Why Does Innovation In Network Security Come From Startups?

Having started a series of posts on large enterprise products in the SME led me to pen some thoughts on why much of the innovation in the last fifteen years in networking and security has come from smaller companies. Breakthrough products like security appliances and virtualization were not pioneered by established industry behemoths, but originated with smaller companies willing to pioneer new product ideas and disrupt the status quo.

Why is this pattern of innovation consistent in the industry? Someone identifies a need, invents a new technology and builds a product. If they succeed, they become the eight hundred pound gorilla in the new market or are quickly acquired by a larger company.

Compared to established companies, startups usually have less capital, fewer people and limited brand recognition. Yet entrepreneurs continually start companies, engage with customers, develop products and bring them to market quicker and more effectively than large companies.

In theory, it should be straightforward for large companies with deep pockets and a talented workforce to create a compelling product that focuses on a customer need, and dominate a new market. In the endless cubicle farm of the large company, surely there is a team with the passion and drive to create a breakthrough product? Just as you need a critical mass to start a nuclear reaction, you need a number of critical elements to successfully pioneer a new product.

Element number one – the opportunity to engage with customers

As organizations grow larger, and roles become more specialized, it becomes more difficult for product architects and designers to interact directly with customers and understand how their products are being used. In a large networking company, the sales and service organizations often ‘own’ the customer, and engineering managers and developers get much of their exposure to customer problems via the feature requests and bug fixes of sustaining engineering. The job of understanding the customer environment and their challenges is assigned to a product manager who is expected to meet with customers, interact with industry groups, read analyst reports on the market and filter the requests of sales and support to divine customer needs. All in all, it’s not a great way to get close to the customer.

In my experience, startups spend an order of magnitude more time talking to customers and thinking about the challenges customers face. Ideally, interacting with and thinking about customers should happen at every level of a company. To add to that focus, a product team in a startup has a lot more autonomy in making product decisions. Conversely, the product manager in a large enterprise is often overwhelmed with data and research, and has much less authority to make controversial decisions. Sometimes, all the best research in the world doesn’t make a compelling product.