When a man was fired from his job in Minneapolis, Minn., last May, he inadvertently touched off a boom in Silicon Valley.
Gregg Steinhafel, then a 35-year veteran of Target and its CEO, was shown the door after hackers infiltrated the retailer’s computer systems, stealing 70 million shoppers’ information and 40 million credit and debit card numbers. It turned out the hack might have been prevented, had the company not ignored warnings from its own security systems.
It happened again in December, when Amy Pascal, one of the most powerful women in Hollywood, was fired from her job heading up Sony Pictures after hackers exposed thousands of financial documents and emails revealing the film studio’s inner secrets. The hack captured the world’s attention and elicited criticism from customers, industry leaders and even the president of the United States.
Pascal’s and Steinhafel’s exits sent shockwaves through corporate America. The message was clear: Top executives will be held responsible for their companies’ cybersecurity failings.
The result, venture capitalists say, has been a boom for cybersecurity startups. In ways that previous attacks on consumers never did, the firings have sparked a scramble for new security technology by companies desperate to head off the next costly, embarrassing cyberattack. And venture capitalists are responding, pouring unprecedented billions into a dizzying array of young companies and their, largely, untested products.