Oct 06 2022

The Importance of Cybersecurity Compliance for Startup Businesses

Compliance can too easily be put on the back burner by growth-focused startups — but failing to act early can carry severe reputational risks years down the line.

Startups are positioned very carefully in part because they grow — fast. Nimble roots can quickly make way for large headcounts and complex infrastructure.

And with that fast growth, it can be easy for compliance to be minimized in the process. After all, it may not be top of mind when your company’s scope is expanding by the week.

But the risks are simply too high to let that issue fall to the back burner, and the discussion goes all the way back to the beginning of your company.

Keeping Security Front of Mind in the Early Days

Part of the challenge that startups often face is that, early on, there may not be room for investing in security.

When there’s no budget for high-end enterprise security solutions or security experts — let alone a CISO — it can bring about apathy in founders, who might not see the necessity of security investment during those early days, especially if the company is not in a regulated space.

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But this can result in problems down the line, as these early decisions may force a company to retrofit already-developed infrastructure to agree with a new security mindset, creating a cascade of costs and setbacks. In a blog post, Vikrum Nijjar, co-founder and CEO of Gold Fig Labs, argued that processes should be built with a focus on limiting technical debt and minimizing the negative impacts of potential security problems.

“Improving your processes to prevent shooting yourself in the foot will pay immediate dividends,” he wrote. “Solving your startup’s problems around self-incurred outages and data loss are more pressing than InfoSec.”

With that in mind, the best way forward is to give security an early focus, implementing strong standards as a bedrock to build upon later. Utilizing starting points such as the National Institute of Standards and Technology’s Cybersecurity Framework can provide a good path forward for a lot of companies, while leaving time to consider later compliance needs.

Perhaps, later in your corporate journey, your company will find that it needs to comply with the Cybersecurity Maturity Model Certification (CMMC) Level 3. Maybe your organization handles medical information, requiring Health Insurance Portability and Accountability Act (HIPAA) compliance. Or perhaps you deal with direct consumer payments, requiring Payment Card Industry Data Security Standard (PCI DSS) compliance.

Implementing growth stage–appropriate approaches to compliance ensures that standards will be easier to meet later on — and adjust as necessary — if you take the right steps along your path now.

RELATED: Discover how the cloud can assist financial institutions with regulatory compliance.

Scaling with Security and Compliance in Mind

Of course, once your organization gets on a growth track, the conversation about security can change significantly. Even if you do take the right steps to compliance, growth can cloud the picture around next steps.

At a minimum, startups should emphasize database encryption, strong multifactor authentication, access control policies and password policies. But with growing headcounts, this task can grow increasingly complex as more layers of access and greater compliance requirements are needed. Your company might have started without a CISO, but now, all of a sudden, you need one.

And on top of all this, the business case for implementing compliance technology matters even more if your company targets the enterprise. If your business is focused on a specific sector, your organization will likely be on the hook for compliance needs for corporate customers that are looking to avoid supply chain attacks. A failure to build strong compliance can cost your company business opportunities.

Chee Tan, vice president of business development and channels for Tugboat Logic, observes that implementing compliance automation can help ease these challenges by ensuring that the table stakes remain managed, allowing your organization to focus on higher-level compliance needs.

“Meeting security, availability, processing integrity, confidentiality and privacy standards are no longer an option for companies of any size that want to grow their business,” he says. “These objectives are critical for gaining trust from customers and confidence from the investment community.”

By implementing tools targeted at automating compliance and data security needs, such as the Tugboat Logic platform, companies can focus on areas that make sense for the bottom line and improve sales cycles.

Chee Tan
Meeting security, availability, processing integrity, confidentiality and privacy standards are no longer an option for companies of any size that want to grow their business.”

Chee Tan Vice President of Business Development and Channels, Tugboat Logic

Where Startup Investor Concerns Come into Play

The question of compliance impacts not only how startups manage growth, but also how they raise future capital.

Increasingly, investors are doing their due diligence to ensure that the companies they invest in meet the same high standards for cyber hygiene as for their overall business practices and potential. Due diligence for cybersecurity will increasingly become part of the conversation moving forward — ensuring that investors and acquirers alike are getting value from their investment.

Investors want to protect the value that they’re creating — as do the companies they invest in.

For startups, it can take years to build trust with customers, but only seconds to destroy it. With that in mind, startups absolutely need to incorporate security into every area of their business — whether it’s verifying code, implementing strong processes and regular vulnerability testing, or vetting the people who have access to infrastructure.

Building a strong operational security discipline — and using the correct framework to manage it — isn’t just a way to protect your customers and your reputation. It could be a key part of ensuring your company’s long-term future.

A helping hand, such as CDW’s Startup Technology Solutions, can ensure that your company’s approach to compliance is more than an afterthought.

This article is part of BizTech's AgilITy blog series. Please join the discussion on Twitter by using the #SmallBizIT hashtag.

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