What’s the Right Cyber Security Investment for Startups?
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With so many moving pieces at a startup, it is easy to put internet security at the bottom of the list. In fact, many startups base their cyber security budgets on emotion and guesswork.
However, a better strategy is to research your company’s data risk tolerance and invest accordingly. This investment—putting data security first—is vital to many companies’ success. Over half (55 percent) of small and mid-sized businesses surveyed by the Ponemon Institute reported being hacked which cost them $879,582 on average.
Every company is different and should approach security concerns differently. To understand your security needs, review what you could lose in a worst-case scenario to better gauge how much you should invest in cyber security. Even better, you can determine what cyber security areas require investment and what is better served with proactive measures.
Framing Your Cyber Security Narrative
Many startup entrepreneurs determine their IT budget by assessing how much of their overall budget is available for cyber security. However, this method is far from an accurate or helpful way to understand security needs.
Instead, cyber security experts recommend that entrepreneurs assess exposure to risks. As Michael Graham, Senior Manager of Security at Box, explains, “For all companies, there’s a limit to how much money can be lost. So if you’re spending more than that amount, you’re absolutely screwing up.”
Graham continues, “There’s also a limit to how much money you’re likely to lose based on what it is you do with customer data and what you do to monetize it. You’re also messing up if you spend more than that amount.”
Every company has a unique limit of how much they can afford to lose in the event of a cyber breach. There is also a limit to how much an enterprise might lose due to a network compromise based on the amount and type of data that it houses. If your spending exceeds these limits, you are overspending on network security.
There is no way to make your network 100 percent bulletproof. Instead, entrepreneurs should focus on the ongoing process of determining risks and adjusting their cyber security investment.
To start the process, business leaders should set up an annual system to regularly estimate the outcome of a network intrusion. By understanding your evolving tolerance for loss, this will reduce your concern regarding what you will do if a cyber attack takes place.
Don’t get too carried away in creating a worst-case scenario—in fact, it is important to balance security with pragmatism. Do not allow cyber security to consume your focus to the point where it distracts you from your primary objectives.
Developing a Security-First Culture
IT departments are still recovering from an era where management and employees viewed cyber security as an expensive barrier to progress. Businesses invest a Herculean effort into engaging, selling, and retaining consumers. The same effort needs to be invested in cyber security practices.
Most employees briefly think about a worst-case scenario, then shrug off the thought and continue with their work. As a leader, it’s your job to change this circumstance.
For instance, you can teach your employees about trust decisions during training. This training will make workers more cognizant of their actions when they are exposed to the tactics of malicious actors.
In this environment, employees would—for instance—flag suspicious emails for IT review, rather than responding to them and potentially exposing the network to an intrusion.
When employees are informed about cyber security, startups win. Entrepreneurs can then devote more of the IT budget to highly technical network issues and security rather than putting out fires.
Encryption technology like VPNs is one of the most used tools against threats. “Encryption provides a highly effective way to protect your internet behavior, communications, and data,” ProPrivacy.com Cybersecurity Expert, Douglas Crawford, explains. “If a lot more people start to use encryption, then encrypted data will stand out less, and hackers’ jobs of invading everyone’s privacy will be much harder.”
If you teach staff members to remain watchful for malicious activity that could compromise the company network, you can eliminate many security risks. If employees are more security conscious, your IT department or consultant can spend less time working on emergencies.
The Future of Cyber Security Risk Management
As cyber security emerges from its early stages, IT experts are drawing on the knowledge of other industries. Relatively recently, IT professionals have learned a lot from insurance professionals. Although technology leaders cannot forecast a cyber attack, they can stay informed about the current risks and predict likely threats.
IT professionals are now taking advantage of statistical analysis to assess network risks. For example, statisticians now enable IT security teams to evaluate the effectiveness of various cyber security measures. The cyber security field is very close to reaching the ability to quantify risks, and over the next decade, IT leaders will improve their ability to forecast cyber threats.
Experts recommend that startups initially take small steps in bolstering network security. Once a company hires 30 people, it’s time to consider hiring one.
Today, risk assessment is an abstract concept. Protecting tangible assets is one thing, but protecting intellectual property is an emerging field. In the future, IT professionals will have the ability to assess IT investment in terms of losses due to compromise or savings due to effective network security.
While it’s essential to establish an ongoing system for assessing data security risk tolerance, it’s even more important to remember to seek the input of stakeholders.
When assessing your company’s tolerance for risk, you should communicate with both technical and non-technical personnel. By keeping the lines of communication open about cyber security, you’ll foster a corporate culture that puts data security first.
For now, knowledge is the best defense against cyber threats. As an entrepreneur, it’s in your best interest to develop a realistic assessment of your risks and needs.
