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I been involved in the cryptography/security community for many years. I continually see privacy/security start-ups struggle. There are lots of reasons. But, I
by vabmit 10y ago
I been involved in the cryptography/security community for many years. I continually see privacy/security start-ups struggle. There are lots of reasons. But, I think the key one is that doing something online securely will always be more difficult and expensive that doing it insecurely. This truth was instilled like a law of physics when the internet was first designed.
There's only a certain number of people that are deeply passionate enough about their privacy to put in the extra effort or pay the extra cost. So, companies in the space tend to plateau after 2-4 years. They essentially saturate their markets and the (rather static) size of these markets are rarely large enough to sustain the company (this is especially true when hardware is involved in the business plan). In cases where they are sustainable, I have seen it be at the level of "life style business" rather than exponentially growing startup that can IPO at a level that will provide investors a significant return. While there have been exceptions over the years, I would caution people on HN from doing privacy and security startups until you sit down and honestly and truthfully estimate the size of the market that you are targeting.
Us old folk remember another secure phone company before SilentCircle/Blackphone - CryptoPhone. I have talked with some friends that remember the CryptoPhone product failure. Some thought that the Snowden revelations changed things. They thought that such companies would be viable now due to mainstream market apatite. But, I think over the next few years we'll see more evidence that this isn't the case.
Privacy is an area that is very easy to get passionate about and become emotionally invested in. But, it's probably not a great space for your startup (or for your investment).
- rdtsc 10y ago> But, I think the key one is that doing something online securely will always be more difficult and expensive that doing it insecurely. Yeah that is a good way to put it. There are periodic spikes for demand when there are large publicized security breaches -- Snowden, Sony, Target etc. Most people out there are hard to convince to jump through extra hoops to get more security unless they see those around them or themselves being hurt by not having it. There is market for silly "rfid wallet blockers" because the story is "it protects you against identity theft". It is mostly a scam, but the point is people relate to identity theft, it happened to someone they know probably. > There's only a certain number of people that are deeply passionate enough Yap. An additional observation, from talking to a few people at Silent Circle is that those working there are also deeply passionate about it (why would they hire anyone who isn't, right?). That is good of course, but is also bad, because it translates to rose colored glasses when it comes to market demand. Everyone thinks there are many others out there, who are just as interested and passionate as themselves, so it is easy to overestimate demand. I think to a certain extent that the idea behind the lawsuit. Someone somewhere massively overestimated the market demand.
- esdamerica 10y agoI feel sad reading this post. Silent Circle might be having some issues but cryptophone.de & esdcryptophone.com have been going strong for over 10 years. In fact our product groups have grown. We now offer intrusion detection for cellular networks esdoversight.com and the highly successful esdoverwatch.com imsi catcher detection system.