WEBINAR
“Fail forward” might be the mantra amongst crypto startups, but when it comes to data security, mistakes can come with a devastating price tag. Over the past year, the average cost of a data breach surged to $4.8 million per incident, highlighting just how high the stakes are.
Sure, making mistakes is part of the game when you’re fine-tuning your product or building out your marketing strategy. But in cybersecurity, even a small misstep can have catastrophic consequences, putting your business—and its future—at serious risk. Treating cybersecurity as an afterthought or a “later problem” is a gamble no startup can afford to take.
Wherever you are in your startup journey, this guide will help you build a resilient cybersecurity foundation, protecting your business and ensuring you’re ready for the challenges ahead.
Setting the scene
It’s easy to think cybersecurity is something to worry about later, once your organization has scaled. You’re not alone—recent research reveals that 65% of portfolio companies from top VC funds are highly vulnerable to cyberattacks. Yet, despite the risks, many startups treat cybersecurity as a low priority—even though 60% admit a single cyber incident could lead to bankruptcy or closure.
You might assume, like many startups, that your organization isn’t a tempting target. Surely cybercriminals would prefer to go after bigger, more lucrative companies, right? Wrong. The 2020 Ledger data breach and the 2022 attack on crypto startup 3Commas prove otherwise. Both incidents resulted in massive reputational damage and steep financial losses after hackers infiltrated their systems and stole customer data.
The lesson is this: no crypto startup is too small to be a target. Cybersecurity isn’t a “later” problem—it’s a now problem.
The headwinds to success
Before you embark on building out a cybersecurity problem, it’s first crucial to understand where you are, and the unique challenges you’ll face when it comes to data security.
Typically, these are as follows:
- Remote-first culture: Many startups operate with a ‘remote-first’ approach, with employees and contractors spread across time zones and countries. Collaboration often depends on cloud-based tools like Slack or Microsoft Teams, which can introduce vulnerabilities.
- Limited resources: For early-stage startups, significant investments in cybersecurity tools and infrastructure may not be feasible.
- Lack of awareness: Human error remains the biggest threat to data security, yet most startups lack adequate employee training programs to address this risk.
- Supply chain complexity: Startups rarely operate in isolation, often relying on a patchwork of vendors to deliver their services. Each vendor represents an additional entry point for potential attacks.
- Data leakage: Without a cybersecurity program in place, your startup is likely already exposed to data vulnerabilities or misuse—risks you may not even be aware of.
Your data security action plan
Follow these steps to build out your startup’s data security program.
Take a risk-based approach
A risk-based approach to cybersecurity is tailored to your organization’s unique needs and risks. This approach focuses on pinpointing and prioritizing the most pressing cybersecurity risks, then implementing technical controls to mitigate them. It’s not a one-time fix but a cyclical process that includes continuous monitoring to ensure your controls stay effective as threats evolve and change.
For crypto startups, the biggest risks often revolve around data loss, compromised credentials in cloud-based collaboration tools, and inadequate vendor risk management.
Once you’ve assessed your risks, you’ll need to decide how to treat, tolerate, or terminate them. For example, you might implement cloud-based data loss prevention (DLP) software to safeguard against data exfiltration and leakage in collaboration apps, while also enhancing visibility into vendor communications to reduce third-party risks.
Adopt human risk management software
One of the most persistent threats to cybersecurity is human error. Consider this: if an employee’s Slack credentials are compromised, the hacker could gain access to sensitive data across multiple channels. Or if they accidentally misconfigure a cloud repository, your IP could become exposed to anyone on the internet.
This is where human risk management (HRM) comes in—an automated, real-time approach to mitigating human-based risks. HRM tools work seamlessly within your cloud apps, monitoring sensitive data to ensure it’s handled according to your internal policies. If an employee acts suspiciously or makes an error, the system automatically intervenes—educating the user if it’s a simple mistake, or blocking access and triggering alerts if there’s a serious risk.
The best part? Many HRM tools are no-code, making them easy to implement, even for startups with limited resources. For instance, Polymer DLP combines data loss prevention with human risk management, working directly within your cloud apps to safeguard against human error without adding complexity to your operations.
Look for security tools embedded with automation and AI
When building your cybersecurity strategy, it’s important to keep your security setup nimble. The goal is to select one or two providers that can meet your needs now and scale with you as your business grows. Relying on too many vendors can lead to integration issues, complexity, and, of course, unnecessary costs that quickly add up.
As you evaluate tools to mitigate your risks, focus on solutions that leverage automation and AI. These technologies remove the need for manual intervention, allowing your cybersecurity system to run autonomously—acting as a virtual security team that continuously monitors and protects your assets without constant oversight.
Moreover, the tools you choose should offer a “consumer-like” experience—easy-to-use, intuitive interfaces that don’t require complex coding or technical expertise. After all, cybersecurity shouldn’t drain your team’s time, especially if security isn’t their primary focus. Your tools should streamline risk management, making it simple and automated. This way, you can ensure your security posture is consistently strengthened in the background, while you focus on growing your startup.
Ready to start? Schedule a free demo with our team today, and see how we can strengthen your startup’s data security posture in just minutes.