Encrypt from Day One: Data Protection for Startups

Before it has funding, a marketing campaign, customers, or even an office, a startup has one all-important asset: information. In fact, you could say that every startup begins its existence as information itself, in the form of a codebase, a blueprint, a business plan, or some other form of intellectual property. As a company grows, it will collect vast amounts of new information in a variety of forms—customer data, transaction records, plans for additional products—all of which are critical to its survival and success.

Unfortunately, few startups recognize just how much protection their data requires. A strategy based on network and device security, no matter how sophisticated it might be, simply isn’t enough to keep data secure. Companies that fail to encrypt their data are taking an unnecessary risk that can rob them of their ability to grow and compete.

Persistent encryption is becoming the new standard for data protection, and startups who hope to make it out of their development phase need to be on the forefront of this shift, not behind the curve. No other technology can keep data safe from the hackers, spies, and careless employees who will inevitably get their hands on a company’s sensitive information.

Real protection for intellectual property

A typical startup guards its intellectual property with obsessive intensity, and with good reason. The better a company’s idea is, the more quickly competitors will shift gears (or spring into existence) in an effort to beat it at its own game. The problem is that startups typically protect their data by attempting to control the number of people who can access it, rather than controlling whether people can read it once they have it.

Even a company operating in stealth mode needs to share information from time to time, and that’s where the trouble can begin. No matter how many layers of access control a startup uses internally, once data begins to travel, there’s no way to control who’s going to copy it, back it up on a cloud drive, or save it on a USB drive which they’ll accidentally drop in a parking lot. If employees or partners don’t expose a startup’s data, hackers and industrial spies are there to do the job.

This is why persistent encryption—which remains with data even when it’s copied or transmitted—is so important. Other forms of encryption, like full disk encryption, disappear once data is moved off the encrypted device, leaving information accessible to anyone who has a copy of the file. Persistent encryption renders data unreadable to anyone without the decryption key, whether the data is intercepted in transit, copied from a device, or downloaded from the cloud.

Who can you trust?

Not only are startups completely dependent on the security of their information, they’re particularly likely to have their data compromised (intentionally or not) by their own employees. The unique conditions that make startups so exciting also create a perfect storm of data protection risks:

  • Lack of IT infrastructure: Network and device security are a starting point for data protection, not a complete solution, but many startups lack the resources and expertise to implement even a basic level of security. By using encryption, new companies take the risk out of their shaky IT infrastructure, because even if (when) hackers make it into a their systems, the stolen data will be unreadable.

  • Unstructured, decentralized teams: While a company might begin with a few people in a basement or garage, sudden growth means adding new team members, often including contractors, consultants, and employees in other cities. What was originally a close-knit group is suddenly a collection of virtual strangers, each doing their work in their own way. Add to this the fact that many startups are staffed by recent college grads who may be unused to dealing with large amounts of sensitive data, and it’s easy to see how information can get lost, misdirected, or shared inappropriately. With the right encryption software and a well-thought-out encryption policy, startups can support rapid growth without sacrificing control of their data.

  • Volatile relationships: The prospect of overnight wealth often creates rifts among startup teams and occasionally leads to claims of outright theft. One high-profile example is the ongoing dispute over Pinterest, in which an entrepreneur claims that a former investor stole his code and business plans and handed them over to the founders of the billion-dollar social site. PKWARE’s Smartcrypt uses Smartkey technology to help companies protect themselves against theft by insiders. With Smartkeys, companies can revoke access to encrypted information at any time, even for a former employee who may have kept copies of encrypted files.

Planning ten steps ahead

Consumers and regulatory bodies are growing less and less tolerant of data breaches. No company wants to face fines, lawsuits, and bad press, but when a startup loses customer data, the damage is especially severe. How can a company hope to move forward when it gets its first broad media coverage for exposing its customers' personal information?

Whether they hope to be acquired, go public, or become the next Silicon Valley unicorn, startups have every reason in the world to encrypt their data. Companies that encrypt their data are more likely to be appealing to investors, less likely to alienate their customer base, and better able to compete in Europe and other jurisdictions that are beginning to regulate data protection.

Because their business processes are a clean slate, startups are especially well positioned to implement encryption. Encryption not only ensures that there is no unprotected data in circulation internally or externally, it helps build a culture of awareness and caution that can make the difference between long-term success and sudden failure. The earlier a company starts to protect its data, the faster it will be able to grow without losing control of its most valuable asset.

PKWARE’s Smartcrypt helps companies in every industry secure their sensitive data and their reputations. Learn more about how Smartcrypt can protect your business today.