Written by William Kilmer
As startups get better funding and deal with more valuable data and transactions, they are more vulnerable than ever before to the risk of data breaches. Here’s the upside: I think startup founders can use this to their competitive advantage.
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First, the unwelcome news. I’ve seen firsthand how bad cyber attacks can damage startups. Here are two of the many examples I know of:
- Company 1 succeeded in raising a Class A investment round. Subsequently, he had a huge amount of data that was unintentionally and very publicly violated. Having lost the trust of clients and investors, she was unable to raise additional funding.
- Company 2 was planning to go public. Prior to the IPO, its clients had expressed concerns about anomalies in the company’s software. He attributed the leadership to poor security practices by its users and failed to investigate. It later discovered that a nation-state actor had breached its network, which led to a massive and difficult incident response and an expensive platform valuation and delayed the company’s initial public offering.
To thwart these threats, founders, boards of directors, and startup leaders need to change their approach to cybersecurity. For years, they’ve given up investing in secure software development, compromising data security, and putting things in the cloud without worry. They need to start thinking strategically, like Apple.
Be like an apple
In April 2021, Apple made the unprecedented move to launch an App Tracking Transparency (ATT) app that gave iPhone users the ability to opt out of allowing apps to track and share information. Early indications are that most users are using it, and as a result, companies like Meta (Facebook), Snap, and Peloton have reported that Apple is already affecting their earnings.
Most importantly, the transparency of app tracking has allowed Apple to be seen as the most secure and private mainstream phone on the market. Positioning is important.
Apple’s position as the most secure solution will continue to attract customers. In a recent informal survey conducted on LinkedIn, 50 percent of respondents said they were most likely to trust Apple to maintain their privacy and security in the metaverse. Only 2 percent voted for Facebook.
How to make cyber strategy
As an emerging leader, how can you make cybersecurity and privacy strategies for your organization?
First, treat cybersecurity as an ability, not a cost. This small difference takes you from a cost-reducing mindset to an investment optimization. This is about the processes and data sets you need to protect and differentiate yourself.
Second, if the Head of Engineering or COO is an “acting CISO,” it’s time to hire a real CIO. Giving this role to your Vice President of Engineering is an insult. It is also unrealistic to expect to expand their expertise to include cybersecurity. If you need to hire a CISO part-time. There are many organizations that will offer one on a partial basis.
Third, define and define strategic cybersecurity goals at the board level. Create goals, not a dashboard of the security metrics you will achieve to build your capabilities. Define what it means to be the most secure and private solution and set them as your goals.
Fourth, offer to write security into your value proposition. Start out by identifying exactly how your solution is different and differentiating it, and help your sales organization understand how to position security as a tangible customer benefit.
Finally, make security a product feature and integrate privacy and security into the product roadmap. For too long, security and privacy sat as a trade-off for marketing time. It’s time for your development team to treat it as a requirement, not an option.
William Kilmer is the Managing Partner of C5 Capital, a dedicated venture capital fund that invests in cyber security, cloud infrastructure, applied data analytics and space economy companies.
Illustration: Dom Guzman
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