Experts are issuing strong warnings to the cybersecurity industry, saying more companies will follow IronNet into bankruptcy.

IronNet surprised the industry when it announced it would file for bankruptcy and shut down. The firm originally launched to much fanfare, boasting former NSA director Keith Alexander as one of its founders.

Unfortunately, experts warn IronNet is just the beginning. The industry’s issues stem from what many see as unrealistic expectations regarding potential growth, setting firms up for disaster.

“We will see more of these bankruptcies with highly leveraged cybersecurity companies, even those with ‘unicorn status’,” Approov CEO Ted Miracco told SC Media, highlighting an IANS Research report showing a 6% expansion in security budgets.

“This is fundamentally incompatible with the large cadre of VC backed companies that expect triple-digit growth figures, especially in this current economic environment,” he added.

Mirraco says the firms that are best-positioned to survive are those that already have a track record of thriving in challenging environments and have a solid focus on innovation and profitability.

“With a fragile economy and a very crowded NDR market, it’s even more critical for those of us in this space to get back to these basic principles,” said Stamus Networks CEO Ken Gramley.