When it comes to meeting compliance standards, many startups dominate the alphabet. From GDPR and CCPA to SOC 2, ISO27001, PCI DSS and HIPAA, businesses have strived to meet the compliance standards required to operate their businesses.
Today, every founder of the healthcare industry knows that their product must be HIPAA compliant, and any business working in the consumer space would be well aware of GDPR, for example.
But a mistake many high growth companies make is to think of compliance as a catch-all phrase that includes security. Thinking that this could be a costly and painful mistake. In reality, compliance means that a business adheres to a minimum set of controls. Security, on the other hand, encompasses a wide range of best practices and software that help manage the risks associated with business operations.
It makes sense that startups want to tackle compliance first. Compliance plays an important role in the geographic expansion of any business in regulated markets and in its penetration into new industries such as finance or healthcare. So, in many ways, compliance is part of a startup’s go-to-market kit. And indeed, business buyers expect startups to tick the compliance box before signing up as a customer, so startups rightly align with their buyers’ expectations.
One of the best ways for startups to start tackling security is to hire security services early on.
With all of that in mind, it’s no surprise that we’ve seen a trend where startups comply from the early days and often prioritize this motion over developing a cool feature or feature. when launching a new campaign to attract prospects, for example.
Compliance is a big step for a young company and one that drives the cybersecurity industry forward. It forces startup founders to put on safety hats and think about protecting their business, as well as their customers. At the same time, compliance reassures the company’s buyer’s legal and security teams when engaging with emerging vendors. So why is compliance alone not enough?
First, compliance does not mean security (although it is a step in the right direction). This is more often than not that young companies are compliant while being vulnerable in their security posture.
What does it look like? For example, a software company may have met SOC 2 standards that require all employees to install endpoint protection on their devices, but they may not have a way to force employees to enable and update the software. Additionally, the business may not have a centrally managed tool for monitoring and reporting to see if endpoint breaches have occurred, where, to whom, and why. And, finally, the business may not have the expertise to quickly respond to and correct a data breach or attack.
Therefore, although compliance standards are met, several security holes remain. The end result is that startups can experience security breaches that end up costing them dearly. For businesses with fewer than 500 employees, an average security breach costs around $ 7.7 million, according to IBM research, not to mention brand damage and loss of trust from existing and potential customers.
Second, an unforeseen danger for startups is that compliance can create a false sense of security. Receiving a certificate of compliance from objective auditors and renowned organizations could give the impression that the safety front is covered.
Once startups start to gain traction and recruit high-end customers, that sense of security grows, because if the startup is successful in acquiring security-conscious customers of the F-500, compliance should be enough for now. and the startup is probably secured by association. When billing after corporate transactions, it’s the buyer’s expectations that drive startups to achieve SOC 2 or ISO27001 compliance to meet the company’s security threshold. But in many cases, business buyers don’t ask fancy questions or deepen their understanding of the risk associated with a vendor, so startups are never really called upon to interfere with their security systems.
Third, compliance only deals with a defined set of known data. It does not cover anything new and unknown since the last draft of the regulatory requirements was written.
For example, APIs are increasingly used, but regulations and compliance standards have yet to catch up with the trend. For example, an e-commerce business needs to be PCI-DSS compliant to accept credit card payments, but it can also take advantage of multiple APIs that have flaws in authentication or business logic. When PCI was written APIs weren’t common, so they aren’t included in regulations, but today most fintech companies rely heavily on them. So a merchant can be PCI-DSS compliant, but use insecure APIs, potentially exposing customers to credit card breaches.
Startups are not responsible for the confusion between compliance and security. It’s difficult for a business to be both compliant and secure, and for startups with limited budget, time, or security expertise, it’s especially difficult. In a perfect world, startups would be both compliant and secure from the start; it is unrealistic to expect start-ups to spend millions of dollars protecting their security infrastructure. But there are some things startups can do to become more secure.
One of the best ways for startups to start tackling security is to hire security services early on. This team member might seem like a ‘nice to have’ that you could put off until the company reaches a significant workforce or turnover, but I would say that a security manager is a good one. Key early hiring as this person’s job will be to focus entirely on threat analysis and identification, deployment and monitoring of security practices. In addition, startups would benefit from ensuring that their technical teams master security and keep security in mind when designing products and offers.
Another tactic that startups can adopt to boost their security is to deploy the right tools. The good news is that startups can do this without breaking the bank; Many security companies offer open source, free, or relatively affordable versions of their solutions to emerging businesses, including Snyk, Auth0, HashiCorp, CrowdStrike, and Cloudflare.
A full security deployment would include software and best practices for identity and access management, infrastructure, application development, resiliency, and governance, but most startups are unlikely to have the time and budget to deploy all the pillars of a robust security infrastructure.
Fortunately, there are resources like Security 4 Startups that provide a free, open source framework for startups to know what to do first. The guide helps founders identify and solve the most common and important security issues at every step, providing a list of entry-level solutions as a solid starting point for building a long-term security program. . Additionally, compliance automation tools can help with ongoing monitoring to ensure these controls remain in place.
For startups, compliance is key to building trust with partners and customers. But if that trust is eroded after a security incident, it will be nearly impossible to regain it. Being secure, not only compliant, will help startups take trust to a whole new level and not only drive market dynamics but also ensure their products are here to stay.
So instead of equating compliance with security, I suggest broadening the equation to consider compliance and safety equals trust. And trust is synonymous with business success and longevity.