history of security companies working here in Austin."
