Black Hat First Day - Market Gaps and Cultural Shifts
06 August 2025 - A Weekly Publication by New North Ventures
First Impressions from the Show Floor
Black Hat 2025 delivers on its reputation as a world-class cybersecurity event, with impressive scale and technical depth that sets it apart from typical industry conferences. The practitioner focus generates genuine insights rather than surface-level overviews, making it valuable for investors seeking to understand where the cybersecurity market is heading.
Three themes from the opening day sessions reveal significant shifts in how the industry approaches security challenges and market opportunities.
Rethinking Security Economics
The most compelling talk was "Security Below the Poverty Line," which addressed a fundamental market failure in cybersecurity. The core insight: many startups and SMBs simply cannot afford the security solutions that regulations and best practices mandate. This isn't just about budget constraints - it's about fundamental misalignment between how security tools are designed and deployed.
The speaker emphasized that security tools are typically built to gold standard specifications, then modified downward for smaller companies. This approach fails because it treats SMB security as a compromised version of enterprise security rather than a distinct market with different needs. The better approach would be building security solutions explicitly for SMBs from the ground up - "good enough" security that matches the actual risk profile and operational capacity of smaller organizations. This critical solution gap presents a great opportunity for innovators who are looking to build new and creative solutions in what may seem like a crowded space.
Equally important was the discussion around ecosystem responsibility. Fortune 500 companies should invest in improving their smaller vendors' security capabilities, both as supply chain risk mitigation and industry stewardship. This creates interesting investment opportunities for solutions that can scale security capabilities across company size tiers effectively.
Compliance as Programming, Not Burden
Another key theme was cultural transformation in how organizations approach compliance. Rather than viewing compliance as external requirements imposed on security programs, the most effective organizations treat compliance as a natural outgrowth of good security practices. When security programs are well-designed and systematically implemented, compliance becomes an automatic byproduct rather than additional overhead.
This philosophical shift has practical implications for both security vendors and their customers. Tools that integrate compliance reporting and evidence collection into core security workflows rather than treating them as separate functions should see better adoption and customer satisfaction.
Inferring the Inference
The session on "Vibe Coding" introduced a concept that deserves more attention: "infer the inference." The idea is that LLMs and AI systems generate enormous amounts of metadata about what society is actually interested in, searching for, and concerned about. Much like Google Search data provides insights into collective behavior and interests, LLM usage patterns could reveal valuable societal intelligence.
While this observation came up in a coding context, the implications extend far beyond software development. This type of meta-analysis could inform everything from threat detection to market research, though the speakers didn't delve into privacy or ethical considerations around analyzing such data.
Market Evolution
The cybersecurity industry remains in rapid evolution rather than settling into mature categories. The rise of AI and related development practices like "Vibe Coding" represent genuine paradigm shifts that will create new attack vectors and security challenges, not just incremental improvements to existing problems.
This continued evolution suggests opportunities in areas that address the SMB market gap, integrate AI security considerations from the ground up, and rethink traditional enterprise security models for modern development practices.
The technical depth and practical insights from the opening day establish Black Hat as essential go-to for understanding where cybersecurity innovation is heading and what market needs remain unaddressed.
How Capital Markets Can Revive the Defense Industrial Base
The timing on this National Interest piece about leveraging capital markets for defense manufacturing feels almost too perfect given the Black Hat discussions on market gaps. Finelli and Bonfili make a compelling case that America's capital market advantage - four times larger than China's - represents an untapped strategic asset for defense transformation.
What's particularly insightful is their focus on cost of capital mechanics rather than just throwing more government money at the problem. Tools like loan guarantees, off-take agreements, and direct lending can fundamentally change investment risk profiles for private capital. The MP Materials example they cite - where government financial backing attracted $500 million from Apple - shows how this approach creates multiplier effects.
The "Detachment 201" concept for Wall Street talent is intriguing too. If you can reserve Silicon Valley executives for military innovation, why not private equity dealmakers for defense financing structures? The authors understand that sustainable defense industrial base expansion requires making these investments attractive to private capital, not just mandating them through appropriations.
More links to explore:
Why Booz Allen’s CTO used generative AI to make a deepfake video of himself
Figma Is Largest VC-Backed American Tech Company IPO in Years
We are excited to report that Reality Defender has launched its groundbreaking public developer API and SDK, marking a pivotal moment in democratizing enterprise-grade deepfake detection for developers worldwide.
Additionally, the company introduced a free tier offering 50 detections per month, making the same multi-model detection capabilities that protect Fortune 500 companies accessible to any developer with just two lines of code. The API, which currently supports audio and image detection with video and other modalities coming soon, represents a fundamental shift in how the developer community can defend against digital deception. With deepfakes evolving from novelty to weapon, Reality Defender's context-aware detection goes beyond just faces, analyzing entire images holistically through proprietary techniques that marry multiple classification and detection approaches.
Reality Defender's platform excels by providing production-ready integration from day one, enabling developers to embed the same detection capabilities trusted by major institutions into applications ranging from OSINT research tools to trust and safety systems. This launch transforms Reality Defender from simply offering a platform to building a distributed defense network, where every developer integration becomes part of a global shield against AI deception — bringing us closer to a world where detecting deepfakes is as routine as filtering spam.
In this episode of the 'Securing Our Future' podcast, hosted by New North Ventures, Jeremy interviews Jennifer Ewbank, a former Deputy Director of the CIA for Digital Innovation, about her storied career, the importance of private-public partnerships, and navigating transitions from a high-stakes government role to the private sector. They delve into Jennifer's insights on the importance of purpose, the role of technology, and her personal journey post-retirement.
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