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Why a cybersecurity startup could be a golden egg for UK entrepreneurship

Our society relies on the Internet, and global connectivity is growing exponentially. Wireless is the dominant means of access, and the Internet of Things means that a huge number of devices are now connected around the world, with many more to come.

But amidst this explosion in technology, we need security. We need to feel safe using our smartphones, tablets, and laptops. We need to know that private communication is actually private communication. And we need to trust the institutions that we work and bank with.

Unfortunately, there are people out there who are looking to steal from you and listen to your conversations. They are often technically adept and well versed at using technology to attack you with malware, hold your computer to ransom or siphon money from your bank accounts. These cybercriminals are innovating and evolving, with their technology moving as fast or faster than the defences designed to keep them out.

Cybersecurity needs to innovate and evolve at the same pace as the attackers, if we are to keep up. We need ideas, a desire to create something new and motivation to make a difference. This is why cybersecurity is an area of technology that is particularly interesting for talented people to focus on, and to come up with ideas that can grow from a seed into a genuine business.

Growing opportunities in cybersecurity

Cybersecurity startups in the UK are ideally positioned for growth in the next few years, and may even end up a safer bet for new business ventures than other technology sectors. According to the private equity and venture capital database Pitchbook, venture capital funding in UK cybersecurity companies has increased more than seven times over since 2013. This demonstrate much faster growth than UK venture capital funding as a whole (up 1.6 times over the same period).

Why are cybersecurity startups so attractive, particularly in the UK? One major reason is the UK's strength in financial services. The financial sector is a key adopter of cybersecurity software, because the threats that cybercriminals pose can lead to such enormous loss, both economically and in terms of reputation.

London is considered a world hub for finance, and there are already a number of successful initiatives designed to support startups focusing on finance and cybersecurity. For example, Level 39 in Canary Wharf, London, is now Europe's largest technology accelerator space for finance, cybersecurity, retail, and smart city technology companies. Likewise, Cyber London was established last year, offering Europe's first cybersecurity accelerator and incubator space.

Financial institutions like Barclays and Santander also understand the value of encouraging startup innovation in cybersecurity, because it allows research and development in security technologies that may become hugely valuable in the future.

Cybersecurity areas of focus

There are countless gaps in cybersecurity technology, offering opportunities for budding entrepreneurs, looking for problems to solve. No one has quite found a truly viable alternative for passwords, an age-old way to identify ourselves but one which is beset with problems. One of the weakest forms of user authentication, we still use them to protect important data. We'll likely see more focus in areas like biometric technology and are already using fingerprints to unlock smartphones.

Large organisations also have a big problem with keeping track data, with some having a clear lack of visibility and understanding around the key assets they hold in their networks. Companies want to see which devices and applications are being executed and connected to via company servers, where users are logging in, and how data is being transported. And this will become more of a focus as organisations are forced to adapt to comply with the new General Data Protection Regulation.

Exciting developments in automation and artificial intelligence, though positive, may also result in thousands of new alerts and notifications, threatening to overwhelm security teams, or could create vulnerabilities and allow backdoor access to company networks. But how could such new technologies be used for the cybersecurity cause, to predict what future attacks could look like, simply by analysing catalogues of old data?

Businesses are trying to get away from traditional approaches to cybersecurity, which were often derived from passively gathering information which would then be acted upon afterwards. Real-time protection is the aim of the game, and there’s certainly much to be gained by introducing a new wave of innovators with fresh perspectives.

An ideal birthplace for a security startup

The UK can undoubtedly provide a strong and sturdy environment in which to start or expand a business. It has one of the lowest corporation tax rates in the G20, and it’s possible for you to register a company within 48 hours. Four of the world's top universities are based in the UK, and the country has the second largest labour force in Europe.

Support is plentiful, both from the private sector, with schemes such as UK Trade and Investment's Global Entrepreneur Programme, as well as numerous accelerators and venture capital firms that can provide funding and guidance for new ideas. There are organisations like Tech City UK which is developing the digital business and startup ecosystem in the UK, and Old Street’s Silicon Roundabout, a well-known technology cluster in east London.

The UK has one of the most exciting and supportive technology hubs in the world; the burgeoning industry of cybersecurity is experiencing massive growth as a result of an increasingly sophisticated problem. The two undoubtedly go hand-in-hand.

A single solution isn’t good enough – this constantly evolving risk requires continual innovation, new ideas, and ambition and but the scale of the issue also holds fantastic potential reward. As a tech entrepreneur looking for your next business venture – why wouldn’t you consider cybersecurity?

Kirsten Connell, managing director, Cyber London and HutZero