Author: Thaddeus Preston (Nick Waye)

There’s a slow and insidious weapon-ization of cyberspace happening that we all need to become aware of. In my reading this weekend I came across a special report by Reuters about alleged Chinese espionage. The report went into some detailed examples as to how these Chinese-based cyber-spies infiltrate government and corporate computer systems. Why? Primarily for strategic and economic advantage. But this post isn’t to blame the big bad boogie man that is China. It’s to bring to everyone’s attention that the cooperative and collaborative era of the web is over. Between ‘hacktivist’ like Anonymous, Russian Hackers, Chinese hackers, Terrorists and Government intelligence agencies the tools of the web are being co-opted and weaponized toward the same ends as real-world tools of war like bombs and bullets.

I wrote about this (in a sensational fashion) last year when a mini skirmish erupted between the protectors of Wikileaks (Anonymous) and the opposing forces of Visa, Amazon and Paypal, all of whom had publicly distanced themselves from Wikileaks due to U.S. Government pressure, went to ‘war’ in a manner of speaking. Google is under constant threat and attack by Chinese hackers (it is still unclear if these are Government sponsored attacks). We have even witness the systematic implementation of cyber warfare doctrine when the conflict between Georgia and Russia broke out in 2008. I could name off 10 more instances this year alone where attacks and breaches on information infrastructure have occurred. Now more than every security must become the top priority of firms and governments. More of our vital physical infrastructure will connect to a network of some kind in the coming decades, the so-called Smart Grid. This exposes us to increasing threats and it takes the cool factor of the web and turns it against us. Use of cyber attacks to cripple a potential enemies capacity to wage war, execute industrial espionage and deny the free exchange of information is coming.

Listening to this weeks “Fourcast” podcast on TWiT, one of the guests had a prediction about cyber-warfare in next 100 years (at the 19:00 minute mark). His prediction: that in the next 100 years proxy wars will be fought entirely in software. Similar to the Cold War when the US and the USSR waged war through proxies like Cuba, Vietnam, China and the Taliban in Afghanistan. These future proxies won’t necessarily be countries but software tools and websites that provide vectors for attacks on our highly connected infrastructure. From financial systems to energy, water treatment plants to hospitals. Large Superpowers like the US, China and Europe would have plausible deniability for harm inflected through one of these proxies, think Stuxnet. The USAF has already drawn up plans to build its own botnets. This prediction is not out of the realm of possibility nor will it take 100 years to happen. Social networks are also increasingly becoming a battleground. Not only could you deny an advisary the infrastructure for which to wage war, but create negative sentiment via bot social network accounts, “astroturfing”, to sew domestic upheaval.

So as my latest idea of the week maybe someone should start a new kind of security company the specializes in offensive and defensive information operations. Create tools to deny, extract and perform inception on information flows. Democratize the access to the weapons of this new wild-west era of the web, like an anti-gun control methodology. I know that sounds evil, but in light of what will enviably come why not?

It’s been a while since I’ve written anything of consequence, but this past week has inspired me to spew more of my thoughts and rants on virtual paper. I have began the process of networking among the entrepreneurs here in the land of enchantment.

This week I attend a conference on starting a high-tech business in New Mexico with a local tech incubator, Technology Ventures Corporation (TVC). They run a series of seminars called Center for Commercialization & Entrepreneurial Training (CCET). Started in 1993, TVC was an effort to commercialize technology developed in our national labs (Sandia and Los Alamos). Lockheed Martin runs Sandia National Laboratories here in Albuquerque and in Livermore, CA. They went fishing for new business opportunies within the Lab hence TVC was born. TVC provides services to start-ups wishing to commercialize their technologies into products. They will analyze business plans, mentor and introduce you to venture capitalist if your product or idea proves worthy of an introduction.

This weeks seminar was about writing a business plan. One of the Project Directors Suzanne Roberts, gave a great presentation. I’ve spoken with her one-on-one before and she seems extremely knowledgeable.

One of the speakers that got me most excited was John Chavez, President of the New Mexico Angels investment group. His presentation on the Venture Capital industry from an angels perspective was eye-opening. In his view the conventional VC model is broken. It is much too focus on 30x to 10x returns on its portfolio. So VC’s are shifting their investing into later stage funding rounds of a venture. Most of their portfolios are filled with dogs that the fund is force to continue to finance. That leaves little money for new ventures. In 2007, 258,200 angels pumped $26 billion into 57,120 U.S. companies. Now this figure is pre-recession however, it does show where lots of money resides for early stage ventures.

And what are regional Angels and VCs looking to invest in? Mr. Chavez’s group is looking for companies doing software, database storage and retrieval, as well as early stage medical device and drug makers. You would be surprised how much of this stuff happens out here in the desert. The labs here specialize in the material sciences and supercomputing to support the nuclear weapons stockpile security mission. That produces lots of data and new methods to store, retrieve and process it.

There is also lots of “Green” tech that starts in our labs, however these are usually too capital intensive so they often require “Big” VC funding combined with government grant money to scale. Angels, at least out here, don’t go there. New Mexico Angels typically invest during a seed round at no more than $500,000. The New Mexico Angels are having a Angel Bootcamp on April 19th that I’ ll be attending. There I hope to do some good old fashion networking to see if I can highlight some innovative New Mexico start-ups.