Garry Kondakov, chief business officer, Group-IB
Garry Kondakov, chief business officer, Group-IB

I recently visited Latin America, where our partners told me the story of a local retailer who had continuous problems with breaches, leaks and thefts. Unfortunately, these attacks have already become old news. The thing that really surprised me was that the company in question chose their solution on the other side of the world, with a small Asian security company. Why - with the US close by and large-scale security corporations, innovative technology, well-established processes for efficient customer service and many other things right around the corner?

It's not about tensions with the US administration or conspiracy theories, but about the fact that industry leaders weren't able to offer a “magic pill” that could cure all the symptoms of hacking attacks. 

We get used to the idea that large corporations have capacity to solve any problem. The reality, however, was that this particular case was too specific, and lay completely outside of the field of experience that the big company had. So, they believed it was easier for them to skip this opportunity rather that engage and try to find a solution, despite the fact that the company in question was large and promising from a financial point of view. Why so? 

The reason is quite simple – most corporations have become hostages of their own internal processes, procedures and corporate mechanisms. They have lost the flexibility necessary to adapt to market trends and entered the path that ultimately will lead them to the lost competition.

I've worked for many companies, big and small. Taking executive positions at Kaspersky Lab, the company whose brand awareness in some countries is about the same as the one of AK-47, for more than 14 years, one of my primary responsibilities was client communications. 

At some point I caught myself thinking that universal solutions start to lose their leadership positions. They don't work as effectively as they used to do. More and more customers need customised solutions that meet their specific business needs. Moreover, they are ready to pay not only for the efficiency, but for convenience.

Our fast moving and changing business world is not about competition of products and services any longer, but about specific competition and strategy. Those who succeed are the ones who can promptly react to changes in the market and customers' needs. Corporations with their fine-tuned procedures and business processes start to lose their positions, while small companies able to take fast decisions, have a good chance to win their market share.

Here are some facts and figures to confirm the theory that these are start-ups who build the market and drive global economy - 7 million of 10.9 million new jobs that appeared in the United States over the course of the past five years were created by startups and small enterprises.

More examples: Hyatt Hotel chain has 20 times more employees than Airbnb start-up, however, their revenue is expected to be almost the same in coming years. Rovio with their Angry Birds global empire still have around 500 employees.

This is due to the fact that small businesses can adapt their products to specific demands. They are friendly and personable in their replies to customers, their standards can be adjusted, and changes to their functionality do not require exhaustive negotiations between company branches. They are agile, persistent, aggressive, innovative and ready to take risk. By introducing new ideas, technology, and business models, small companies change the market structure.

Corporate giants with complicated management structures are often not able to catch up with the situation. There is even an alleged story: Head of Nokia, when leaving his office, exclaimed that he could no longer manage a company where managers adjust their presentations longer, than some Asian companies took to conquer the market.

Extremes, however, can be damaging for the business - Fab.com is considered one of the biggest start-up failures ever, once valued at about $1 billion (£792.5 million), the company allegedly was sold for $15 million (£11.8 million). 

My current role is to balance the corporate, market and customer experience I've accumulated, with the new ideas, approaches, and technologies the company promotes. Small companies should not aspire to become giant corporations. It is agility that gives them advantage. Structure is good only until it leads to inflexibility.

We live in a constantly evolving environment. Sometimes it changes even more rapidly than we realise. The world is moving ahead inexorably, but everything will turn out fairly in the end. A recent example:

Uber's position as a market behemoth has begun to decline and a few smaller cab aggregators have appeared in national markets; this change can also be seen at many other companies in the service sector. I am sure that only a new generation of entrepreneurs is ready to face actual challenges: they can react more quickly, compete more fiercely, develop faster, and achieve maximum customer satisfaction. Only they can make our lives interesting, diverse and, what is most important for IT security, safe.

Contributed by Garry Kondakov, chief business officer, Group-IB

*Note: The views expressed in this blog are those of the author and do not necessarily reflect the views of SC Media or Haymarket Media.