The past years have seen an unprecedented migration of transactions and interactions from offline to digital-first platforms, fueling the rise of a new wave of startups. In this landscape, startups have become especially vulnerable to cyber-attacks. As they expand their digital footprint through increased online transactions, data storage, and communication, they inadvertently create more entry points for potential attacks.

Case in point: Carousell, one of Singapore’s most well-known digital-first startups, announced last year that it suffered a personal data security breach which saw information from 2.6 million accounts being sold on the Dark Web and hacking forums. In a similar incident, Indonesia fintech Cermati was reported to have 2.9 million of its users’ data leaked and sold.

A single data breach can cost a startup millions of dollars in lost revenue, damaged reputation, and legal fees. While some of these can be recuperated through cyber insurance, the reputational damage can be irreversible, especially for startups trying to establish their reputation and presence in a nascent market.

That’s why it’s so important for startups to scale their cybersecurity along with the business at an early stage. By doing so, startups can build an unfair advantage over their competitors.

The benefits of cybersecurity

Having a strong cybersecurity posture can protect your organisation from cyberattacks. This can help to prevent data breaches, financial losses, and other damage. While you may be inclined to think that startups are not attractive to bad actors, that is not the case in practice. Due to the limited resources and lack of expertise, startups are more likely to be targeted by cyberattacks simply because they are seen as easy targets.

Aside from protection, ensuring that you have the right cybersecurity controls in place can also help your company stand out from your competitors. In industries that require them, attaining the right cybersecurity compliances can give you the edge that brings in the deals.

Also Read: Lessons from Echelon: Make cybersecurity a priority from day one of the business planning

Even in industries that do not require regulatory compliance, showing that you’ve achieved certain cybersecurity certifications, like ISO 27001, can help you build trust with your customers and investors. In fact, 73 per cent of APAC companies admitted that they had lost deals due to low confidence in their security strategy.

Taking the first steps

Founders do not need to hire an entire security team right at the start. Knowing the unique environment in which startups run, it’s important to focus on other functions like product, operations, and marketing. However, that doesn’t mean cybersecurity should be out of the picture.

Here are some steps you can take to begin your cybersecurity maturity journey:

Start with a strong foundation. This includes having a clear understanding of your cybersecurity risks and developing a comprehensive cybersecurity plan. By having a security strategy in place, you’ll be able to understand your risks, what you need to protect, and which tools or services to procure to ensure its protection.
Educate employees about cybersecurity: Employees should be educated about cybersecurity risks and how to protect themselves and their credentials from being stolen. Most cyberattacks start from a successful breach into an employee’s account through social engineering or phishing before moving laterally and accessing the company’s entire network. Building the ‘human firewall’ is essential in lowering your organisation’s risk.
Have a plan for responding to cyberattacks: Often overlooked, startups should have a plan for responding to cyberattacks. In this plan, what counts as an ‘incident’ is defined, the incident response team from threat recovery to communications is defined, and your process of dealing with a successful attack is outlined. This document will show your company’s preparedness and provide clear SOPs when an incident occurs.

How to scale cybersecurity

As your organisation grows, cybersecurity needs to then scale accordingly. This means that they need to invest in new security technologies, hire security staff, and develop new security procedures.

Also Read: The future of cybersecurity: A plan to fill the workforce gap and protect the world

Here, depending on the size of your company and requirements, you can choose from the following:

Hiring a Managed Services Provider (MSP): For companies without high requirements and would just like to have peace of mind over their network, an MSP may be the way to go. MSPs can provide startups with a comprehensive set of cybersecurity services, including threat monitoring, incident response, and security consulting.
Using SaaS cybersecurity solutions: If you have a security team, a good option is to look into cloud-native cybersecurity tools and solutions for them to perform their jobs effectively without the need for high hardware investments.
Building your dedicated Security Operations Centre (SOC): This is the costliest option, as it requires you to hire a team and procure both hardware and software for your cybersecurity. This allows you the most control over your network, and some organisations may require this right from the start, such as those operating in regulated industries that require your network to be on-prem.

This is not a one-fixed-path situation; you could start with an MSP and transition into an in-house SOC over the course of the years as your security needs grow and change. As such, it’s not as important to pick the ‘right’ solution but to pick the ‘best-fit’ solution and implement it early enough to be a part of your operational culture.

In conclusion, cybersecurity is essential for startups of all sizes. By scaling their cybersecurity along with the business at an early stage, startups can build an unfair advantage over their competitors as they’re able to lower risks, comply with regulations, and build trust with customers and investors.

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