May 11, 2020
Source: jaydeep, WikiCommons
Good morning! This Monday, what one cybersecurity VC is looking for, WeWork-backed mortgage securities are tanking, and what the Fed learned from analyzing conference call transcripts. Want Index in your inbox each morning? Subscribe here.
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It's pretty obvious at this point that cybersecurity is having a moment: With millions of us forcibly moved to insecure networks, that was inevitable. But what's really interesting is what all this is doing to the cybersecurity startup scene. I recently spoke to John Funge, chief product officer at DataTribe, to find out exactly what's happening there.
The pandemic has made DataTribe rethink its investments. For one, it's looking at startups' sales cycles: Ones that are less reliant on in-person sales are more attractive amid the disruption, Funge thinks.
As for what DataTribe's looking for? Funge thinks there's a trend toward dashboards, to help CISOs cope with their "very fragmented cybersecurity." Tools that will help CISOs present cyber risk to other executives in "a way that is understandable" — e.g. dollars and cents — could be increasingly valuable as cyber risk becomes more prominent.
Earnings reports are a lagging indicator — they tell you what's already happened, not what's happening. And with so many companies withdrawing guidance for the current and future quarters, it's become harder than ever to tell what's really going on. Fortunately, we have tech!
Federal Reserve researchers used machine reading to analyze 2,500 companies' earnings call transcripts to try to get a sense of the mood. They found that executives are much more worried than they were in the last recession: 42% of companies talked about cutting investment last month, compared to 25% in the first quarter of 2009. Credit line drawdowns, meanwhile, are being discussed more than twice as much as they were in 2008. The researchers said "financial concerns did not return to normal" for 12 months after the last crisis began — so don't expect those depressing conference calls to go away anytime soon.