The Cybersecurity Industry is Booming as Hackers Get the Upper Hand, According to MGCS Panelists

The increasing frequency, sophistication, severity ─ and success ─ of cybersecurity attacks on large, well-heeled corporations is roiling the cybersecurity landscape, said a group of industry experts during a panel discussion on Tuesday at the Michigan Growth Capital Symposium. More important, they said, the growing demand for greater protection of corporate intellectual property and assets is creating lucrative opportunities for both cybersecurity start-ups and established companies offering risk assessment, monitoring and mitigation services.

“We are at an unprecedented point in the security landscape where a number of factors are converging,” said Ted Shorter, the CTO of Certified Security Solutions. “Anytime new disruptive technology trends come along, such as the cloud and the Internet of Things, they bring a new set of security issues and vulnerabilities. There’s also been a realization in the hacker community that large targets yield bigger payoffs, and we’re seeing sophisticated nation-state attacks now.”

“It’s not a question of if, but when ─ and what will be the magnitude of the breach and the amount of data that will go out,” said Marc Dominus, senior manager and U.S. ERM Solution Leader at Crowe Horwath. “There’s not only concern about the value of lost data and intellectual property, but also about the brand impact, which can be severe. Reputational value can be eroded quickly.” Target, Home Depot and eBay are still wiping egg off their corporate faces months after breaches resulted in the theft of credit card information on millions of customers.

In the past, cybersecurity was strictly considered an IT function at most companies. Not so anymore, said Jim Goldman, chief trust and security officer at CloudOne. He reported cybersecurity is “being rolled up” from the basement shop to the boardroom suite, where it is receiving high-level attention from Fortune 500 corporate boards. “Traditionally, companies were worried about protecting the personal data of their clients,” Goldman observed. “Now they are worried about protecting their own intellectual property.”

Different security service providers are deploying various strategies to help clients defend against and recover from cybersecurity attacks, said the panelists. These measures include “proactive forensics,” where a client company stages a mock breach-and-response event, and “ethical hacking,” where experts make penetration attempts and develop patches to close cyber loopholes. Protective measures are being taken in many cases to prevent data leakage and loss perpetrated by company employees and third-party vendors. “There’s also greater emphasis on prioritizing data to protect what’s most critical,” Dominus said. “You can’t mitigate everything.”

The prospects for cybersecurity revenue growth and expansion are bright at both the industry and the investment levels, the panelists agreed. “Earlier, the greatest concern about cybersecurity risk was in the financial industry, but now there is concern across all businesses,” Dominus noted. “We’ve seen significant growth in demand for our services and more regulatory guidance.”

Goldman commented: “We’re increasing our revenue by offering enhanced security controls. We’re able to customize our services and add special security features, and then up-charge for these enhancements.”

Ford is Fueling the Resurgence of Mobility Innovation in Detroit, says Keynote Speaker Bill Coughlin, the Head of Ford Global Technologies

Henry Ford once said: “A business that makes nothing but money is a poor business.” Bill Coughlin, the president and CEO of Ford Global Technologies, has taken that message to heart. Over the past decade, he has spearheaded Ford’s efforts to accelerate mobility innovation and entrepreneurial ventures in Detroit, the legendary automotive capital of the world.

“It’s exciting to be part of the resurgence of mobility,” said Coughlin, who delivered keynote remarks on Wednesday at the Michigan Growth Capital Symposium. “We don’t want the Motor City to lose its mojo as an innovator in the mobility space.”

Leveraging the power of intellectual property is the key driver behind Ford’s innovation strategy and its long-term goal to be a leader in urban mobility, according to Coughlin, who is a patent attorney. As a subsidiary of Ford Motor Co., Ford Global Technologies is charged with oversight and protection of the company’s patents, trademarks and other intellectual property. It also has a mandate to leverage IP for optimum value and to enhance the company’s business strategy. Coughlin and his team have developed a detailed roadmap for achieving these ambitious objectives.

“We look at intellectual property not just as a legal matter but as a business, and we run it as a business,” Coughlin said. “It’s an important growth business for us.” Ford’s approach to creating value around intellectual property includes: co-sponsoring innovative projects, coaching employees internally and making investments in start-ups and cutting-edge technologies. Currently, Ford is the industry leader in creating patents that will fill the company’s pipeline for years to come. “If we do all this right, it becomes a virtuous circle, and we can sustain our competitive advantage,” Coughlin adds.

Among Coughlin’s and Ford Global Technologies’ most successful collaborative initiatives are:

TechShop Detroit – Ford and TechShop Inc. have turned a 33,000 sq. ft. facility adjacent to Ford’s Dearborn product development center into a Silicon Valley-style start-up incubator. Innovators, ranging from weekend tinkerers to software engineers, are able to use the facility’s tools, prototyping equipment and computers to invent the next big thing in automotive technology.

Techstars Mobility, Driven by Detroit – Ford is partnering with Magna International, Verizon Telematics, Dana Holding Corp., McDonald’s Corp. and American Honda Motor Co. on the launch of the mobility- and transportation-focused business start-up accelerator. Initially, 10 start-up companies have been selected from among nearly 350 applicants for the three-week mentorship program, which kicks off on June 9. Over the next three years, 30 companies will move to Michigan to build mobility solutions and bring new technologies to market.

In 2013, Ford made its first acquisition in 13 years when it purchased software start-up Livio Radio, a Livonia, Mich.-based maker of a platform for in-car apps, with a focus on audio and music services. Now operating under the Ford Global Technologies umbrella, Livio is advancing connectivity for customers and leading the way for in-vehicle connectivity throughout the automotive industry.

While substantial progress has been made at Ford Global Technologies since Coughlin took the helm, creating new ideas and escaping the old ones in an industry long known for its stodgy ways and silo mentality continues to be an uphill climb. “We’re trying to think more like a Silicon Valley company,” Coughlin said, “but Ford still has a ways to go in working with start-ups and venture capitalists.”

Successful Female Entrepreneurs and VCs Share Their Strategies for Entry and Advancement in the Entrepreneurial Ecosystem

Michigan is doing better than the nation as a whole in moving women into leadership positions at venture capital investment firms and venture-backed companies, but there is still plenty of room for improvement. Recent industry figures show that 15 percent of the venture capitalists and 9 percent of the CEOs of venture-backed companies in Michigan are female versus 6 percent and 3 percent, respectively, at the national level.

During a panel discussion on Tuesday at the Michigan Growth Capital Symposium, three women who have carved out successful careers in the entrepreneurial ecosystem shared their stories and offered advice.

“Things are getting better, but in slow drips,” remarked Nicole Walker, the director of venture capital at Baird Capital. “When I entered the venture capital industry, I knew very little about the VC pathway. Increasing exposure to and awareness of what venture capital is will help women move into the ecosystem. As a woman, I look at things differently. Having women at the table increases diversity of thought.”

“I look at being female as an opportunity,” said Christine Gibbons, the CEO and president of HistoSonics, an Ann Arbor-based medical-device company. “Women in entrepreneurship and medical devices are rare, so I stand out in the crowd. That might be the one thing to help people remember me.”

Creating tight networks of women to provide mutual support is critical for entry, advancement and success, according to Amy Cell, chief matchmaker at Amy Cell, a consulting company specializing in talent acquisition. “Many women have formed deep relationships through networks to deal with mutual challenges,” she said. “It’s a misperception to say women are competitive with each other.”

The panelists offered a number of strategies to help women break into the entrepreneurial ecosystem and rise to leadership positions. These include:

  • Develop strong self-confidence
  • Be willing to take risks and move out of your comfort zone
  • Seek out a mentor who can provide career guidance
  • Use networking to build valuable contacts and open doors
  • Develop a stellar track record of personal and professional accomplishments
  • Focus attention on product quality and capital efficiency rather than gender

“No matter who you are talking to, it all boils down to respect,” Cell concluded.

Internet of Things Offers Promising Entrepreneurial and Investment Opportunities, Says Panel of Experts

The Internet of Things, or IoT, created the loudest, most lasting buzz at the 2015 Michigan Growth Capital Symposium among entrepreneurs who are trying to harness its potential as well as venture capital investors who are assessing its revenue and investment prospects.

In 2014, $300 million was invested in 97 venture rounds for IoT start-ups. Predictions are that 50 billion connected devices will be in use by 2020, as smart products rapidly evolve into smart companies and eventually, smart cities.

“IoT is still in the early stages of development and happening sporadically, so there will be lots of unintended consequences,” observed Jonathan Murray, managing director of Draper Triangle Ventures. “In some areas, it will add value. In other areas, it will be frivolous. There is tremendous potential for IoT and big data to create deep insights and manage things better in our lives and societies. However, there is also the frightening reality that privacy is dead.”

During a panel discussion, a group of B2B and B2C entrepreneurs, venture investors and legal and cybersecurity experts identified several major issues in the IoT space.

Consumer versus industrial IoT – Right now, the consumer side is driving early IoT infrastructure development, as wearable fitness devices, smart-home systems and connected-car technologies come into the marketplace. “While the consumer market is interesting, the industrial and enterprise IoT market has more potential to create value,” observed Brad Erickson, a research analyst in mobility and IoT for Pacific Crest Securities. “At this point, hardware is far outpacing software in enterprise IoT. However, hardware’s value deflates over time, as we saw in the wireless space seven or eight years ago. Software services must be developed to drive value over the long term.”

Internet security – IoT is enhancing connectivity and adding value across many sectors, but strong security protocols must be put in place to realize those gains, according to Denis Foo Kune, the CEO of Virta Laboratories. “We’re seeing the same thing in IoT that happened to PCs 10 years ago,” he explained. “Hackers are looking for valuable information and weak end points. Health-care records, credentials and passwords can open the way into personal accounts. We have a chance with IoT to get this right and create strong security architecture from the get-go.”

Legal ramifications – The Federal Trade Commission is ramping up its scrutiny of IoT companies and urging them to adopt best practices to address consumer privacy and security risks. “As often happens with new technology, our legal system is reactive and tries to plug existing laws and regulations into places where they don’t fit,” commented Kevin DiDio, who specializes in corporate law and transactions at Varnum. “IoT companies need to bake security and privacy into the design of connected devices, keep connectivity in mind during manufacturing and give training to employees.”

Entrepreneurs, Universities, Corporations and Venture Capitalists Must Work Together to Jump-Start Innovation, Says MGCS Keynote Speaker Brad Keywell

Entrepreneurs have a major role to play in solving some of today’s most challenging business problems, said Brad Keywell, the CEO and co-founder of Uptake Technologies, during his opening remarks at this year’s Michigan Growth Capital Symposium.

“There are not many geographies, industries or parts of our country and our economy where entrepreneurs can’t provide major value through disruption today,” Keywell stated. “What we need most to solve problems that have become clear from a business standpoint are entrepreneurs and a sense of disruption, as well as a willingness of those who may not want to be disrupted to partner with the disruptors to unlock some of that value.”

This is as good a time as any to start a business, according to Keywell, who noted “there’s more capital chasing deals now than in the late 1990s and early 2000s.” Areas of interesting entrepreneurial opportunities include:

Connecting what’s not yet connected – “With all the social media that exist and this amazing super-computer in our pocket called a phone, there are still things that are not connected. There are still people in neighborhoods and communities who are not connected. There are entire countries such as India that need to be connected. There are small boutiques that might not have a way to present what they have in an organized manner.”

Solving hard problems – “While it’s easy to look at all the technology infrastructure that exists and say everything is working great, the fact is, computing power will continue to increase, and the data that is being created will continue to tax that computing power. Hard problems around solving technology riddles need to be addressed. There is a whole wave of interesting, behind-the-scenes technologies, cloud-enablers and other infrastructure-related businesses that geniuses at many schools like Michigan are rethinking.”

Unlocking opportunities – “While a number of blue sky new constructs have been created by pure technologists and technology teams utilizing the Internet, there are also opportunities that exist within companies and communities all over the world. How do you unlock those? How do you take domain expertise and interesting data and get at it? Often those who have the data and the problems that need to be solved don’t have the entrepreneurial construct to address those problems.”

Keywell’s personal role in the entrepreneurial realm has expanded greatly over the past 15 years. As the co-founder and managing director of the venture capital firm Lightbank, he has made investments in 93 technology companies. He also has spearheaded the launch of the Illinois Innovation Council and established a foundation to teach entrepreneurial principles to kids. Recently, Keywell has come full circle and returned to his favorite role, starting things, with the founding of Uptake Technologies, an industrial predictive analytics company.

While Silicon Valley has long been the pace-setter for innovation and entrepreneurship, its lead has narrowed considerably in recent times, according to Keywell. “The obsession over Silicon Valley as the only place where great things can start is old,” he said.” I think great things can and do start all over the country.”

The key ingredients for fueling a strong entrepreneurial ecosystem are: big companies that engage with risk-seeking, bold-thinking entrepreneurs, universities with a big appetite to facilitate technology transfer and capital providers. “When those four things exist, a lot can happen,” Keywell concluded.

Mountain Labs helps hospitals deliver data and prevent security breaches

At nearly every hospital across the country, there is an ongoing clinical trial, research project or quality improvement initiative. These investigations are integral to improving patient care and ensuring that the healthcare system of the future is being explored today. Naturally, these research teams often use patient records and other hospital data to analyze the effectiveness of new treatments, develop clinical guidelines and best practices and, most importantly, improve patient outcomes and public health.

The dirty little secret of the healthcare industry is that, despite the billions invested in healthcare IT over the past seven years, requests for hospital data sets are fulfilled manually by understaffed IT departments. This process is designed to counteract the security liability created by making highly regulated health data accessible outside of hospital IT systems. However, manual oversight is expensive – each request for data costs about $2,500 to fulfill, and hospital employees must wait about 12 weeks from initial request to receipt of the data.

Hospitals have been willing to pay this price, and for good reason. The Identity Theft Resource Center reported over 330 separate data breaches in the healthcare industry in 2014 alone, which exposed a total of 8,277,991 patient records and cost more than $750 million. With an average cost of $2.4 million per breach, many hospitals have seemingly decided that the financial impact of a potential HIPAA data breach outweighs the benefits of making data openly accessible. However, we believe that healthcare providers can’t afford to ignore the benefits of sharing data and collaborating with others to improve our healthcare system.

This is why Mountain Labs has developed Symport, a standalone data access portal that provides data sets through secure online databases, rather than spreadsheets and email attachments. Symport is similar to a virtual data room for hospitals, allowing IT departments to broker access to sensitive data sets in a closely monitored environment.

Using Symport, hospitals can manage access to data sets containing personally identifiable health information and can revoke that access at any time. With Symport, hospitals have the ability to securely share patient data without manual oversight while providing data on demand to doctors, researchers, analysts and other collaborators. In short, Symport makes data sharing cheaper, faster and more secure.

Since incorporating in April 2014, Mountain Labs has raised over $500,000, released the first version of Symport and secured multiple pilot projects at the University of Michigan Health System and University Hospitals’ Seidman Cancer Center. To further our vision, Mountain Labs will be presenting at the 2015 Michigan Growth Capital Symposium to identify investors who can help us make Symport available to healthcare organizations throughout the Midwest.

This guest post was contributed by Alex VanDerKolk, president of Mountain Labs. Mountain Labs is one of 32 companies that will present at the 34th Michigan Growth Capital Symposium this week. Register to attend here, and follow the conversation on Twitter with the hashtag #MGCS2015.

Bill Coughlin, CEO of Ford Global Technologies, Will Be the May 20 Keynote Speaker at the 34th Michigan Growth Capital Symposium

Bill Coughlin ─ who has been a catalyst for technological innovation and entrepreneurial activity within Ford Motor Co. and the state of Michigan for well over a decade as president and CEO of Ford Global Technologies ─ will deliver his keynote remarks on Wednesday morning, May 20, the second day of this year’s Michigan Growth Capital Symposium. During his talk, Coughlin will provide insights into entrepreneurial innovation through the lens of Michigan’s premier global automotive company.

“We are pleased to welcome Bill to the Symposium and look forward to hearing his remarks about the growing interaction between large innovation-minded corporations in Michigan and entrepreneurial technological start-up companies that have been launched here,” says MGCS founder David Brophy, finance professor and director of the Center for Venture Capital and Private Equity Finance at the Ross School of Business. “There is a disruptive set of technologies in our state that has global implications and global markets. We need strong partnerships with Ford and other major players to develop the full potential of this entrepreneurial innovation.”

While at Ford, Coughlin was instrumental in developing TechShop in Detroit, a do-it-yourself workshop for inventors that has fostered innovation and contributed to a dramatic increase in patentable ideas by Ford employees. In 2013, he was honored as Entrepreneur of the Year by Automation Alley, a Troy, Mich.-based technology business association.

More recently, Coughlin spearheaded efforts to bring Techstars, a national network of business start-up accelerators, to Detroit. The Motor City version, known as “Techstars Mobility, Driven by Detroit,” is supported by Ford, in partnership with Magna International and Verizon Telematics. The 13-week boot camp is designed to spur the growth of next-generation start-up companies focused on exciting technological innovations in mobility and transportation, ranging from ride-sharing to new rubber technology for tires.

“Bill will talk about all the different kinds of entrepreneurial companies we showcase at the Symposium and how they can interact with Techstars Mobilty and the program’s three corporate sponsors,” Brophy says. “This is the type of synergy and collaboration that’s needed to keep the wheels of Michigan’s entrepreneurial economy turning.”

Over the long haul, Michigan’s entrepreneurial-driven economic success will depend on several key actions. “First, we need to produce more and stronger companies that are building products and services based on disruptive technologies and business models,” Brophy explains. “Second, we need to further the development of our system of financial intermediaries within the state who can marshal resources from high-net-worth investors and institutional investors and direct those resources to these high-growth companies.”

The third factor, he continues, is “to encourage potential investors to pay serious attention to the role entrepreneurial activity has played, is playing and will continue to play in our state. We hope these institutions and individuals are attending this year’s Symposium to find out what’s going on, evaluate the entrepreneurial companies and venture funds we’ve brought together and then put their own money to work here in Michigan.”

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