When considering technology startups in Columbus, it’s apparent that most adhere to industries that are prominent in Central Ohio — biotech, healthcare, education. With the absence of big-name cyber security companies in the area, that sector has remained relatively small. Even so, activity around the industry is growing because of the unique opportunities Columbus offers.
Compared to cities around the country, like Atlanta, Washington D.C., and San Francisco, cyber security startups in Columbus tend to be less specialized, creating products and services that can be used by the city’s large corporates. Nationwide, Huntington, Cardinal Health, L Brands, AEP, etc., all have security needs, and are investing in funds for startups that meet them. But, for companies like Panopticon, which caters specifically to the gaming industry by protecting publishers from in-game attacks, the benefits in starting up in Columbus involve less funding, but more talent, low costs, and, if needed, room to fail.
Panopticon was founded in 2013 by Matthew Cooke, Amy Szabo, and Anthony Peluso. Although they’re completely customer-funded now, they did receive a share of angel funding, as well as some startup help from the cyber security experts at 10Xelerator, a local startup accelerator that provided programs aimed at scaling up a small company. After leaving the program, the area talent made its own contribution by filling somewhat hated jobs with people who love doing them.
“The university is cranking them out every single year — really, really sharp people, who, some of them, realize that it’s fun to live in Columbus,” said Cooke. “It’s not very expensive, it’s not a hassle to live here. And so, people think, ‘You know, this would be a great place to like, start a family, and not have to live in an apartment until I’m like, 45.’”
That low cost of operation made all the difference to Panopticon. Again, being a specialized cyber security company, they didn’t have the constant influx of funding and interest from larger corporations. They don’t sell their products and services to companies like L Brands or Nationwide. They sell to companies in California, New York, on the east coast and in Europe. However, although what they sell appeals to faraway publishers, the protection they offer covers game users everywhere, including Columbus.
The term “gamer” has broadened to include people engaged in a world of gaming that is new to the last decade. Where 30 or 40 percent of people once identified as gamers, with the presence of online and app gaming, that number has jumped to 90 percent, translating to about 750,000 people locally. It’s a $100 billion industry. All those people, and all of those dollars, are vulnerable.
“This concept that a virtual item has real money value is actually sort of the reason that video games are under attack right now, because some of these assets can be worth hundreds or thousands of dollars individually, and they have very little in the way of security around them, because they’re not a bank, they’re not a stock, they’re not something where there’s a federal law somewhere that says there’s a certain minimum standard of security that needs to apply,” said Cooke, who’s accumulated years of financial security experience.
That being said, financial security and gaming security look almost identical. Using behavioral analytics, Panopticon develops mathematical patterns that describe how a normal user would go through the app or online game. When something fishy is happening, that pattern looks different. If one user’s behavior changes one day, it’s an indication that the account has been hacked, and the company can be notified early on.
Currently, gaming companies are losing up to 40 percent of their revenue to this, making Panopticon an essential player in the gaming realm. As their company grows, and they start working with companies that have different risks and needs, Cooke said a certain amount of flexibility is needed. Columbus, fortunately, provides an environment that allows them to “pivot on a dime.”
“I can definitely say that if we tried to do this on one of the coasts, we would probably be out of business right now,” Cooke said. “We could not have hung in there long enough to be able to get customers and to do what we needed to do in the way that it needed to get done. We would have had to rush, and the chances of us making a fatal mistake would have been much, much higher, and it probably would have killed us.”
He added, “You have the room to experiment here in a way that you don’t in other places.”
Our new technology series is presented by our partners at TCETRA.
TCETRA is a software development company based in Dublin, Ohio. Since 2007, the company has been focused on serving the prepaid wireless industry through the development of specific business tools, software, and applications. Our team is made up of talented technical and creative professionals dedicated to delivering innovative solutions to complex problems and helping grow the technology community in Columbus and the Midwest.