5 Reasons Your Startup Needs to Include Cybersecurity From the Beginning
Starting your own company may be one of the most exciting things you ever do. There’s nothing like building a business from scratch simply because you have a fantastic idea and the skills, team, and determination to pull it off. So imagine you’re living your best entrepreneurial dream, and suddenly, it all comes crashing down. Why? How? Did you have product problems? Were you too slow to market? Did the markets change? Investors pulled out? Bad timing? Bad luck?
No. Everything was perfect… until someone in your startup clicked on an email link, exposing your entire network to a cyber bad actor. The bad actor used that vulnerability to steal highly sensitive customer data, bank account details, and intellectual property. To add insult to injury, they installed ransomware on all of your cloud operations (preventing you and your customers from accessing your services), resulting in your operation coming to a halt. You suffered a vicious cyberattack, and the worst part is you never saw it coming. You thought you didn’t need to worry about cybersecurity because you were a startup everyone loved! You aren’t the US government or Bank of America! What happened?
“If you’re a startup (or any small business), you must worry about cybersecurity. There are no exceptions.”
The truth is everyone needs to worry about cybersecurity. Yes, even you: a small business owner reading this article right now. If you're a startup (or any small business), you must worry about cybersecurity. There are no exceptions. And in our vast and ever-expanding digital universe, you will be rewarded for investing in cybersecurity sooner rather than later. That can be hard for entrepreneurs to realize, which is natural — building a company is incredible, but installing the locks on the front door may be slightly less fun. But cyber threats are so pervasive that you can’t ignore them. Here are five reasons startups need to include cybersecurity in their strategic plan from the beginning.
You want to…
1. Protect your data and intellectual property
One of the most valuable assets in a startup is data and intellectual property (IP). IP, in particular, can help demonstrate the uniqueness of a young company’s vision. IP shows ambition, innovation, and promise, and a strong patent portfolio can help secure funding and eventually even an acquisition or initial public offering.
Bad actors specialize in targeting data and IP, especially in smaller organizations with fewer security resources. If a bad actor can enter your network and compromise your systems, they may be able to steal your sensitive information. Then, they can hold it for ransom or sell it on the dark web. They reap a reward while you face legal consequences and a damaged reputation. Plus, you may no longer possess what makes you unique, leading to a dire situation that can end your business. Most small businesses close shop six months after a data breach.
Bottom Line: When building a company, you can’t let a data breach derail you. Protect your sensitive information from the moment you start.
2. Maintain investor confidence
Investors are increasingly prioritizing cybersecurity when they evaluate startups. Think about it like this — if you were an investor who assessed two companies as relatively equal, but one talked about how their commitment to security would increase business value, while the other said that they would worry about security later, which one would you feel better about? Especially knowing what I previously mentioned, most small businesses close shop six months after a data breach.
The reality is most companies are likely to be attacked by bad cyber actors. Committing to security from the beginning of your venture can foster trust among investors, which can attract further investment. You can build this momentum by proactively discussing security with your investors. Point them to industry-specific articles they can understand, and offer them collateral demonstrating why security is part of your strategy.
Bottom Line: Want investors to trust you? Tell them why you have a zero trust model… LOL. It might sound odd, but it will let them know you value security, you are thoughtful, and will protect their investment.
3. Future-proof your product or service
Cybersecurity is an ongoing war. The battles against bad cyber actors never end; they just evolve as technology changes, defensive measures grow old, and new vulnerabilities arise. Within this reality, startups occupy a dangerous place. Attackers often target startups due to perceived vulnerabilities in products or services. They think startups are obsessed with getting that minimum viable product (MVP) out the door and, therefore, can be easily exploited. And, let’s face it — this is mainly true.
Pro-Tip!
Think of security like the sugar in your cake. It is much easier to factor in your usage of sugar when you’re planning your cake, not after it is fully baked.
But it doesn’t have to be. Your glaring priority — that MVP — should never come at the expense of security measures that can make or break your business. And if you can’t figure out how to safeguard your products and services from cyber threats, you may want to rethink your plan altogether.
If you start with security from the beginning, you can ensure that your product or service always factors in security as you grow and expand. It is much easier to start with security than it is to add it in after you are fully operational, 10,000 customers later.
Bottom Line: Investing in cybersecurity early builds a strong foundation for long-term protection and growth — don’t give future customers a reason to think it’s unsafe to do business with you.
4. Gain a competitive edge
Similarly to point two, where cyber can help you gain investor confidence, strong cybersecurity can ultimately become a selling point, differentiating you from competitors prioritizing short-term gain over long-term security. Prioritizing security enables you to compete by minimizing risks that threaten business profits, like ransomware. If you don’t have to pay $1.82 million to recover from a ransomware attack, you can use that money for marketing, product enhancements, profit allocation, etc. Prioritizing security also allows better recovery from an attack, where a less prepared competitor will be susceptible to longer recovery times. Ultimately, what good is growth if you simultaneously increase the chance of suffering financial loss, downtime, reputational harm, and legal consequences?
Once you have secured your advantage (Haha, get it? Like securing your funding… [cough] ah, back to the article), strategically disclose it in articles, pitch decks, one-pagers, and sales calls to prospects and customers — partner with organizations that can help you convey the value of cybersecurity in clear and logical ways. Much of cybersecurity is complex and confusing. By simplifying it for prospects and customers, you’ll be in a prime position to gain their trust and demonstrate your competitive edge.
Bottom Line: Outpace your competition by preparing to address catastrophic cyber risks. Then, highlight your preparation as a differentiation factor to prospects and customers. In other words, “John Wick” your cybersecurity program and brag about it.
5. Always say “yes” to new business opportunities
Many industries have strict data privacy and security laws/regulations governing the handling of sensitive information. So do jurisdictions, whether it’s the GDPR (the General Data Protection Rule in the European Union) or the CCPA (California Consumer Privacy Act), just two of the relatively new data privacy laws being passed worldwide. What does this mean for your startup?
First, failure to comply with these laws/regulations can be costly, whether the result is a hefty fine, an operational disruption, or both. Second, many of your prospects will ask if you are compliant with the laws/regulations put upon them, whether they’re European Union (EU) consumers who greatly value data privacy or businesses in highly regulated industries. If you can’t demonstrate that you are, you may be out of the running to do business with them. This can cost you millions of dollars. Why go there? You always want to be able to say “yes” to new business opportunities!
You should be dialed into your target market and understand what data privacy and security laws/regulations are in play. Some will be industry-specific, like the Health Insurance Portability and Accountability Act (linked to patient data in the healthcare industry). In contrast, others will be broader, like GDPR (linked to any organization that processes people's personal data in the EU).
Bottom Line: Don’t put yourself in a position where you must turn down business because you can’t comply with data privacy and security laws/regulations. Privacy and security are not the same thing, but they are closely related, and investing in both is a visionary strategic move.
Conclusion
Building your startup should be immensely exciting. A cyberattack will cause a massive migraine, at best, or end your company, at worst. If you bake in security from the beginning, you’ll avoid the pitfalls and be in a great position to produce your MVP, grow your business, and reap all the rewards of making your startup successful.
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Cyber 101 | The Solopreneur | SMB | BoD
