The Ultimate Red Team Exercise: Launching a Bug Bounty Program

In the cybersecurity world, red team exercises serve as the ultimate litmus test for a company’s defences. But when every conceivable test has been run, there’s one last, high-stakes move left to make: launching a bug bounty program. By inviting external researchers to uncover vulnerabilities, organisations can truly push their security to its limits. But if you're considering a bug bounty program, having a robust, well-configured practice environment is critical. It not only enables you to test the bounty program setup but also ensures that the security team and bounty hunters have a secure, controlled place to test without affecting the production environment. 

In this blog, we’ll discuss why launching a bug bounty program is the ultimate red team exercise, and we’ll explore how to set up practice environments that support an effective bounty program. 

1. From Simulated Attacks to Real-World Testing 

A bug bounty program is not just another test; it’s a live exercise where real attackers—highly skilled ethical hackers—are invited to find weaknesses. Unlike internal red teams that have to operate within company protocols and are aware of system architecture, bounty hunters come in with no prior knowledge. This unbiased testing reveals real-world vulnerabilities and provides insights that internal teams might miss. To prepare for this, organisations should set up realistic practice environments where defences can be thoroughly tested, starting with development and staging environments that mirror production. 

Practice Environment #1: Development/Staging Sandbox 

A sandbox that reflects the production environment in terms of architecture, configurations, and permissions offers researchers a chance to test without fear of affecting live systems. Access to a development or staging sandbox means: 

● Simulated, Non-Critical Data: Replace sensitive data with mock data, enabling testers to work as if in production while avoiding data privacy risks. 

● Duplicated Setup: Ensure that all configurations match the production environment to accurately replicate vulnerabilities that might exist in the real world. 

2. Building Diverse Attack Surfaces 

Bug bounty hunters come from varied backgrounds and employ different techniques, bringing unexpected approaches to the table. An effective bug bounty practice environment should offer a wide range of systems for testing, from application security to network, cloud, and endpoint security. 

Practice Environment #2: Containerised Testing Environments 

Using Docker or Kubernetes, you can replicate various services and applications in isolated containers that allow safe, scalable testing. This approach allows testers to:

● Isolate Tests: Bounty hunters can focus on specific components (e.g., a web application) without impacting others. 

● Scale Quickly: Testing environments can be spun up and down as needed, providing easy access to different configurations and environments. 

3. Continuous Testing for Continuous Learning 

Bug bounties differ from traditional red team exercises in their continuous nature, with new testers examining your environment around the clock. This provides real-time insights and adapts to evolving threats. To support this, set up environments with automation for consistent resets, so they’re always in a clean state for new tests. 

Practice Environment #3: Automated Reset Environment 

An environment that automatically resets after each session ensures that: 

● Tests Begin Fresh: Each researcher gets a consistent starting point, free from any leftover artifacts or changes from previous sessions. 

● Realistic Scenarios: Since each reset mirrors initial configurations, the environment remains realistic, revealing persistent flaws and systemic issues rather than just temporary weaknesses. 

4. Controlled Environments for High-Risk Testing 

Vulnerabilities like privilege escalation and lateral movement require controlled environments where users can attempt to exploit weaknesses without risking production systems. These areas should be segmented and set up with clear monitoring to capture every action. 

Practice Environment #4: Privileged Attack Simulation Lab 

Create isolated, privileged environments where testers can safely experiment with lateral movement and privilege escalation. Here, they can mimic real-world attacks in an environment similar to what an attacker might face in production. Benefits include: 

● Complete Segmentation: Use VMs or dedicated cloud instances that are segmented from production to allow testing of high-risk actions. 

● Logging and Monitoring: Monitor actions to understand how vulnerabilities were exploited and create more robust defences. 

5. Incident Response Drills in a Live Environment 

A bug bounty program provides a unique opportunity for incident response (IR) teams to experience real-life scenarios. By creating environments that simulate real-time threats and responses, IR teams can practice detection, mitigation, and response under realistic conditions. 

Practice Environment #5: Incident Response Simulation

Set up a realistic, monitored environment where IR teams can practice real-time responses to vulnerabilities found in the bounty program. Benefits include: 

● Immediate Feedback Loop: Track vulnerabilities as they’re reported, and measure response time and effectiveness. 

● Simulation of Real Threats: By configuring the environment to handle various types of attacks (e.g., DDoS or injection attacks), the IR team gains invaluable experience under realistic conditions. 

6. Learning and Testing with Publicly Available Vulnerable Apps 

To encourage continual improvement, companies can set up labs using publicly available, intentionally vulnerable applications. This allows bounty hunters to warm up before engaging with proprietary environments and helps new hunters practice basic techniques. 

Practice Environment #6: Vulnerable Application Lab 

Set up and host versions of widely known vulnerable apps (e.g., DVWA, Juice Shop, or WebGoat) in a private environment. Benefits include: 

● Sharpening Skills: New hunters can learn and practice techniques here, while more experienced hunters can brush up on niche skills. 

● Training Environment for Internal Teams: Both IR and development teams can use these labs to understand the types of attacks they might encounter. 

7. Effective Tools for Monitoring and Managing the Bug Bounty Process 

Running a successful bug bounty program isn’t only about what environments you set up; it’s about how well you can manage them. Bug bounty platforms or frameworks such as HackerOne, Bugcrowd, and self-hosted solutions (e.g., Open Bug Bounty) help manage submissions, automate rewards, and track remediation. 

Conclusion: The Most Real Red Team Exercise—Backed by Solid Practice Environments 

A bug bounty program is more than a challenge to external researchers; it’s a test of your entire security operation, from your environment setup to your incident response team. Setting up practice environments ensures that bounty hunters can test safely, that IR teams can respond effectively, and that organisations gain unparalleled insight into their weaknesses. These practice environments—sandboxed, automated, diverse, and isolated—empower organisations to transform weaknesses into strengths, and ultimately become better prepared for real-world attacks. 

Launching a bug bounty program is a bold move, but with the right practice environments, it’s one that can take an organisation’s security to the next level, providing a practical and powerful way to reinforce defences.