I always enjoyed the Bible story about David and Goliath and that’s one reason why I am fascinated by how startups are able to take customers from huge industry incumbent.
In case you forgot, here’s a nice summary of that story from the New York Times: “David did not kill Goliath just because he was brave. He looked up at Goliath and realized that if he fought Goliath’s way with a sword, Goliath would kill him. But if he picked up a rock and put it in his sling, he could hit Goliath in the head and knock Goliath down and kill him. David used his mind when he fought Goliath.”
A Belmont, Mass. email security service, GreatHorn, is growing fast by aiming its sling at the head of the Goliaths — such as IBM, Cisco Systems, and Palo Alto Networks — who sit atop the information security industry. In so doing, its revenues are soaring at a 162% annual rate which just helped it raise a $6.3 million Series A round of funding — adding to the $2.7 million it raised earlier.
You have probably heard about the problem that GreatHorn (founded in April 2015) is trying to solve — it’s called SpearPhishing — which is when you receive an email that looks like it’s from your boss or someone you know, it asks you to click on a link or open an attachment, and in so-doing, your computer is instantly infected with nasty software that spreads throughout your company’s computer network.
That nasty software might shut down your company’s access to its data unless the company sends a big hunk of bitcoin to the virus-makers — accounting for a whopping $3.1 billion in damages over the last two years according to GreatHorn Co-Founder and CEO Kevin O’Brien.
GreatHorn is doing well by offering what O’Brien told me in a recent interview is “comprehensive, cloud-native protection against message-based threats” that’s works because of the company’s “machine learning and automated response capabilities.”
More specifically, GreatHorn’s service is more focused than that of its large rivals and that focus is helping it win new business. According to O’Brien, GreatHorn protects “email, chat and collaboration tools including Google, Office 365, Yammer and Slack — over 65,000 mailboxes. Our solution can automatically detect and remediate social engineering and phishing attacks and prevent them from escalating to full-blown breaches. Because we are the only provider to do this, GreatHorn is winning large enterprise business away from Symantec, CA Technologies, IBM, FireEye, Proofpoint, and Palo Alto Networks.”
O’Brien believes that these “legacy security players simply haven’t been able to keep pace with this kind of attack. It isn’t a question of resources or competence, but rather, one of focus: many of the larger vendors have business lines that date back to before we entered this new realm of cloud, and while they’ve made steps to adapt their products and strategic investments to address it, they’re beholden to clients who are still running systems on servers in racks, in closets or data centers somewhere in the Midwest.”
Security industry experts have recognized GreatHorn which O’Neill explains “was a finalist for the 2017 RSAC Innovation Sandbox competition. GreatHorn was also named in Gartner’s May 2017 Cool Vendors in Cloud Security 2017 report.”
O’Brien — a UMass Amherst Philosophy major — has worked for companies that were acquired. He worked with @stake in 2000 — which Symantec acquired in 2002. Experian acquired the next company where he worked — QAS — for £106 million in 2004. He had a major sales role at a data analytics startup acquired by Thomson Reuters and from there was an early hire at CloudLock — which was acquired earlier in 2017 for about $300 million — after holding roles in sales, marketing, and account management/strategy.
GreatHorn has growth ambitions — hoping to move beyond its 10 employees and 40 customers. In so doing, I see GreatHorn growing along vectors — such as customers and capabilities — that I wrote about in Disciplined Growth Strategies.
As O’Brien explained, “There are three keys to scaling GreatHorn. The first is product/market fit which enables us to acquire clients. For that you need to follow stage-appropriate market acquisition — and we are on fire when it comes to that — building customers in financial services, healthcare, and retailing. The next is building a stage-appropriate team — for example, as we grow, we need the people who can service a Fortune 500 company and get 10 times more efficient. Finally, we have to make sure we don’t run out of money.”
If O’Brien can scale GreatHorn, I would not be surprised to see another Goliath acquire it in a few years.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.