INSUBCONTINENT EXCLUSIVE:
Empires rise and fall, and none more so than business empires
Whole industries that once dominated the planet are just a figment in memory eye, while new industries quietly grow into massive
behemoths.New York City has certainly seen its share of empires
Today, the city is a global center of finance, real estate, legal services, technology, and many, many more industries
It hosts the headquarters of roughly 10% of the Fortune 500, and the metro GDP is roughly equivalent to that of Canada.So much wealth and
power, and all under constant attack
The value of technology and data has skyrocketed, and so has the value of stealing and disrupting the services that rely upon it
Cyber crime and cyber wars are adding up: according to a report published jointly between McAfee and the Center for Strategic and
International Studies, the costs of these operations are in the hundreds of billions of dollars & and New York top industries such as
financial services bear the brunt of the losses.Yet, New York City has hardly been a bastion for the cybersecurity industry
Boston and Washington DC are far stronger today on the Acela corridor, and San Francisco and Israel have both made huge impacts on the space
Now, NYC leaders are looking to build a whole new local empire that might just act as a bulwark for its other leading ecosystems.Today, the
New York City Economic Development Corporation (NYCEDC) announced the launch of Cyber NYC, a $30 million &catalyzing& investment designed to
rapidly grow the city ecosystem and infrastructure for cybersecurity.James Patchett, CEO of New York City Economic Development Corporation
(Photo from NYCEDC)James Patchett, CEO of NYCEDC, explained in an interview with TechCrunch that cybersecurity is &both an incredible
opportunity and also a huge threat.& He noted that &the financial industry has been the lifeblood of this city for our entire history,& and
the costs of cybercrime are rising quickly
&It a lose-lose if we fail to invest in the innovation that keeps the city strong& but &it a win if we can create all of that innovation
here and the corresponding jobs,& he said.The Cyber NYC program is made up of a constellation of programs:Partnering with Jerusalem Venture
Partners, an accelerator called Hub.NYC will develop enterprise cybersecurity companies by connecting them with advisors and customers
The program will be hosted in a nearly 100,000 square foot building in SoHo.Partnering with SOSA, the city will create a new, 15,000 square
foot Global Cyber Center co-working facility in Chelsea, where talented individuals in the cyber industry can hang out and learn from each
other through event programming and meetups.With Fullstack Academy and Laguardia Community College, a Cyber Boot Camp will be created to
enhance the ability of local workers to find jobs in the cybersecurity space.Through an &Applied Learning Initiative,& students will be able
to earn a &CUNY-Facebook Master Degree& in cybersecurity
The program has participation from the City University of New York, New York University, Columbia University, Cornell Tech, and iQ4.With
Columbia University Technology Ventures, NYCEDC will introduce a program called Inventors to Founders that will work to commercialize
university research.NYCEDC map of the Cyber NYC initiative
(Photo from NYCEDC)In addition to Facebook, other companies have made commitments to the program, including Goldman Sachs, MasterCard,
PricewaterhouseCoopers, and edX.org
Two Goldman execs, Chief Operational Risk Officer Phil Venables and Chief Information Security Officer Andy Ozment, have joined the
initiative advisory boards.The NYCEDC estimates that there are roughly 6,000 cybersecurity professionals currently employed in New York City
Through these programs, it estimates that the number could increase by another 10,000
Patchett said that &it is as close to a no-brainer in economic development because of the opportunity and the risk.&From Jerusalem to New
YorkTo tackle its ambitious cybersecurity goals, the NYCEDC is partnering with two venture firms, Jerusalem Venture Partners (JVP) and SOSA,
with significant experience investing, operating, and growing companies in the sector.Jerusalem-based JVP is an established investor that
should help founders at Hub.NYC get access to smart capital, sector expertise, and the entrepreneurial experience needed to help their
JVP invests in early-, late-, and growth-stage companies focused on cybersecurity, big data, media, and enterprise software.JVP will run
Hub.NYC, a startup accelerator that will help cybersecurity startups connect with customers and mentors
(Photo from JVP)Erel Margalit, who founded the firm in 1993, said that &If you look at what JVP has done … we create ecosystems.& Working
with Jerusalem metro government, Margalit and the firm pioneered a number of institutions such as accelerators that turned Israel into an
economic powerhouse in the cybersecurity industry
His social and economic work eventually led him to the Knesset, Israel unicameral legislature, where he served as an MP from 2015-2017 with
the Labor Party.Israel is a very small country with a relative dearth of large companies though, a huge challenge for startups looking to
&Today if you want to build the next-generation leading companies, you have to be not only where the ideas are being brewed, but also where
the solutions are being [purchased],& Margalit explained
&You need to be working with the biggest customers in the world.&That place, in his mind, is New York City
It a city he has known since his youth & he worked at Moshe Moving IN NYC while attending Columbia as a grad student where he got his PhD in
Now, he can pack up his own success from Israel and scale it up to an even larger ecosystem.Since its founding, JVP has successfully raised
$1.1 billion across eight funds, including a $60 million fund specifically focused on the cybersecurity space
Over the same period, the firm has seen 32 successful exits, including cybersecurity companies CyberArk (IPO in 2014) and CyActive (Acquired
by PayPal in 2013).JVP efforts in the cybersecurity space also go beyond the investment process, with the firm recently establishing an
incubator, known as JVP Cyber Labs, specifically focused on identifying, nurturing and building the next wave of Israeli cybersecurity and
big data companies.On average, the firm has focused on deals in the $5-$10 million range, with a general proclivity for earlier-stage
companies where the firm can take a more hands-on mentorship role
Some of JVP notable active portfolio companies include Source Defense, which uses automation to protect against website supply chain
attacks, ThetaRay, which uses big data to analyze threats, and Morphisec, which sells endpoint security solutions.Opening up innovation with
SOSAThe self-described &open-innovation platform,& SOSA is a global network of corporations, investors, and entrepreneurs that connects
major institutions with innovative startups tackling core needs.SOSA works closely with its partner startups, providing investor sourcing,
hands-on mentorship and the physical resources needed to achieve growth
The group areas of expertise include cybersecurity, fintech, automation, energy, mobility, and logistics
Though headquartered in Tel Aviv, SOSA recently opened an innovation lab in New York, backed by major partners including HP, RBC, and
Jefferies.With the eight-floor Global Cyber Center located in Chelsea, it is turning its attention to an even more ambitious agenda
Uzi Scheffer, CEO of SOSA, said to TechCrunch in a statement that &The Global Cyber Center will serve as a center of gravity for the entire
cybersecurity industry where they can meet, interact and connect to the finest talent from New York, the States, Israel and our entire
global network.&SOSA new building in Chelsea will be a center for the cybersecurity community (Photo from SOSA)With an already established
presence in New York, SOSA local network could help spur the local corporate participation key to the EDC plan, while SOSA broader global
network can help achieve aspirations of turning New York City into a global cybersecurity leader.It is no coincidence that both of the EDC
venture partners are familiar with the Israeli cybersecurity ecosystem
Israel has long been viewed as a leader in cybersecurity innovation and policy, and has benefited from the same successful public-private
sector coordination New York hopes to replicate.Furthermore, while New York hopes to create organic growth within its own local ecosystem,
the partnerships could also benefit the city if leading Israeli cybersecurity companies look to relocate due to the limited size of the
Israeli market.Big plans, big resultsWhile we spent comparatively less time discussing them, the NYCEDC educational programs are
Students will be able to take classes at any university in the five-member consortium, and transfer credits freely, a concept that the
NYCEDC bills as &stackable certificates.&Meanwhile, Facebook has partnered with the City University of New York to create a professional
master degree program to train up a new class of cybersecurity leaders
The idea is to provide a pathway to a widely-respected credential without having to take too much time off of work
NYCEDC CEO Patchett said, &you probably don&t have the time to take two years off to do a masters program,& and so the program flexibility
should provide better access to more professionals.Together, all of these disparate programs add up to a bold attempt to put New York City
on the map for cybersecurity
Talent development, founder development, customer development & all have been addressed with capital and new initiatives.Will the community
show up at initiatives like the Global Cyber Center, pictured here (Photo from SOSA)Yet, despite the time that NYCEDC has spent to put all
of these partners together cohesively under one initiative, the real challenge starts with getting the community to participate and build
upon these nascent institutions
&What we hear from folks a lot of time,& Patchett said to us, is that &there is no community for cyber professionals in New York City.& Now
the buildings have been placed, but the people need to walk through the front doors.The city wants these programs to be self-sustaining as
&In all cases, we don&t want to support these ecosystems forever,& Patchett said
&If we don&t think they&re financially sustainable, we haven&t done our job right.& He believes that &there should be a natural incentive to
invest once the ecosystem is off the ground.&As the world encounters an ever-increasing array of cyber threats, old empires can falter & and
Cybersecurity may well be one of the next great industries, and it may just provide the needed defenses to ensure that New York City other
empires can live another day.
