By Katharine Carlon
Aaron Warner learned a valuable lesson from his former boss, Integrated DNA Technologies Founder Dr. Joseph Walder: You can make any company look like it’s on the verge of becoming the next big thing. Or you can build a company that is the next big thing.
It’s advice Mr. Warner took to heart when founding Coralville-based cybersecurity firm ProCircular, this year’s Fastest Growing Company in the Corridor. Making its debut appearance on the list with 358.46% growth over a two-year period, ProCircular has expanded from a handful of employees and contractors in 2016 to a staff of nearly 30, serving clients from small businesses to multi-billion-dollar corporations in Iowa, Ohio and Minnesota.
ProCircular is “thriving, not just surviving,” despite a pandemic that has crippled the economy, with 2020 revenue up about 15% over the same time last year. And with the crisis only exacerbating threat levels, cybersecurity is one of the few areas where businesses can’t afford to skimp.
Mr. Warner hopes to take his company national within the next five to 10 years, and has ambitious plans to introduce a array of new products and services to meet the increasingly complex challenge of keeping sensitive data secure.
“But this isn’t just about money,” said Mr. Warner, who set out to “do good and do it better” when he left a 22-year career at IDT. “I’m not a serial entrepreneur. I honestly wanted to build the place that I wanted to work.”
ProCircular has eschewed outside venture capital and three-year exit plans in favor of a scrappy, bootstrap approach focused on the long-term.
“We’re not a company that’s been built to be sold,” Mr. Warner said, adding that ProCircular’s growth has been fueled by sinking profits back into the company. That has allowed them to avoid having to answer to “masters of venture capital or private equity,” although he admits “raising $30 million and kind of cruising with that” is sometimes tempting.
“The stakes are higher in terms of making mistakes, which is why we try to only make them once,” he added. “There’s a certain beauty to that.”
Trading on “security, privacy and trust,” ProCircular enables organizations to confidently manage their cybersecurity risk, said Mr. Warner, whether that means monitoring systems, meeting state and federal compliance challenges or, in the worst case scenario, responding to breaches.
“The really sexy stuff is we get paid to hack banks and hospitals and organizations … and we’re very, very good at it,” he said, adding that outmaneuvering bad guys is the flashiest, though by no means the bulk of the work that it does for clients in fields like finance, health care and education.
“Things change so quickly in our industry, whether it’s a new form of ransomware, whether it’s a new set of threat actors that come on the scene, whether there are new regulatory requirements because every state is trying to address cyber security risk, and each of them is doing it differently,” he added. “Keeping track of all those things, you have to really enjoy change and agility, and being able to keep an open mind as well as being able to handle a certain amount of pressure, especially in incident response.”
Mr. Warner, whose career at IDT culminated in the role of chief information officer, said his inspiration for ProCircular came as he shopped around for a company to support IDT’s cybersecurity needs. Large firms with deep expertise were prohibitively expensive, less expensive IT companies didn’t offer the degree of specialization he was looking for and consulting firms offered cybersecurity only as a tacked-on product.
Unable to find “that boutique, built-from-the-ground-up cybersecurity firm that could support medium-sized businesses,” Mr. Warner created his own, along with about 10 employees and contractors. ProCircular’s launch – just ahead of the 2016 elections, rife with Russian cyber meddling from hacked emails to troll farms – was fortuitous.
“File that under ‘I’d rather be lucky than smart,’” he said. “The election was the first time that everyone had to think about cybersecurity. It impacted everybody in the country at the same time and that was that was kind of a turning point.”
Since then, high-profile data breaches have become regular occurrences, and companies both large and small have accepted investments in cybersecurity as a cost of doing business. But that was not the case in ProCircular’s earliest days.
“The startup thing is not for the faint-hearted – it is an incredible challenge,” said Mr. Warner, who credits going through the evaluation process for a $250,000 VentureNet loan early in the company’s history for helping ProCircular find its marketing legs. “It really nailed down what it was that we were going to offer and what we weren’t, and to whom. It made all the difference in the world.”
Mr. Warner recalls arriving with detailed forecasting spreadsheets VentureNet staff praised as some of the best financial work they had ever seen, then being told, “Now knock it off. Quit fooling around with Excel, go talk to 200 customers, and then come back and see if your beautiful fancy forecasting math actually holds true.”
The experience helped ProCircular determine what its market looked like and what it could uniquely deliver – an exercise that has served it well in a cybersecurity marketplace that has grown more competitive every year. Strong word of mouth and reaching what Mr. Warner called “critical mass” have been integral in gaining the trust – and the business – of progressively larger companies. It has also helped ProCircular assemble one of the best teams in the business.
“We started with our core values. Culture is integral to what we do,” he said. “We started from day one talking as much or more about the kind of company we wanted to work for as we did the technical parts of the products and services that we offer.”
Mr. Warner credits those foundations for ProCircular’s ability to recruit and retain top quality staff despite “absolutely crazy” competition for top-flight cybersecurity talent. The company aims to promote from within and keep its employees happy – and in Iowa. Recently graduated interns have gone on to in-house positions earning $80,000-$90,000 within 12-18 months. Meanwhile, the company offers “a really cool set of benefits,” an aggressive paid time off schedule, a commitment to a healthy work-life balance and happily embraces its quirkiness. Star Wars Day is an official company holiday, for instance, with “May the 4th be with you” jokes aplenty.
In turn, ProCircular employees work hard, “eating, sleeping and breathing this stuff” to support clients properly.
“If you’re not keeping up with it every day, it can get past you pretty quickly,” Mr. Warner said. “But everybody in our organization is passionate about the work that we do. It’s not like most of us looked at different career possibilities and said, you know, ‘cybersecurity.’ It kind of selected us.”
With cyber risks constantly evolving and changing, that kind of dedication is necessary. Mr. Warner said threats have become more advanced and increasingly automated. The use of ransomware has “exploded,” with the average ransom payment jumping from $44,000 to $80,000 in the last year.
In the year ahead, ProCircular plans to roll out a slew of new services, including a 24/7 security operations center and expanded Governance, Risk and Compliance (GRC) resources. It has also recently hired a new chief information security officer, and is building out its engineering bench with ex-military cyber defense experts.
“We’ll also be growing sales in the last quarter of the year with some really unique products … that have never been offered in cybersecurity before,” Mr. Warner said, adding he was not yet at liberty to discuss those products, developed with resources from Iowa’s public universities. “I love R&D, so it’s been wonderful to get to the company to a point where we can really start to invest in research.” CBJ