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Vitaly Mzokov

Vitaly Mzokov is Head of Innovation Hub at Kaspersky where he helps nurture break-through projects by identifying new trends, scouting for best-in-class startups and building technological alliances with partners. He’s a business developer from a technical background and also an ice hockey fan and snowboarder.

Latest stories by Vitaly

Seven reasons why your tech start-up didn’t make it into a business incubator

  • Small business
  • min read
    • Who's going to fund your start-up? In the world of investments, the rule of the three Fs applies: friends, family and fools. In other words, only the people closest to you or those willing to take unreasonable risks with their money are likely to invest in a brand new project. But what do you do if those resources aren't there or have been exhausted? A variety of start-up accelerators, business incubators and venture funds can come to the aid of start-ups. What's the benefit of joining a business incubator? Business incubators are an appealing option for entrepreneurs who want to move fast and get the right level of support while they grow. And, as it's estimated that 90 percent of new businesses fail, an incubator can give you the best chance of not only surviving but thriving. Incubators or innovation programs can include state-funded projects that promote entrepreneurship, usually in technology-related fields. Another model is an incubator based inside an established organization that can offer expertise in a related field, like the Kaspersky's Innovation Hub for breakthrough ideas relating to information security, or The Foundry, an innovation investment and partnership by global consumer goods giant Unilever. These internal company incubators can give you significant expertise to get your products to market, with a strong potential for the incubating company to become your first big customer. So you've found a scheme that fits your business ambition. What next? Well, you need to make a successful application. I've read hundreds of applications for our incubator, so I've noticed why some succeed and others fail. Here are seven things not to do during your application. 1. Don't just focus on your home market Many projects at their initial stages focus almost entirely on tapping their home market, but give little thought to starting out or expanding in an international market. Joining an incubator outside of your country of incorporation can yield many benefits down the line for your market expansion, as you'll become more familiar with the needs of different markets beyond your own doorstep. You first need to understand which markets the product is best suited to, and only then take your offer to an incubator in the appropriate country. This will substantially increase the project's chances of finding support and getting the investment. For instance, I know an Italian start-up project that recently applied to a Spanish business incubator, because the project already had an audience in Italy but was looking to expand into Spain. 2. Don't knock on the wrong doors Before approaching an accelerator, business incubator or venture fund, you should find out as much as possible about it to make sure your project is relevant. These organizations have their own specific profiles and focus on certain industries. From the numerous conversations I've had with investors, I can say that start-ups who don't do their homework end up making a very bad first impression. For example, start-ups have approached our incubator with offers to develop a product or service that has absolutely nothing to do with our focus on information security. 3. Don't forget how to sell yourself A balanced start-up team must have both developers and people who will concentrate on promotion and sales. Technical resources alone are not enough to succeed – business development is equally important. And all the team members must be able to promote their idea or product. What's more, every team member needs to keep in mind that they're creating a product that's going to be sold, so it has to meet the needs of its target audience. 4. Don't present an idea instead of a business plan We often see start-ups approach us with nothing more than an idea – no business plan whatsoever. My team has to work out how the idea can be sold, what channels to use and who their target audience is. That's why I recommend writing a business plan or a business case to make it easier for an incubator to evaluate your idea and the potential opportunity. There are a number of extreme cases: while one start-up may come with nothing more than idea, another may arrive with a business plan that's hundreds of pages long! In fact, a one-page application works just fine if it outlines the key elements: the proposition, infrastructure, customer and finances. Online services like Business Model Canvas can help you create a decent business plan using a template. 5. Don't be afraid to share Some start-ups are apprehensive about using the services of accelerators or investment funds because they think their bright idea could be hijacked, or they may lose too much control. So they come into the application process with a protective attitude. In reality, start-up investment conditions can vary dramatically from investor to investor, and a lot depends on the status of the project. Different incubators may also have different business goals. For example, Kaspersky's Open Innovations Program focuses on talent scouting and promoting projects – we don't envisage owning any shares in the start-up. 6. Don't arrive too early, or too late It's important that you show up at the incubator at the right stage in your project's development. Some start-ups come too early when they're still at the idea stage. There aren't many incubators that will support projects that are at the proof-of-concept stage. The latecomers are often those start-ups that miscalculated their 'burn rate'. They borrowed money from their families but it ran out a few months before they could develop their proof of concept. By the time they arrive looking for real investment, these start-ups have usually run out of steam and investors are reluctant to get involved. 7. Don't put all your eggs in one basket To an extent, getting investment itself can be a numbers game. Don't give up if you're rejected by one business accelerator. Try another one. Try applying to investment centers in different countries. You also need to test your idea and 'sell' it at industry meetups and investor meetings. Use every opportunity to get feedback from your target audience. Don't sell yourself short. Don't be afraid. Put yourself out there – the more, the better – to stand the best chance of finding an investor or partner who's interested in supporting your idea. Follow these tips, and you will stand the greatest chance of success. Good luck!

Opportunities for businesses beyond the wild west of cryptocurrencies

  • Blockchain
  • min read
    • Cryptocurrencies get a lot of exposure in the media. Not all of it's positive, for sure. But with this widespread publicity, they're starting to become established in the public's imagination: businesses and consumers are learning how to use these new currencies and exploring what value it can bring them. The cryptocurrency industry offers a fantastic opportunity for pioneering entrepreneurs, leading the charge at the beginning of a brand-new industry. Go mining in the crypto hills Let's investigate the hype: In 2010, two people bought two pizzas for 10,000 bitcoins. Fast forward to 2017, and 10,000 bitcoins could feed an entire city with pizzas for several months – with an estimated value of $US 100 million. We don't see that kind of exponential growth in cryptocurrencies today – in fact, the value of bitcoin has declined since its peak in 2017 – but there's definitely still plenty of gold to be mined in them there crypto hills. There are many different cryptocurrencies – bitcoin being just the most well-known one – and it's still something of a 'wild west' out there. There are scams. There are flops. But mixed within these, a few will succeed and grow fast to become the 'next bitcoin'. And we're just at the start of this new economy. Cryptocurrencies are going mainstream – with retail outlets like Microsoft and Subway now offering payment by bitcoin. In a recent Kaspersky survey, we found that 19 percent of consumers have starting to pay for things using cryptocurrencies. It's booming in Asia – the continent of the cryptos – and starting to grow in North America and Europe too. But some nations have already closed the shutters: cryptocurrency trading is banned in some countries, like India, as the government sees it as a risk to the country's financial stability. That's because it's less regulated, and with less potential to regulate it in the future, plus it's not secured by tangible assets like gold or silver. Limitations imposed at the government level could eliminate many larger professional incumbents from entering the market. David v Goliath: taking on the big financial institutes Cryptocurrencies represent the next big opportunity for financial investing: risk-taking individual investors are adding a little frisson and high-growth opportunity to their portfolio, and established financial institutes, who are looking to diversify and get a foothold into this new territory, are becoming cryptocurrency investors and establishing crypto-exchanges too. Cryptocurrencies are challenging the status quo of financial services. Established financial institutes are on the back foot: centuries of knowledge are no guarantee of success or attracting the confidence of investors. So there's every opportunity for start-ups to compete and leapfrog ahead of the 'old guard.' We're entering a brave new world where previously secure technologies that required complex and expensive operating systems are now being replaced by blockchain economy models: a new alternative to secure and distribute data, which will disrupt everything from buying a house to transporting vital medicines – or help you to authenticate luxury goods. You can see this wealth of opportunities in the many start-ups who are launching crowd-sourcing campaigns to invest in their own ICO (initial coin offering) or STO (secure token offering). These are the more agile and affordable blockchain equivalents to an IPO. ICOs and STOs – what are the security risks? Investors see ICOs and STOs as a means of investing easily in a new breed of more agile businesses. But many people overestimate the level of protection of their funds, so it's far from being without risk. The absence of professional finance advisors and enterprise-grade cybersecurity solutions enables cybercriminals to use public information for prospective investors to see which projects are raising funds and which are the most popular. To raise funds for the ICO or STO, you need to write a smart contract. It's a program on your cryptocurrency wallet that says 'if you raise money from this person, execute X or Y logic.' Cybercriminals can see vulnerabilities in the smart contract code and find a way to divert funds. This has created a bad reputation for ICOs. The community is trying to mitigate this by introducing security token offering (STO) campaigns. Any campaign originating from the token offering should be audited to review the source code by an independent and reputable supplier. Crypto-exchanges – big numbers trading can carry big risks Crypto-exchanges are big business: the monthly trading volume of some of the largest ones combined amounts to hundreds of billions of US dollars. It's a temptation too big to ignore for many cybercriminals. They regularly target cyber-exchanges, and some attacks are successful. In the first half of 2019, at least seven attacks resulted in losses of tens of millions of dollars in each breach. A crypto-exchange is, in general, a far more attractive target than an organization's IT systems, which is likely to yield only customer or confidential data that then needs to be sold on the dark web to be turned into liquid cash. The history of data breaches against the biggest cryptocurrency exchanges shows that the cyber-risk is far higher for cryptocurrencies than other types of data-rich businesses, with a 51 percent likelihood of an attack or phishing. How to secure your cryptocurrency business Fortunately, cryptocurrencies use blockchain – a highly reliable way of making data immutable through distributed access, making hacking extremely complex. The blockchain technology is usually the strongest link in the chain: the weakest ones are every system built on top of it. High-profile cryptocurrency data breaches are usually the result of weaknesses in the IT infrastructure of the business rather than the data or service held in the blockchain itself. Often, a start-up builds its own IT and financial systems, presenting a huge surface for attackers to penetrate. To make your system secure, focus attention on everything you build on top of the blockchain – like your accounting systems or currency exchanges. Although crypto-exchanges are a new technology, the security issues remain the same as for other IT systems: concentrate on strengthening your own infrastructure so you're well protected if other businesses with weaker security join the blockchain. Plus, of course, protect against the ultimate weak link: employees and partners who may unwittingly give access to prospective hackers. Investing in rock-solid security is a must. You should investigate options for specialist cybersecurity solutions for your cryptocurrency exchange. Additionally, make sure you have endpoint security that's designed to support blockchain applications to protect against malware and phishing attacks. Simple rule: protect everything. Be aware of the enhanced risks of new services, like distributed applications or smart contracts, which can be more vulnerable to exploitation. The more secure you can become, the greater the opportunities there will be for your cryptocurrency business to flourish.
blockchain economy vertical

Chain reaction: How to succeed in the blockchain economy

  • Blockchain
  • min read
    • You've probably heard a lot in the media about blockchain – and particularly cryptocurrencies. Retailers are already seeing the benefit of blockchain technologies through the rise of cryptocurrencies. Microsoft and Subway have started to offer payment by bitcoin. But they're just two examples, there are many more ways that blockchain can add value and security to your business – right now. Blockchain can help you reduce costs and improve certain processes, for example, better product and customer data tracking and security, and reducing the risks of fraud or product counterfeiting. Blockchain technology is fast becoming integrated into business processes in its customized form for enterprises, commonly called Distributed Ledger Technology (DLT). It's used to do things like verify transactions and control deliveries. More organizations are joining the blockchain economy: According to Gartner's June 2019 CIO Agenda: Blockchain's Emergency Depends on Use Cases (report available to Gartner subscribers), in the 2019 Gartner CIO survey, 57 percent of typical performing enterprises plan to start deploying blockchain services within the next one to three years; it's even greater (64 percent) in developing economies. Further, according to Gartner, financial services, services and transportation are the industries who have already deployed or will deploy blockchain services in the next twelve months. But beyond financial services and cryptocurrency exchanges, how else could blockchain benefit business? Blockchain for logistics and manufacturing Blockchain is a popular topic for many new international research and development collaborations. Many of our customers at Kaspersky are now part of bigger international blockchain projects, with companies from the same industries in Germany, China and USA, for example, working on the same project together. One area of international collaboration is in logistics. Blockchain technologies can help track an item in a supply chain, for example, to verify the authenticity of a product to prevent fake medicines entering a pharmaceutical supply chain, or track its movement to ensure vital supplies in a humanitarian emergency safely reach their destination. It's already being used today: Walmart is tracking the movement and origins of pork in China. At the other end of the luxury product scale, De Beers is developing a diamond-tracking platform to improve supply chain transparency and traceability. Verifying authenticity and ownership In our Innovation Hub at Kaspersky, we support several companies that are using blockchain in ingenious ways relating to verification. Verisium is working with manufacturers to verify the authenticity of products using NFC (near-field communications) tags embedded in products that can be scanned by the customer's mobile phone to activate exclusive content and services. It's a great way to reward your most loyal or high-value customers. In all types of manufacturing, blockchain will have a big impact on how customers interact with vendors to verify what they are buying and where it is in transit – benefiting any purchase from specialist car parts to ordering a tailor-made suit. Polys, another Innovation Hub start-up, is using blockchain to allow people to securely vote online while using authentication to check if they're entitled to vote. This could revolutionize the exchange of information between organizations and their stakeholders and customers, and potentially shape new forms of digital democracy between citizens and governments. This year, they've already achieved the biggest voter turnout in the world using blockchain; more than 80,000 citizens cast a digital vote to support their preferred municipal funding project in the Volgograd region in South Russia. Important transactions for goods could also become more secure. For example, when people buy and sell expensive artwork, they don't always exchange the objects, just the certificate proving the authenticity of its ownership. Blockchain can secure this valuable information by creating a token for the object that you own. You can then assign the ownership and rights to another person. Investing in new technologies always carries a risk, but blockchain technology itself can be as safe as houses. In Malta – the country dubbed "blockchain island" thanks to its tech-friendly policies – ownership rights for properties are stored in a blockchain registry. Blockchain can make your data immutable Blockchain is a perfect tool to support data immunity through the distributed registry of data. There's nothing particularly cool about the blockchain itself – it's basically just distributed data storage. But what's really interesting is how the data is synchronized, so all nodes have the same data-testing mechanism. This ensures it stays intact. It's a literal chain: every transaction is linked to the previous one, and the next one. Whoever is working in the blockchain ecosystem – whether they read or feed the data – their changes are recorded. This helps to distribute, ensure consistency and makes the data immutable – virtually impossible to hack, manipulate or steal. Although blockchain guarantees a secure process, it can never guarantee the security of your decentralized applications. And the risk of mistakes made by people and logic errors in the blockchain code can still cause vulnerabilities that can lead to an attack. How to solve the security risks of blockchain Although it's a new technology, the security issues remain the same for blockchain as other IT systems. The use of DLTs for enterprises combines the risks of being a large business with the vulnerabilities of a blockchain. For example, logic errors and bugs in smart contracts can lead to vulnerabilities in the blockchain process, and DDoS (denial of service) attacks could bring down the DLT's infrastructure by consuming all of its processing resources. Organizations should concentrate on ensuring their own infrastructure is safe and secure, so you're well protected if others with weaker security join the blockchain. Implementing this technology requires careful protection. Blockchain technology itself is usually the strongest link in the chain: the weakest ones are every system that the company builds on top of the blockchain; these must be protected. The consequences of a successful attack can also be far more serious for blockchain that with other data systems; if attackers decide to target an enterprise blockchain project, huge quantities of data could be exposed. Disruptions to supplies, manufacturing or maintenance can threaten trading, as well as consumer convenience and safety. You will still need to invest in cybersecurity services like security audits, penetration testing and an incident response strategy. It will provide protection for decentralized applications and enterprise blockchain infrastructure. In DLT, each endpoint should be secured against breaches, while applications and smart contracts are thoroughly analyzed for vulnerabilities. Don't worry, it's not as complex or costly as it may sound – some elements like the blockchain application security assessment are a one-off charge, tiny in comparison with the overall investment in new technologies. And, of course, the high costs of what a data breach could cost your business and reputation, particularly if legislation like GDPR applies to you. The power of disruption Blockchain has the potential to change how people interact with businesses and improve the customer experience, making exchanges of information and services frictionless and transparent. In the future, I think fewer companies will emphasize they're using blockchain, it will simply become a hygiene factor as a more secure way of doing business rather than a novel technology. There's no denying it: blockchain is a disruptor. But disruptive technologies help us review and improve what's gone before, and create new-use cases and benefits for the future. There are already many positive opportunities for businesses. Now's the time to make your mark and join the blockchain economy.
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About Secure Futures

Secure Futures magazine is your go-to business guide for opinions, trends and insight into the world of technology and cybersecurity. We help your business to bring on the future. Brought to you by Kaspersky, the global cybersecurity experts.

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