Cybersecurity SAAS platform ThreatSwitch, launched last February by former Naval officer John Dillard, helps companies and federal contractors stay compliant with security regulations such as the National Industrial Security Program, the authority for managing the needs of private industries to access classified information.
ThreatSwitch helps companies defend against security threats by increasing usability, centralizing data and providing expert support.
“So it’s a little it like a TurboTax for industrial security,” Dillard said. Dillard first launched Big Sky Associates, a security operations improvement company, before moving on to ThreatSwitch.
“I’ve spent the last few months really getting ThreatSwitch investor-ready and we’ve done exceptionally well,” Dillard said.
Raising money for this type of company comes with a few challenges, Dillard said. ThreatSwitch’s first investor, Mach 37, is a cyber security startup accelerator program. Mach 37 awarded the ThreatSwitch team in the fall of 2016.
“They’re designed to be the first investor, that’s what they do. They know how to evaluate an early stage company. They’ve been around for three or four years and they’ve invested in 40 companies,” Dillard said.
Finding investors now that approach early-stage cybersecurity startups the same way has been a challenge.
“Cyber [in D.C.] is still a very small market compared to San Francisco or Boston but there is some understanding among angel investors in the area that you know if you place 10 bets one of them might be that giant return, but if you don’t place 10 bets you’re never going to find one,” Dillard said. “So the challenge is in less mature startup markets like Charlotte – the investors want every deal to be perfect and it’s not realistic. I’d love to have some Charlotte investors. It’s just tough.”
Seven employees across three states currently work at ThreatSwitch, not all of them full-time. The team doesn’t occupy a formal office space, preferring instead to follow a “results-only work environment.”
“You really just don’t maintain a permanent office space,” Dillard said. “You allow people to do work where they see fit and you use flex spaces to congregate when the team needs to congregate.”
Dillard plans to build out the entire technology team in Charlotte and keep the sales team in the Washington, D.C. area – a natural fit, he said, for a defense-based organization.
“The cool thing about North Carolina and Charlotte in particular is there’s a ton of technology talent and it kind of goes without saying that you can make less money in North Carolina and have a much better standard of living than in San Francisco or D.C. or New York, so I think it’s an ideal place to build that team.”
Dillard has spent a lot of time involved with startup-focused organizations in both Charlotte and the D.C. area. He has served as both the Charlotte chapter presented and the Southeast area director for the Entrepreneurs’ Organization, a global, peer-to-peer network of 12,000+ influential business owners.
His experience with his own companies and through watching others develop startups has taught him a few general lessons. The number one?
“Do not spend too much money on whatever your pet idea is,” he said. “When you’re a startup you can’t afford to do that. If there’s’ anything scarce it’s capital and time and you waste both of ideas that haven’t been conceptually tested on a customer. So talk to customers, all the time. You’d be surprised how few people actually do that.”