Cyber attackers exploited a weak password used by an employee at KNP Logistics and quickly encrypted the company’s servers, data, and backups. The ransomware ‘Akira’ rapidly drove the company into collapse, leaving 700 people out of work.
The story of KNP Logistics is a stark warning.
According to Verizon’s 2024 Data Breach Investigation report, 43% of the cyberattacks targeted small businesses with fewer than 1000 employees. Besides data loss, the consequences of data breaches include reputation risk and weak investor trust, a nightmare for startups that begin bootstrapped or pre-seeded. In a competitive business landscape, budding startups focus on chasing profits and acquiring customers, it’s digital security that largely remains overlooked.
So, what makes them favourites for such attacks?
The Benefit of Doubt- ‘We won’t be a target yet’
A majority of startup founders feel too complacent to be attacked by hackers due to their small scale, but in reality, they are the most vulnerable. Assets like – data, customer information, and the intellectual property, which are essential drivers of innovation and growth, are highly prone to attacks. Even something as basic as installing and renewing SSL/TLS certificates is skipped, leaving customer data exposed in transit. Inadequate security awareness in employees and financial constraints to deploy security systems form blind spots that are heavily exploited by cyberattackers. They can effortlessly find their next target by scanning the internet for unprotected APIs and GitHub repositories, and misconfigured services.
Types of attacks that startups should be concerned about
Startups should be concerned about the following evolving threats –
Ransomware
A type of malicious software, or malware, that infects systems when they are exposed to unsecured networks. The malware encrypts data, making it inaccessible to users. To retrieve data, the attackers demand a ransom payment in exchange for a decryption key. However, it is uncertain about getting back access to the system after paying the ransom.
Phishing
A social engineering attack that uses communication channels like emails and SMS to lure people into downloading a malicious document or visiting a site and sharing their sensitive information. Attackers impersonate a genuine brand to send emails or messages that appear genuine to readers.
DDoS or Distributed Denial of Service
It attempts to flood your website, server, or network with malicious traffic, making it inaccessible for legitimate users. This results in poor website performance, service interruption and system downtime.
What do Founders overlook in security?
A majority of startup founders perceive digital security as a sophisticated technology that requires complex threat modelling frameworks and full-time security engineers. Let’s understand what founders generally overlook in their security.
-
Weak Backup Strategies and No Recovery Plan
A timely data backup gets the least priority in a founder’s to-do list as it is viewed time -consuming and expensive.
Daily, businesses generate large amounts of data across many environments, including cloud, on-premise, and SaaS. Systems with absence of backup plans remain susceptible to ransomware attacks as they result on unclean and unencrypted data.
Businesses must implement cloud redundancy that protects data loss by replicating data between servers and data centres, offering protection from cyberattacks, system failures, and human errors without interrupting the operational flow.
-
Shadow IT and Poor Access Controls
Unapproved Tools
A BakerHostetler report states that most cyberattacks are caused by human errors. It may not be deliberate, but threats do arise when employees carelessly plug in their own phones, notebooks, storage devices, or download certain applications from your network. These application installs or file downloads can secretly insert malware that can remain hidden in systems without being noticed. Businesses should train their employees about the dos and don’ts of file or application downloads and establish security guidelines. Strong admin controls in place can prevent staff from downloading any application or tool.
Password Practices and Shared Access
Digital systems and tools rely largely on passwords to secure data and deny access to unauthorized users. But vulnerabilities increase with shared logins or weak passwords across teams. Through this, hackers get access to the database to extract sensitive information. Enabling two-factor authentication on shared account reduces dependence on password as the only security checkpoint. Startups often overlook certificate renewal, causing SSL errors and security warnings in sites.
-
Delayed Security Updates and Patch Fatigue
Businesses fear downtime that causes delay in security updates. This delay can make systems outdated exposing to risks such as data theft and unauthorized access.
Regular software or plugin updates ensure secure systems, as updates involve security patches that can thwart malware, fix bugs, align to the evolving technology landscape, and improve overall user experience.
Instead of delaying or postponing updates, enable your systems with automated patching and planned downtime, freeing them from any disruption to operations.
-
Blind Spots in Third-Party Tools and APIs
When startups purchase digital products like – SaaS tools and third-party APIs, cybersecurity is not given much importance. Since businesses are dependent on such platforms, attackers exploit weak API protections to send malicious requests resulting in unauthorized URL redirects, access to information, and data interception.
To mitigate such problems, startup founders should make a list to identify and track shadow APIs. One should diligently check API documentation for endpoints, functionality, data types handled, and security controls applied.
Besides, make sure that the third-party service implement SSL/TLS encryption to secure data in transit. Also, regularly monitoring SLA metrics like uptime and timely renewal of certificates can help you mitigate potential risks.
Don’t Wait for Attacks, Build a Security-First Culture
Cybersecurity remains one of the critical IT investments that startup founders need to make. One does not need a high-end information security team, but a discipline to secure business data. Start by creating a list of cost-effective cybersecurity measures, such as implementing GitHub branch protection, enabling 2FA, timely data backups, setting login attempts, managing access controls, and anti-virus firewalls etc. Additionally, businesses can opt for security-as-a-service, where they can pay for the security services used without burning a hole in their pocket. Investors favour investing in startups with strong data security measures as it builds customer trust, enhances business valuation, ensures compliance with regulations, and is safe from financial, legal, and reputational risks.
