When Uncertainty Abounds, Focus Back on the Basics
1–8–2023 (Monday)
Hello and welcome to the first 2024 edition of The Intentional Brief - your weekly video update on the one big thing in cybersecurity for growth stage companies, investors, and management teams.
I’m your host, Shay Colson, Managing Partner at Intentional Cybersecurity, and you can find us online at intentionalcyber.com.
Today is Monday, January 8, 2024, and it seems that, like me, much of the cybersecurity world is taking a little longer than anticipated getting back into the office.
In fact, other than some geography-specific news around the conflict in Gaza and Russia’s war on Ukraine, the holidays were relatively quiet and has given us a bit of time to reflect on the year ahead. What does that reflection yield? Let’s dig in.
When Uncertainty Abounds, Get Back to Basics
As regular watchers of this program will no doubt be aware, we tend to focus here on the intersection between cybersecurity and its business impacts - particularly for privately held companies.
News articles from this week are highlighting a real sense of uncertainty for both investors and cyber pros.
Meanwhile, long-standing tech publication TechCrunch closed their year with a headline that read “2023 showed cybersecurity isn’t immune from brutal layoffs,” and brought some numbers to things - highlighting cuts at Sophos, Bishop Fox, NCC Group, Rapid7, HackerOne, and the fundamental corporate restructuring / deaths of Malwarebytes and IronNet.
The article didn’t include any analysis or quotes beyond what was made at the time, but lines up with what the Wall Street Journal predicts - literally headlined “2023 on Steroids.”
Similarly dour predictions are being made left and right for the private markets, with Bloomberg putting out a piece this morning entitled “Private Equity’s Horrible, No-Good ’23 Set to Continue Into ’24” - and the first quote in the article declares that 2024 “is going to be a slog.”
Perhaps this is true, and we’re certainly off to a slow start from a fundraising perspective, but in times of uncertainty, what should we be focusing on? I’ll give you a couple of suggestions that work just as well for the business side as they do the security side.
In times of uncertainty, we need to understand our controllables and focus on those things. The things we can’t control don’t deserve our attention in times of scarcity.
This concept isn’t new, of course, and whether you pull the idea out of the Serenity Prayer, or -like me - John Wooden’s book Wooden on Leadership, the direction is the same.
Here’s Wooden’s version, for reference:
‘We are paid to deal with fate. Those who prevail look fate in the eye and say, ‘Welcome,’ and then move ahead without complaint, excuse, or whining. While we can't control fate, we are or should be able to control our response to it. In leadership, your response becomes crucially important, because ultimately it is the response of your organization.’
So just as on the business side, we can’t control sales and must instead focus on expenses, on the security side, we can’t control attackers and must instead focus on defenses.
Wooden gives us another gem in his emphasis on the process, and not the outcomes:
“For most of my life I have believed that success is found in the running of the race. How you run the race - your planning, preparation, practice, and performance counts for everything. Winning or losing is a by-product, an aftereffect, of that effort. For me, it's the quality of your effort that counts most and offers the greatest and most long-lasting satisfaction.”
In addition to satisfaction, I’d offer that this is the best path towards a profitable, resilient business, as well.
In 2024, I’m going to be emphasizing these things with myself, and with my clients, and would encourage you to do the same.
Fundraising
From a fundraising perspective, as I mentioned, a pretty slow start for Week 1, turning in just over $4B in newly committed capital when all was tallied. There is, however, a couple of notable themes:
Banner Ridge Partners raised $2.15b for a secondary fund focused on distressed debt and special situations.
Palladium Equity Partners raised a $450m continuation fund for three Fund IV portfolio companies.
Obviously, the team at Banner Ridge is looking to take advantage of some of the headwinds promised in 2024, and the Palladium folks are finding a way to deal with longer hold times for a fund that initially closed in 2014.
Seems to me like both of these investment groups have read Wooden’s book and are focused on the controllable.
You can find links to all the articles we covered below, find back issues of these videos and the written transcripts at intentionalcyber.com, and we’ll see you next week for another edition of the Intentional Brief.
Links
https://techcrunch.com/2023/12/30/cybersecurity-not-immune-brutal-layoffs-2023/?guccounter=1
https://www.wsj.com/articles/cybersecurity-in-the-year-ahead-think-2023-on-steroids-ab711f4e