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Startup of the Day #13. “Cybersecurity is a pot of gold but it is still hard to sell a product”. Routine of WebTotem startup.

Startup of the Day #13. “Cybersecurity is a pot of gold but it is still hard to sell a product”. Routine of WebTotem startup.

16 Dec 2019

WebTotem is a Kazakh startup that stands out on the conferences and startup-villages thanks to their gaudy merch. These guys give away brand condoms. It is not just a joke: the idea is in a comparison of the sex revolution in the 60s and the behavior of modern website holders. Almost no one uses even the basic protection of their online projects. Here is how a startup changes the current situation.

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On the light side

The team of WebTotem is a group of twenty tech-geeks, who are naming themselves as ethical hackers. Such specialists search for system vulnerabilities not for the sake of profiteering but for removing these vulnerabilities. The team has victories on several international hacking tournaments.

-We have great expertise in the hacking technique. We started to work on the audit safety and simulations of hacker attacks five years ago. We were receiving orders from all around the world but this business cannot be scaled. We received a client, did the job, but nothing works on its own. This is why we invested our knowledge and profit from audit into the product creation, — told us Olzhas Satiev, WebTotem CEO.

The team’s mission is to give to every single website owner basic protection from malware actions: detecting open ports and backdoors, hidden miners, constant monitoring of access and a wide range of other tools. Such protection has to become a standard.

Almost all team members are from Kazakhstan, so the first product also appeared there: a Kaznet monitoring system. In 2017, at the moment of launch, in the .KZ domain there were working more than 140 thousand websites.

Each website was monitored regularly for any signs of break-ins or viruses. If such were detected, WebTotem informed the website owner about this via email. So to perform all these actions automatically, quickly and cheaply, we had to puzzle over the optimization of processes.

- We had to rewrite the program architecture triply to get a flexible optimized solution. Now, the monitoring and protection of one website cost only a quarter of a cent a month. So, when there will be one million websites on our platform, we will spend 2500$ a month for the cloud infrastructure, — added Olzhas.

Click the image to open WebTotem's profile on the Rocket DAO platform

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Everything necessary is for free

In two years WebTotem has grown into a complete platform with all the functionality, necessary to an ordinary website owner: from monitoring the availability and checking the presence of deface to antivirus and firewall. This solution is orientated on all website owners, who are working with website constructors like Wix or Tilda.

- As partners, we will be interesting for website constructors, when we will gather more users. We will integrate into a platform and a user will be able to purchase our protection for upcharge in the same interface where he made a website. We communicated with guys from Wix and they announced “a barrier to entry” equal to 10 thousand paying users. Currently, we have just about a thousand.

To enlarge the business scales, WebTotem team headed abroad and in Spring 2019 passed the selection into Startup Wise Guys Accelerator and started a legal entity in Estonia.

- Well, in Kazakhstan, startups exist in a bit limited environment and in constant “lung-bursting”. In this aspect, acceleration gave a possibility to take a different angle of view and start to think globally. What is more, Startup Wise Guys have quite a large network of contacts that helped us a lot. We had mentors from all around the world: from Estonia to Australia. Also, especially for us, they organized a meeting with the guys from NATO. We had meetings with specialists from the Ministry of Defence of France, C.I.A and NSA officers. They came to Estonia for a business trip, and the accelerator was lucky to arrange a meeting with them for us for a few hours. Such contacts change the way you think: you understand, what your potential clients do really want.

Being in the accelerator, we did a pivot and changed our business model. We decided not to work on a subscription model anymore. Now our we render our services for free, capturing the market — later on, it will be easier to monetize this product. For investors, it is a clear strategy and they positively react on such kind of a plan, — told Olzhas.

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Going-to-market strategy

Thanks to the accelerator, guys attend many conferences, and there they managed to find their first clients. It seems that the idea with gaudy merch works. For this idea, WebTotem’s team is grateful to the mentors of the accelerator.

Currently, the team has about a thousand of paying clients from all around the world, they have a possibility to monitor more than ten websites at once and help to eliminate detected problems by the specialists of a company.

- I am responsible for sales. If a founder cannot sell a product by himself, then there will be no salesman who can. Now we are negotiating with clients, talking about pilots. But next year we plan to create our own sales department.

The cybersecurity market is highly competitive. Our advantage is in resource-efficient system of monitoring. The cost of the service is low enough so we can provide services for free.

The cybersecurity market grew 30 times in the last 13 years. And this tendency will continue for the next few years (the graph). Techcrunch’s analyst sees “a bubble, that is not going to pop up soon” on the market of the cybersecurity.

 

Our main challenge was to build a perfectly organized system. We are constantly working on optimization, from times to times we come across websites, that are monitored longer than usual. This is the reason for even greater optimization.

Almost all backend is written on Golang, it helps us to develop a highly optimized system. These days, our DevOps is building a system of rapid connection to the cloud servers in case we would face some troubles.

On the current day, there are a whole KazNet and all the websites of the Baltic states in our monitoring field. It is about 300 000 pages. In the nearest time, we plan to add Poland, so our monitoring volume will grow almost 4 times larger.

Now we are negotiating with several investment funds, and I think we will close the investment round soon, and further on it is growth and process of capturing the European market and the subsequent transfer to the US, — told us the CEO of WebTotem.

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Pieces of advice for beginners

Cybersecurity is a hard-to-sell product. Like really difficult. It is also difficult to attract investments. Investors are not that good in understanding things in cybersecurity as they are in casual SaaS-solutions, thus they are afraid to invest. Even though, they do understand that it is a pot of gold right now.

To get the possibility of growth in the cybersecurity industry, you have to get hooked a first good client, do the pivots, and this will simplify the sales in the future. However, if you are a startup from the post-soviet territories, you have to clearly understand, that people in West will remain wary of you, as cybersecurity is quite a sensitive thing.

16 Dec 2019

 

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