Snapchat's Data Breach Should Be a Wake-Up Call for Startups

In many ways, Snapchat’s rise to fame and fortune has been a startup dream. After all, it’s not every day that a fledgling app is offered billions of dollars by Mark Zuckerberg.

But the company has a bit of a black eye since the private phone numbers associated with 4.6 million profiles were published on a now defunct site, SnapchatDB. Snapchat co-founder Evan Spiegel has yet to apologize for the hack; he treats it as an unavoidable byproduct of doing business on the web.

It’s unclear whether the teens, who make up the majority of the mobile application’s users, agree. The hallmark of the app is its focus on privacy and security. The app drew users because they could take pictures and “destroy” the evidence after it’s sent. If the system is compromised so easily, will users continue to trust and rely on the service for their discreet image-based messaging?

It’s important to remember that this breach was done by white-hat hackers, who kindly obscured the last two digits of each phone number, which helped blunt the damage of the breach. Real hackers with bad intentions wouldn’t be so kind.

Security Shouldn’t Be the Red-Headed Stepchild of Startups

Building a business requires founders to wear so many hats that sometimes the security hat just never makes it out of the closet. Scale, stability and revenue take precedence.

In an article in CSO on the Snapchat breach, Wolfgang Kandek, chief technology officer for cloud-security vendor Qualys, echoed this exact sentiment.

“I think this is almost normal for a company at their stage that is focused mainly on scalability and functionality,” he said. “I am sure they will pay more attention to abuse and security issues in the future.”

But what if there is no future for the company because users bail after a devastating breach?

In a web-based model where infrastructure is hosted in the cloud and opening shop merely means hitting “publish,” it’s easy to think security is somebody else’s problem. But in reality users have no idea who is responsible for what on the backend; they only see the startup and consider any data leaks as a breach of trust between themselves and the company.

Tim Devaney and Tom Stein wrote about the lax attitude toward security prevalent among many startups in an article for ReadWrite in April 2012:

Trouble is, by putting off these critical steps, your startup risks the real possibility that there will be no "later." If some other company steals your intellectual property, your dreams can give way to lights out, a phone call to the lawyer, and "Who wants some vodka in their Red Bull?"

And don't think that you're safe just because you're small. "IP theft is happening a lot more in startups," says Chris Porter, senior security analyst at Verizon and coauthor of Verizon's recently released 2012 Data Breach Investigations Report. "IP theft and other data breaches at startups are definitely trending up."

If startup founders weren’t thinking about securing their corporate user data before, the Snapchat breach should definitely inspire them to build a strategic security plan going forward.