Innovation During a Crisis: A story of PIE and Ice Cream – MixMode
Some of you may have seen the “funny” statistic in the last few months that during the pandemic, ice cream sales are way up while deodorant sales are way down. Let’s just say that, for me, it’s coffee ice cream. Dessert aside, this stat does lead one to think about what other trends occur during a pandemic or a crisis when we look back at events such as world wars, the Great Depression, the Global Financial Crisis (GFC) of 2007-08, etc.
So I have been paying attention to articles about trends during a crisis. Inc. magazine wrote an article on companies that survive and thrive in times of crisis. It turns out that true, game-changing innovation is a key component to a company’s ability to grow during a crisis.
The article highlights companies like Netflix and AirBnB. Netflix reinvented itself after the 2001 dotcom bust and eventually got into streaming, leading to explosive growth. AirBnB innovated during the 2008 crisis, seeing the need for people to travel at a low cost and for the homeowner to earn some extra money, and built a tremendous business.
Staying on this topic of innovation, you may have heard of Cathie Wood at ARK Investments. She is a very accomplished investor and I recently saw her on Bloomberg commenting on the outperformance of innovation during tumultuous markets. Cathie wrote this article about the outperformance of innovation in times of crisis in March 2020 which I think about almost every day.
In the article, she talks about companies with unique innovation capabilities outperforming, and cites the global financial crisis of 2008 as one example. “During the GFC, Software-as-a-Service and online retail were prime beneficiaries. As technology budgets were cut by 20-30% in and around 2008-09, for example, during its worst quarter Salesforce.com chalked up a 20% increase in revenues. At the same time, while retail sales were falling, Amazon delivered 14% growth during its worst quarter.”
The article goes on to discuss “the five innovation platforms evolving today – DNA sequencing, artificial intelligence, robotics, energy storage, and blockchain technology – and offering solutions to the problem.”
When MixMode thinks about innovation platforms, we are focused on artificial intelligence. Not as a marketing line used by far too many companies inside and outside of the cybersecurity industry. Rather, we are focused on building a great anomaly detection platform driven by Third-Wave AI.
What is Third-Wave AI and why does it matter?
Third-Wave AI is defined by DARPA as unsupervised AI, a big step forward from neural networks and basic machine learning (in many applications). With Third-Wave AI, the MixMode platform can build a given network baseline without supervision and operate without any rules. Why is this important? Two main reasons:
Now let’s look at innovation and how that is related to PIE (Productivity, Innovation and Efficiency)
At MixMode, in 2020, we focused on delivering PIE to our customers:
We didn’t focus on PIE because of the pandemic. We focused on PIE because that was our thesis entering 2020 based on hundreds of customer and prospect calls. The pandemic simply honed the enterprise’s focus on these elements.
Why do enterprises care about PIE? Cyber spend is going up every year. Fortune Business Insights reports that the global cyber security market size stood at $112B in 2019 and is projected to reach $281B by 2027, showing a CAGR of 12.6%.
At the same time, most cyber buyers feel like their budgets are getting squeezed and they need to find ways to execute on their goals with fewer platforms. In a recent Checkpoint Survey, 69% of respondents said the best approach for improving security in their organizations is a consolidation of security tools. For this reason, PIE has been an important theme for our enterprise customers and the primary driver behind our 2020 growth.
So when we look back at 2020, will these recents events push the industry to realize the path forward for securing the enterprise, on both a cost and effectiveness basis, is not to try and hire more and more staff? Will they push their security vendors to instead focus on providing actionable, AI-based alerting, instead of continuing to inundate existing staff with more alerts? Will vendors finally be able to start producing truly innovative, AI-based security solutions to help SOC teams spend their time analyzing true threats? Will more enterprises demand an unsupervised AI solution to provide a degree of zero-day threat detection that is so obviously missing from most security programs? Only time will tell if this pandemic and the events of 2020 will lead enterprise security leaders to demand game-changing innovation in their programs.