Why We Invested: SpecTrust
Online businesses lose over $50B each year to fraudsters, scammers and identity thieves, even though they spend three times that amount maintaining and updating their defenses. Attackers have no-code tools and click-to-deploy networks that put them at an unfair advantage against busy risk engineering teams.
The founders at SpecTrust have worked side-by-side with the hidden heroes fighting cybercrime for the better part of the last decade and they knew there was a better solution. The SpecTrust team built a no-code risk defense layer that sits between a website or app and its users to make sure risk and fraud teams have what they need to spot bad actors.
SpecTrust empowers cybercrime fighters to instantly assess high-risk behavior, orchestrate automated assessments and mitigate cybercrime threats before they become losses. Because users never write a line of code, they can respond to evolving attack threats in minutes and accelerate delivery of risk defense roadmaps from years to weeks — all while freeing up their engineers to focus on growth.
The market for fraud prevention has grown significantly with the shift to online commerce and as attackers have improved their offensive capabilities. SpecTrust is led by a fantastic team of founders with a strong vision, and we’re thrilled to participate in their series seed funding.
Below is a short Q&A with SpecTrust’s co-founder and CEO, Nate Kharrl.
1. What inspired you to found SpecTrust?
It all started in 2014 when I was working for Akamai Technologies, in their cloud security group. I was handling a lot of the ground-level GTM with big banks. While there, I got pulled into a project to help one of our largest customers deploy a fraud detection service that they were having trouble getting off the ground.
The idea was for the deployment model to deploy not on the application, but on the traffic going in and out of the application. I built the solution and only got about half of what we ultimately wanted, but people were ecstatic, and at that point I knew we were on to something.
I then joined ThreatMetrix and eventually ended up leading their customer engagement team. I learned so much about the fraud industry and all of the issues plaguing people and companies who were trying to fight cybercrime.
I had a huge team of people who were reliant on busy engineers at customer sites to implement fraud detection solutions and provide data to tune the accuracy of their models, which created long delays. It took months for customers to deploy and many never deployed at all.
I saw that fraud defenders were struggling pretty much everywhere. Companies were losing millions of dollars per month. They had all the data they needed to stop cybercrime, but it was scattered over many different fraud vendors and not aligned with their mitigation systems. It was a mess.
2. What is the core problem that you’re solving?
In any organization, there are teams, systems and data scattered everywhere. Checkpoints and applications to fight fraud are deployed all over the place, and there is no one system tying all of this together. It’s so easy to get wrong. Most people just solve issues as they come up and you end up with a giant frankensolution.
New attacks are successful every time they show up because they aren’t tripping any of the data you’re looking at. So, you have to go find more data, which turns into a data project, and then you multiply that out by teams, strategies and policies — and all of a sudden it’s enormous and uncontrollable. We could only tackle the most urgent issues, and there was tons of loss happening in the meantime.
My co-founders and I sat down together and said this is a huge and near-universal problem that we need to fix. We could see that we needed a unifying bus to bring everything together and build a product to fight modern cybercrime.
In January of 2020, we took all the things I was originally asked for way back in 2014 and put together a prototype. It took about three weeks of building the prototype during my spare time until it worked. By the middle of July, we had our core infrastructure built and the processing speed down to milliseconds. We’ve been talking to customers and building product ever since.
What we built unifies all the people, data and technology that a business needs to recognize good customers, protect their experience and accurately find cybercriminals — no matter how they try to shift and twist out of your view.
3. How do you help your team succeed?
I’m very much a people person. I want to know what type of problem solving gives a person energy, and, as a team, embrace that it varies from person to person and that’s okay. As a leader, I want to align people with their superpowers so they’re doing work that energizes them. When I can’t, it’s important to acknowledge their efforts in pushing through the mismatch.
Something I ask every person I interview is: “What do you want? What drives happiness for you?” The talented people on our team could make money at a lot of other places. It’s important for me to really understand what moves the needle for them personally and to be a part of how they achieve it.
4. What tools and tactics do you use to get unstuck when you’re struggling with a problem?
The answer for me is definitely people. I lean on a rowdy crew of misfits who I’ve picked up over the years — I would be useless without their support and guidance.
My people give me both the confidence and the constraints I need to be fast and effective. While working through challenging problems on my own, I only have my own perspective to rely on. Having a diverse network of people around me who I trust helps me recognize better solutions and see around corners.
5. What are you most excited about right now?
It’s hard to say anything except for the end of the pandemic. I never thought I would be looking forward to business travel, packed meeting rooms and work dinners, but that aspect of building relationships is something I’ve really come to value. Technology is great, but it doesn’t offset the piece of humanity that comes from meeting person-to-person.
There are a lot of people who joined us on this crazy journey who I have yet to meet in person, and they’ve already become these great cultural and spiritual anchors of everything we’re doing. I’m really looking forward to spending time with them.