From Hardcore Techie to Successful Entrepreneur: Cybellum CEO Slava Bronfman (Part 3)

Sramana Mitra: By December, you had the MVP. How many of the other customers came on board?

Slava Bronfman: Just a handful in the first quarter of 2017.

Sramana Mitra: What was the incident to make you realize that you had to pivot?

Slava Bronfman: It was a combination of things. On one hand, we had a few sales. We were approaching tons of customers. That’s what I was doing all day long. We understood that we live in a red ocean area. There were tons of solutions that were solving the same problem. Maybe not as unique as we were solving it. Maybe our solution was a bit better.

In retrospect, we were 10x better with our solution. Back then, it was IT security – protecting email servers and detecting vulnerabilities in email attachments. It would be very hard for us to build a huge business that way.

Sramana Mitra: The reason you came to that conclusion is because of the competitive landscape?

Slava Bronfman: Yes. Any customer that we would approach already had a solution or they weren’t seeing a huge urgency to replace what they had. Our technology was great. People liked it in the validation phase. When we got to commercial stuff, you not only need to validate the product, you also have to sell it.

Sramana Mitra: One of the things we do in our program is extensive competitive positioning. If it’s too crowded, it’s very hard to sell. You can do a few sales, but you cannot scale. There’s a huge problem in cyber security in particular. It’s a crowded market. The CISOs and CIOs won’t take meetings. They can’t take 500 startup meetings and look at every product.

Cyber security companies coming into the market are going through an OEM deal with a larger player who already has a seat at the table or going through MSPs. These are sales strategies to mitigate overcrowding. I think your investors didn’t pick that up.

Slava Bronfman: It’s tricky to pick that up in the very early stage. They were trying to validate the founding team and how deep the technology is. We did have a differentiator, but it wasn’t significant enough.

Sramana Mitra: You were in this red ocean strategy mode. You decided that you needed to pivot. Explain what that pivot was and what was the analysis that led you to that.

Slava Bronfman: We decided to cut losses and find our next idea. We had a good understanding of the cyber market. We wanted to find a big problem to solve. We had a few things that we wanted. One of them was that it would be a huge market, and also a blue ocean.

Sramana Mitra: Something a lot less crowded but still a big problem.

Slava Bronfman: Correct. Another thing that we were looking for was an unfair advantage where we can take our unique cyber skills. A lot of our background was in IoT systems. We needed to find an area where we can leverage our advantage. That’s where we started.

We approached our advisors. One of our advisors back then was working for Mercedes Benz. He was leading the product security team there. We asked him what his biggest problems today were. We learned that there is a new area which is called the product security. Manufacturers are starting to understand that their products are becoming software-defined.

Traditional IoT solutions and methodologies cannot be applied because product security is very different. In those mission-critical systems, there are two unique things. One is that there is almost no manufacturer in the world that is ever thinking how most of the components are coming from complex supply chains. The other thing is, regulation is just starting unlike in the IT world where you have tons of regulations. Last year, there was no regulation on product security.

Sramana Mitra: No checks and balances on how to prevent being hacked.

Slava Bronfman: Exactly.

This segment is part 3 in the series : From Hardcore Techie to Successful Entrepreneur: Cybellum CEO Slava Bronfman
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