Startup business executive team taking notes on board wall showing cyber attack risks

Why Cybersecurity Is Crucial for Startups and How To Mitigate Risks

The life of a startup revolves around evolution, requiring a constant ability to pivot to adapt to the ever-changing technology industry landscape. This agility, while necessary for survival, creates opportunities for new risks. Unfortunately, startups often operate under the misconception that they’re too small to need a cybersecurity program , leaving them with a broader threat landscape. In fact, 43% of the time, startup size organizations are the primary targets for hackers. Because these organizations aren’t prepared, and since they don’t have the same funding as long-standing companies, 60% of small businesses close within six months of a cyber attack.

When you consider that the average cost of a data breach is US$4.2 million annually as of 2021, then understanding how hackers find vulnerabilities is even more crucial. This post will explore why cybersecurity is so vital to startups, how it’s often misunderstood, and it will offer tips to improve your overall security posture

The importance of cybersecurity

Put simply, without an essential cybersecurity strategy, your environment becomes vulnerable to malicious actors that pose not only a risk to the acquisition and integrity of your data but also to your business reputation.

To circumvent perimeter network security, attackers frequently target employees, the weakest link in cybersecurity, with basic insider knowledge obtained primarily through the internet. In fact, according to a 2021 analysis by Verizon, approximately 69% of breaches of public administration were the result of social engineering.

In the age of digitalization and exponential data growth and accumulation, cybersecurity is no longer a recommendation but a necessity. Not only are regulatory requirements becoming more stringent, but consumers expect a certain level of data protection. In fact, most prospective clients/partnerships now require organizations, regardless of size, to prove their security posture via issued Security Assessment Questionnaires (SAQ’s)- a tedious survey of the policies and procedures implemented to protect data. Depending on your industry and the class of data you’re accumulating, regulations may dictate audits that are required to enforce security standards. While these security initiatives can be resource-heavy, they’re manageable with a well-established cybersecurity foundation.

Still not convinced? Here are some top reasons startups should prioritize cybersecurity:

  1. Startups are more likely to be targeted by cyberattacks because they typically have fewer security resources than enterprise organizations
  2. A data breach can cause significant financial damage, which may be irrecoverable at that phase of startup development
  3. A cyber attack can be lethal to an adolescent startup’s reputation
  4. Cybersecurity can act as a persuasive competitive differentiator amongst peers less likely to have an established program
  5. New markets often have independent compliance requirements for conducting business

How to mitigate risks

While the prospect of building and implementing a cybersecurity program may seem complex and intimidating, some foundational steps will set you on due course for your security journey.

To establish a comprehensive security foundation, core competencies include:

  • Creating a comprehensive cybersecurity framework built on the principles of Zero Trust
  • Investing in employee security enablement
  • Ensuring that all devices are adequately protected with up-to-date antivirus software and firewalls
  • Restricting and monitoring sensitive data with identity management
  • Regularly conducting vulnerability scans
  • Updating software and operating systems as soon as new patches are released
  • Enforcing the utilization of complex passwords with regular changes
  • Implementing access management tools like multi-factor authentication (MFA) and Single Sign-On (SSO)
  • Encrypting and regularly backing up data

The most common attacks and how to prevent them

While cybersecurity practices have evolved, so has the sophistication of cybercriminals. Gone are the days of easy-to-spot ‘Nigerian Prince’ scams that appeal for a sum of money in exchange for a larger one. Modern scammers’ complexity, vectors, and even language have become increasingly savvy and difficult to spot.

Here are some common attack mechanisms and tips to spot them:

  • Computer virus: malware from corrupt files in email links, website downloads, etc that infect a computer and act as a trojan horse spreading across devices and stealing information. Tips: deploy and maintain a firewall and invest in employee security training.
  • Ransomware attacks: a nefarious actor infiltrates the company network to gain access to company information that’s then held hostage for a monetary sum. Tips: implement identity and access management practices, deploy continuous monitoring software, and frequently backup data.
  • Phishing attacks: emails seemingly from a trusted source to coax sensitive data from internal users or deploy malicious software. Tips: always check the email domain, never click links, and, when in doubt, validate the source with an internal advisor.
  • Social engineering: the impersonation of a trusted source to gain confidential information. Tip: always check email domains, contact the actual source through a different communication mechanism (ie phone) to validate, contact an internal administrator to advise.

It’s important to note that cybersecurity isn’t just a risk mitigator. It can be leveraged as a strategic competitive differentiator to enable both client and partnership acquisitions and also grow into new geographies with compliance requirements. Investing in cybersecurity is investing in your organization’s protection and scalability. Security isn’t just data protection – it’s an avenue for client acquisitions, an opportunity to expedite market growth, and a chance to build public trust that will serve as part of the business foundation for years to come.