The Grifting Continues

The cybersecurity firm IronNet, founded by former senior US intelligence officials, has shut down with a general odor of corruption.

Sounds to me like they thought that they could use their professional connections to sell nothing to the government.

The future was once dazzling for IronNet.

Founded by a former director of the National Security Agency and stacked with elite members of the U.S. intelligence establishment, IronNet promised it was going to revolutionize the way governments and corporations combat cyberattacks.

That former director would be General Keith Alexander.

Its pitch — combining the prowess of ex-government hackers with cutting-edge software – was initially a hit. Shortly after going public in 2021, the company’s value shot past $3 billion.

I cannot imagine that their special sauce was anything beyond the potential to hire government employees after their retire.

I'm sure that Alexander made a lot of money after the IPO.

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Last September the never-profitable company announced it was shutting down and firing its employees after running out of money, providing yet another example of a tech firm that faltered after failing to deliver on overhyped promises.

The firm’s crash has left behind a trail of bitter investors and former employees who remain angry at the company and believe it misled them about its financial health.

IronNet’s rise and fall also raises questions about the judgment of its well-credentialed leaders, a who’s who of the national security establishment. National security experts, former employees and analysts told The Associated Press that the firm collapsed, in part, because it engaged in questionable business practices, produced subpar products and services, and entered into associations that could have left the firm vulnerable to meddling by the Kremlin.

“I’m honestly ashamed that I was ever an executive at that company,” said Mark Berly, a former IronNet vice president. He said the company’s top leaders cultivated a culture of deceit “just like Theranos,” the once highly touted blood-testing firm that became a symbol of corporate fraud.

Remember how I noted that generals are in bed with defense contractors because of an implicit promise of a comfortable sinecure on retirement.

This is just a particularly egregious example of this.

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IronNet’s founder and former CEO Keith Alexander is a West Point graduate who retired as a four-star Army general and was once one of the most powerful figures in U.S. intelligence. He oversaw an unprecedented expansion of the NSA’s digital spying around the world when he led the U.S.’s largest intelligence agency for nearly a decade.

Alexander, who retired from the government in 2014, remains a prominent voice on cybersecurity and intelligence matters and sits on the board of the tech giant Amazon. Alexander did not respond to requests for comment.

IronNet’s board has included Mike McConnell, a former director of both the NSA and national intelligence; Jack Keane, a retired four-star general and Army vice chief of staff, and Mike Rogers, the former Republican chairman of the House Intelligence Committee who is running for the U.S. Senate in Michigan. One of IronNet’s first presidents and co-founders was Matt Olsen, who left the company in 2018 and leads the Justice Department’s National Security Division.

Alexander’s reputation and the company’s all-star lineup ensured IronNet stood out in a competitive market as it sought contracts in the finance and energy sectors, as well as with the U.S. government and others in Asia and the Middle East.

Translation to that last paragraph:  They were the selling personal and professional connections of senior executives and board members, not any unique knowledge of cybersecurity threats or cybersecurity strategies.

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Top officials were prohibited from unloading their stock for several months, but Alexander was allowed to sell a small amount of his shares. He made about $5 million in early stock sales and bought a Florida mansion worth the same amount.

Well, that beats working for a living.

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It did not take long for IronNet’s promises to slam into a tough reality as it failed to land large deals and meet revenue projections. Its products simply didn’t live up to the hype, according to former employees, experts and analysts.

Stiennon, the cybersecurity investing expert, said IronNet’s ideas about gathering threat data from multiple clients were not unique and the company’s biggest draw was Alexander’s “aura” as a former NSA director.

The AP interviewed several former IronNet employees who said the company hired well-qualified technicians to design products that showed promise, but executives did not invest the time or resources to fully develop the technology.

Of course they didn't.  This was about insider access, not technology.