How SecurityScorecard Scaled from Zero to $140M ARR: 7 Growth Strategies Every Founder Should Copy

When Aleksandr Yampolskiy sketched his idea for SecurityScorecard on a napkin in 2014, he had zero customers, zero revenue, and just two people on the team. Today, that napkin sketch has transformed into a cybersecurity powerhouse serving 70% of the Fortune 100, generating $130-140 million in annual recurring revenue, and employing over 500 people worldwide. According to Crunchbase, the company has raised $292 million in funding and reached a $1 billion valuation.

In a recent keynote presentation at FounderPath’s NYC event, Yampolskiy revealed the exact strategies that fueled this remarkable growth. What makes SecurityScorecard’s story particularly compelling is how they pioneered an entirely new industry—quantifying cyber risk from the outside, similar to how credit scores work for financial risk.

But what is SecurityScorecard exactly? At its core, SecurityScorecard provides organizations with visibility into their own cybersecurity posture and that of their vendors, partners, and acquisition targets. The platform continuously monitors and rates companies on their security, helping businesses make informed decisions about cyber risk in an increasingly interconnected world. As TechCrunch reported, SecurityScorecard’s rating system even predicted the SolarWinds hack—the company had been scoring below industry average for quite some time before the breach occurred.

This deep dive into SecurityScorecard’s growth playbook reveals seven strategies that any founder can adapt, regardless of industry. From their revolutionary experimentation framework to their counterintuitive hiring practices, these insights offer a masterclass in scaling a B2B SaaS company. Watch the full keynote video here or follow along as we break down each strategy with actionable takeaways. You can also view the slide deck here.

Strategy #1: Focus on Expanding Existing Customers Before Chasing New Ones

When asked whether SecurityScorecard’s growth from $70 million to $130 million came from new customers or expanding existing accounts, Yampolskiy’s answer was revealing: “Big focus for us today is expanding new customers.” But he quickly clarified what he meant by “expanding new customers”—it’s about expanding the value delivered to existing customers.

With an average deal size of $30,000-40,000, SecurityScorecard discovered a powerful growth lever. “Simple math is that if we help 10% of our customer base better operationalize our product and really adopt it to manage their third parties and report to the board, we’re going to double our revenue without acquiring a single customer,” Yampolskiy explained. This aligns with Viking Growth’s B2B SaaS framework, which emphasizes that SaaS growth equals acquisition rate multiplied by average customer lifetime value.

This customer success strategy is particularly powerful for B2B SaaS companies. Instead of constantly chasing new logos, SecurityScorecard invested heavily in helping existing customers extract more value from their platform. This approach not only drives revenue growth but also improves retention and creates stronger customer advocates. For founders looking to implement similar strategies, consider reading FounderPath’s guide on maximizing customer lifetime value.

Key Takeaway for Founders:

Before investing heavily in new customer acquisition, audit your existing customer base. Are they using all your features? Could they benefit from additional seats or modules? A 10% improvement in customer utilization could have the same impact as doubling your customer base. As LinkedIn data shows, SecurityScorecard now serves over 25,000 organizations with their expanded product suite.

Strategy #2: Embrace the 5x5x5 Experimentation Framework

One of SecurityScorecard’s most powerful growth drivers is their commitment to rapid experimentation. Yampolskiy shared a framework adapted from a book by Mike Scher, one of their advisors: the 5x5x5 rule. Take 5 people, give them 5 days and $5,000 to test any hypothesis. This approach mirrors what CXL calls “experimentation-led GTM”, where companies that test and optimize systematically outperform those relying on assumptions.

This framework led to one of their biggest successes—and failures. On the failure side, Yampolskiy proudly shared how they spent millions of dollars and four months building a feature for insurance companies to analyze concentrated risk. Despite his confidence, it “did not add a single dollar of revenue.”

In stark contrast, a developer who “nobody asked to do it” created a simple widget over a weekend in 2016. This widget allowed anyone to enter a URL and receive a free security score report. The result? Over 880,000 companies have downloaded reports through this simple tool, making it one of their primary lead generation mechanisms for years. According to Latka’s data, SecurityScorecard now has 1,700 customers with 112 sales reps carrying quota.

“Most companies overvalue great ideas,” Yampolskiy emphasized. “Cheap, quick experimentation always beats great ideas.” This philosophy of rapid testing has been embedded across every team at SecurityScorecard—technology, product, marketing, and sales. The security industry particularly benefits from this approach, as cyber threats and data collection methods evolve rapidly, requiring constant innovation and adaptation.

Implementing the 5x5x5 Framework:

Research from Statsig shows that B2B companies often struggle with experimentation culture, but those that succeed see dramatic improvements:

1. When someone proposes a feature that will take two months, challenge them to test the hypothesis in five days
2. Use mockups, manual processes, or limited pilots to validate ideas
3. Celebrate small failures as learning opportunities
4. Scale only what shows clear traction

For more insights on building a culture of experimentation, check out FounderPath’s article on growth experimentation frameworks. Companies like Chargebee highlight that Mark Zuckerberg revealed Facebook runs about 10,000 different versions at any given time, emphasizing the power of constant testing.

Strategy #3: Pioneer a Category, Don’t Just Enter One

SecurityScorecard didn’t just enter the cybersecurity market—they created an entirely new category. As a former Chief Security Officer at Gilt Groupe with experience at Goldman Sachs, Oracle, and Microsoft, Yampolskiy identified a massive gap in the market. According to Fresh Code, a 2013 HBR study found that category creators make up 74% of incremental market cap growth and 53% of incremental revenue growth.

“You have absolutely no idea how secure your information is if you upload it to Dropbox or if you store code on GitHub or you send your paperwork to a firm,” he explained during his keynote. This insight led to SecurityScorecard pioneering a way to measure and quantify cyber security risk from the outside, similar to how credit scores work in finance.

What does SecurityScorecard do that makes it unique? Unlike traditional security tools that focus on internal vulnerabilities, SecurityScorecard analyzes companies from an external perspective, providing visibility into security posture without requiring any internal access. This approach resonated so strongly that 70% of the Fortune 100 now use SecurityScorecard as paying customers. As MX Moritz explains, category creation requires visionary thinking, clear differentiation, and leadership in setting standards.

Creating a new category requires several key elements, as outlined by Dave Bailey:

• Deep domain expertise: Yampolskiy’s background as a CISO was crucial
• A clear analogy: Comparing security scores to credit scores made the concept instantly understandable
• Patience and education: Building a new category means educating the market, which takes time
• Strong differentiation: When people ask “what makes Panorays different from SecurityScorecard?” the answer lies in SecurityScorecard’s pioneering approach to external risk assessment

Category Creation Lessons:

Lean Startup Co. notes that Netflix didn’t just compete with Blockbuster—they taught the world to think about media consumption completely differently. Similarly, SecurityScorecard taught the market to think about cybersecurity risk in a new way. The B2B Category Creators on Medium emphasize that only 0.5% of startups make it from seed to Series C, making category creation a critical differentiator.

Strategy #4: Master the Art of Capitalization Without Losing Control

One of the most transparent moments in Yampolskiy’s presentation came when discussing SecurityScorecard’s funding journey. From their initial $2 million seed round on a $6.2 million post-money valuation in 2014 to their current status with $200 million in cash, the company has been strategic about capitalization. PitchBook data confirms SecurityScorecard has raised $293 million from 30 investors, including Sequoia Capital, Intel Capital, and Google Ventures.

“The valuation matters a lot less than all the other things you negotiate,” Yampolskiy stressed. He emphasized maintaining a 1x liquidation preference, controlling board composition, and avoiding complex structures like participating preferences or coupon mechanisms. This advice echoes Waveup’s guidance that investors look for startups with built competitive moats and monopolized markets.

SecurityScorecard pricing may have evolved over the years, but their approach to funding remained consistent: never take crazy valuations with bad terms. “To this day, we have an even split between common and preferred shares on the board, along with independents,” he revealed. Tracxn reports that the company’s board includes 8 active members, including founders and independent directors.

Key capitalization insights:

• Avoid 50/50 founder splits: Yampolskiy started with 80% ownership because “somebody needs to be in charge”
• Maintain board control: Essential for long-term founder success
• Choose investors carefully: “The best investors won’t bother you… the worst investors will give you bad advice and create headaches”
• Negotiate refresh grants: If you’re performing well as a founder, negotiate additional equity grants like any executive hire would receive

Understanding risk factors in fundraising is crucial. As cyber security threats evolve, so do investor concerns about the industry. For guidance on navigating fundraising while maintaining control, explore FounderPath’s resources on founder-friendly funding.

Strategy #5: Build a Counterintuitive Hiring Strategy

Perhaps the most surprising revelation was SecurityScorecard’s approach to hiring. “My worst hires were polished executives from Amazon and Google,” Yampolskiy admitted. These executives would come in, tell him he was a terrible CEO, micromanage their teams, and ultimately fail to deliver results. This aligns with Parker Conrad’s philosophy at Rippling, who also prefers hiring people with “a chip on their shoulder.”

Instead, SecurityScorecard developed a sophisticated screening process focused on finding “up-and-comers with a chip on their shoulder.” The company even employs a psychologist who previously coached Steve Jobs and Larry Ellison to interview every VP-level hire and above, producing 40-page reports on candidates. SignalFire’s hiring guide emphasizes that anyone who joins your company will change the team dynamic, especially when you’re small and early-stage.

The security industry requires a unique blend of technical expertise and business acumen. SecurityScorecard careers are built on this philosophy of hiring curious, driven individuals rather than polished executives. This approach has resulted in remarkable retention, with many team members staying for five-plus years. According to PostHog’s hiring myths, the best predictor of success is actual work performance, not interview skills.

Hiring Framework Elements:

Underscore VC recommends looking for three A’s: Ability, Aptitude, and Attitude. SecurityScorecard’s approach incorporates all three:

1. Screen for curiosity: “If they’re not curious, they’re probably the wrong people”
2. Use professional assessment: Invest in deep psychological profiles for senior hires
3. Favor hunger over polish: Look for candidates with something to prove
4. Practice situational leadership: Know when to dig in and when to step back
5. Fire fast: Don’t keep average performers

This approach might seem risky, but SecurityScorecard competitors using traditional hiring methods haven’t matched their growth trajectory. The key is finding people who align with your company’s culture and are driven by more than just prestigious logos on their resume. Workable’s startup hiring guide emphasizes that startups should look for candidates with potential, a good attitude, and cultural fit.

Strategy #6: Let Your Developers Build Weekend Projects

The single most successful lead generation tool in SecurityScorecard’s history came from an unsanctioned weekend project. A developer decided to build a widget where visitors could enter any URL and receive a free security scorecard report. No one asked for it. No committee approved it. No budget was allocated. This story exemplifies what Gracker.ai calls the power of organic innovation in B2B SaaS growth.

Yet this simple tool generated over 880,000 company downloads and became a cornerstone of their growth strategy. This story embodies a crucial principle: innovation often comes from giving talented people the freedom to experiment. Revenue Inc’s guide emphasizes starting experimentation at the top of the funnel where sample sizes are largest—exactly what this widget achieved.

Contrast this with their carefully planned insurance industry feature—10 people, 4 months, millions of dollars, and zero revenue. The lesson is clear: structured innovation often fails while organic creativity succeeds. As Kalungi notes, quick GTM experiments that can be executed in days or weeks often outperform months-long development projects.

Creating space for innovation requires several elements:

• Encourage side projects: Some of your best features will come from unofficial experiments
• Reduce bureaucracy: The more approval layers, the less innovation
• Celebrate unauthorized successes: Make heroes of employees who take intelligent risks
• Learn from both outcomes: Document why the weekend project succeeded and the planned feature failed

SecurityScorecard Glassdoor reviews often highlight this culture of innovation as a key attraction for employees. When your team feels empowered to experiment, they’re more likely to create breakthrough solutions. Understanding modern login systems like Slack login or dealing with vulnerabilities like Log4j requires this kind of innovative thinking—you can’t always plan for what the market needs next. Impact Evolve notes that strategic hiring combined with innovation culture is essential for sustainable growth.

Strategy #7: Perfect Your Customer Acquisition Funnel

While the free report widget generated massive lead volume, SecurityScorecard what is it really excels at is converting those leads into paying customers. With 880,000 companies downloading reports and an average deal size of $30,000-40,000, their conversion funnel had to be incredibly efficient. Medium’s SaaS growth strategy guide emphasizes that SaaS growth comes from optimizing acquisition rate and customer lifetime value simultaneously.

The company serves a diverse customer base:

• 9 of the top 10 banks
• Governments in 46 different countries
• 70% of the Fortune 100
• Insurance companies and enterprises of all sizes

Their multi-product suite expanded from the initial security ratings to comprehensive third-party risk management, cyber insurance underwriting, and board reporting tools. This expansion allowed them to increase average contract values and create multiple touchpoints with customers. Metadata.io’s category creation examples highlight how companies like Gong and HubSpot similarly expanded their offerings after establishing category leadership.

Funnel Optimization Tactics:

According to Advance B2B’s guide, successful B2B SaaS companies focus on quality over quantity in experimentation:

1. Start with a free, valuable offer: The security report provides immediate value
2. Segment leads intelligently: Tailor follow-up based on company size and industry
3. Build multiple products: Create upsell opportunities within your customer base
4. Focus on measurable ROI: Help customers quantify the value of cyber security
5. Leverage customer success: Turn initial buyers into internal champions

The arrow PNG of their growth trajectory shows consistent upward movement because they mastered both acquisition and expansion. Whether customers access through traditional methods or modern platforms requiring Redcard login protocols, the experience remains consistently valuable. Shiny’s startup hiring guide notes that building high-performing teams is crucial for maintaining this level of execution excellence.

Looking Forward: From $140M to IPO and Beyond

As SecurityScorecard approaches $140 million in ARR with 25-30% organic growth projected, Yampolskiy revealed they’re actively exploring acquisitions in the $20-40 million ARR range. While IPO plans have been postponed due to market conditions (the bar has moved to “$300-400 million”), the company remains cash flow positive and focused on sustainable growth. LinkedIn’s category creation analysis shows that successful category creators often become acquisition targets or go public at premium valuations.

The path from zero to $140 million offers countless lessons, but perhaps the most important is Yampolskiy’s approach to advice: “Do not listen to advice from people who have not done your job.” This includes board members, investors, and advisors—no matter how successful they’ve been in other contexts. The Product Manager’s guide emphasizes that category creation requires conviction and the ability to ignore conventional wisdom.

Key Takeaways for Founders

1. Expansion before acquisition: Focus on delivering more value to existing customers before chasing new ones
2. Experiment relentlessly: Use the 5x5x5 framework to test ideas quickly and cheaply
3. Create, don’t compete: Pioneer new categories rather than entering crowded markets
4. Control your destiny: Make smart capitalization decisions that preserve founder control
5. Hire for hunger: Choose driven up-and-comers over polished executives
6. Embrace organic innovation: Your best features might come from unsanctioned projects
7. Optimize the full funnel: From free reports to enterprise contracts, every step matters

SecurityScorecard’s journey from a napkin sketch to a potential IPO demonstrates that with the right strategies, massive growth is possible even in complex industries like cybersecurity. Their focus on quantifying cyber risk through innovative data collection methods has created a new standard for how organizations assess security. Will Patrick’s category creation notes emphasize that successful category creators spend more time educating the market about the problem than promoting their solution—exactly what SecurityScorecard has done.

Whether you’re building in security or any other industry, these strategies provide a blueprint for sustainable, profitable growth. The key is adapting them to your specific market while maintaining the core principles of experimentation, customer focus, and strategic thinking. As TalentHR’s HR guide notes, combining strong hiring practices with innovative growth strategies creates an unstoppable foundation for scaling.

For more insights from successful founders and growth strategies, visit FounderPath’s blog to access additional resources and founder stories that can help guide your own journey from zero to IPO.