How This Overlooked Risk Can Collapse Your Startup Overnight

Bill Gates once said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

Startup founders rarely think of their companies as inefficient, due to the many tasks they must juggle at once and the necessity to keep pace with rapid technological trends, but their engineering culture often is. While such founders focus on things like rapid iteration and minimum viable product (MVP) launches, they often overlook the fundamentals of secure development.

This is why the real cybersecurity threat facing startups isn’t hostile foreign actors or futuristic artificial intelligence exploits; it’s the culture of prioritizing speed, which is quietly reducing security effectiveness until one untested function, dependency or access control flaw brings everything crashing down.

Related: Weak (or Nonexistent) Cybersecurity Is Taking a Massive Toll on Small Businesses. Here’s How to Protect Yours.

Startup culture often prioritizes speed over security

Startup culture tends to thrive on velocity, as its members remain committed to development and up-to-date on technological innovations. The success of internal teams is measured by factors like rapid iteration and short-term growth metrics. Additionally, product delivery is rewarded, while security is treated as something that’s nice to have, but not necessarily essential. Unfortunately, the lack of focus on security can create blind spots, leading to systemic weaknesses.

It’s quite common for developers to lean heavily on unverified open-source libraries, copy-pasted code from forums or GitHub and legacy dependencies with known exploits. Continuous integration pipelines often skip security testing altogether. Few startup companies set aside time or budget for security measures, including code audits, threat modeling or even the adoption of basic secure coding standards.

Such procedures can create structural fragility, leaving companies more and more vulnerable to security failures, the more they progress in other areas. The code that powers tomorrow’s unicorns is often an unsecured patchwork, where security debt grows faster than technical debt.

One step away from collapse

After having witnessed the results of thousands of audits over the years, I’ve begun to notice recurring patterns, many of which inevitably lead to company failures. For example, reused code that isn’t properly audited can lead to critical vulnerabilities. Backdoors slip into production — sometimes unintentionally, sometimes not. Insecure access control can allow anyone with the right information to access and manipulate core systems.

Startup culture has convinced itself that rapid innovation is survival, but truthfully, many of these companies are steps away from complete collapse due to their lack of security procedures. And these collapses can be triggered by a single insecure function or compromised third-party dependency, resulting in multi-million dollar losses in minutes.

Related: Your Company’s Security Strategy Has a Glaring Hole. Here’s What’s Causing It — and How to Fix It.

Misplaced trust: Developers aren’t trained for security

It isn’t realistic to expect developers to be security experts, yet startups routinely operate as if they are. Upon completion, code can be put into production with not much more than a stamp of approval from an executive — and without formal review.

Many Web3 startup founders and even engineers often lack a solid understanding of security or the potential risks in their systems, including code risk, oracle risk, operational risk and compliance risk. They tend to believe that, as long as the code is well written, these issues won’t exist. In reality, however, security concerns are not equivalent to code quality.

In our experience at CertiK, many clients’ engineers are reluctant to engage with security researchers, viewing security findings as unimportant or as challenges to their design and implementation. This resistance or neglect often leads to security issues going undetected or unresolved in a timely manner.

Additionally, most computer science curricula don’t include comprehensive training in secure development, and few engineers have practical experience in adversarial thinking or attack modeling. Even within companies, healthy coding practices tend to be inconsistently enforced. This creates a dangerous situation whereby engineers have control over systems that handle customer funds and private data, but without the necessary education to prevent disasters.

Maintaining accountability with essential infrastructure

Other departments within startup companies are held to very high standards. For example, financial officers prepare for audits, and legal teams face compliance reviews. Developers, however, often operate in an accountability vacuum. This must change if companies would like to succeed in the long term.

To do this, startups should normalize many best practices, such as third-party audits before product launches, using secure coding tools and implementing security training for all engineers, regardless of their specialties. It is also essential to implement protocols such as versioned access control and key management with no single point of failure and distributed code ownership, so that no system rests on the unchecked authority of one developer.

It’s true that implementing these procedures can lead to significant overhead costs, but they are insurance policies on the future success of a startup company, and therefore worth the money. They reduce the likelihood of catastrophic breaches that could sink a company faster than any rapid market downturn.

Related: 4 Reasons You Need Developers With Cybersecurity Skills in All Tech Teams

Changing the trajectory of startup successes and failures

Unfortunately, the startup world is already sowing the seeds of billion-dollar failures. The apps, protocols and platforms being built today will form the backbone of tomorrow’s digital infrastructure. If the foundation is currently insecure, eventual collapse will be inevitable.

Today’s startup founders face a pivotal choice: Continue to treat security as a distraction from growth, or acknowledge it as a prerequisite for survival. The latter path is about maturity, resilience, leadership and long-term sustainability. Just as financial officers and legal counsel are expected to uphold standards, developers must be held to the same level of accountability.

The next generation of startups will either build companies that endure or become tomorrow’s cautionary tales. The difference depends on whether leaders are willing to demand security today — before it’s too late.

Bill Gates once said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

Startup founders rarely think of their companies as inefficient, due to the many tasks they must juggle at once and the necessity to keep pace with rapid technological trends, but their engineering culture often is. While such founders focus on things like rapid iteration and minimum viable product (MVP) launches, they often overlook the fundamentals of secure development.

This is why the real cybersecurity threat facing startups isn’t hostile foreign actors or futuristic artificial intelligence exploits; it’s the culture of prioritizing speed, which is quietly reducing security effectiveness until one untested function, dependency or access control flaw brings everything crashing down.