Compliance Doesn’t Have to Disrupt Startup Agility — It Can Boost It

The word “compliance” might make startup founders shudder as they think of onerous, time-consuming processes that bog down their operations. But our expert says modern compliance doesn’t have to be that way.

Written by Mike DeKock
Published on Apr. 26, 2024
Compliance Doesn’t Have to Disrupt Startup Agility — It Can Boost It
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Startups are defined by their fast-paced environments and high-growth potential. The most successful ones rise to prominence in the blink of an eye — Slack went from zero to $1 billion in valuation in just four years. Other founders want to follow that same success path, and the opportunities are even higher for SaaS startups, considering almost half of VC investment went to this industry in 2023.

So, any initiative that introduces friction is a no-go for emerging companies where the sky’s the limit. Many leaders think compliance is such a friction point, a bundle of outdated requirements that decelerate progress and halt innovation. Although these stereotypes aren’t without historic merit, modern compliance has addressed such issues to become a business enabler rather than an obstacle.

Compliance firms understand the growing startup landscape and know agility is at the heart of these companies, so the good ones are taking a page out of the startup playbook and implementing agile processes for themselves. Every company must follow some sort of compliance guidelines, so it’s time the sector debunks some myths regarding timelines, processes, and the business value auditors can provide.

How Are Compliance Firms Empowering Startups?

  • Embracing governance, risk and compliance (GRC) software.
  • Project-based examinations and asynchronous work.
  • Increasing familiarity with startup infrastructure platforms, e.g. GitHub and GitLab.

More on ComplianceHow to Make Compliance a Competitive Advantage

 

Modern Compliance Accommodates Tech-Enabled Companies

The compliance industry isn’t necessarily known for eagerly adopting new technologies. This can be particularly true for large compliance firms supporting big enterprise clients. For them — with hundreds of employees to train and many big clients to worry about — sticking to their legacy processes and procedures is much simpler than adopting innovations in such a rigid industry.

Smaller firms working with small- and medium-sized businesses (SMBs), including startups, have the advantage of researching, testing, and implementing new tools and training their staff more quickly. And, as GRC software companies continue to emerge, many compliance firms have jumped on the technology bandwagon to better service their clients with the speed and agility they need.

These solutions include software that integrates with the startup’s existing security tools, allowing for automated monitoring rather than manual. One dashboard replaces long spreadsheets and email chains. With this, both the company and auditor can access information, make requests, and view evidence.

Compliance firms are also aware it’s nearly impossible for today’s startups to go all-hands-on-deck for the sake of an audit. Slowing down or halting operations altogether for an entire week or more is no longer a viable option. 

Instead, auditors approach examinations like a project in stages with short, demonstrative meetings where companies walk the auditor through their systems and asynchronous work dynamic. The technology takes care of the mundane, repeatable tasks, like tracking test results manually in a spreadsheet or providing print-screens of system configurations, leaving the auditor available to offer better support and the opportunity to add value to a startup’s security program. 

 

Auditors Should Aim To Create Business Value

A big disconnect used to exist between compliance practices and digitalization. So, it’s not surprising that founders believe auditors don’t understand their highly technical business models and, therefore, only look for gaps. This creates friction and perpetuates negative notions about compliance.

Thankfully, compliance firms have realized they can’t stay in the past forever if they wish to be competitive. After adopting technological tools for their operations, auditors are becoming increasingly knowledgeable about the inner workings of tech-enabled companies, shifting their roles into generating value for businesses.

Most small compliance firms are already familiar with platforms like GitHub and GitLab from working directly with them or through their SaaS clients. Having an auditor with this real-world experience can be a game changer in understanding a startup’s infrastructure and business model, allowing the auditor to consult and share best practices.

Moreover, when getting a SOC 2 examination, auditors can help startups refine their operations with compliance processes at the forefront. Perhaps founders haven’t established the best endpoint security tool for their industry or don’t know how to navigate their current one — a step most companies must take to meet the requirements of certain compliance frameworks. Because they work with startups and enterprise companies alike, auditors have the experience to consult and assist in finding the right solutions to meet the needs of businesses of all sizes.

Over the years, compliance firms have put in the effort to bridge the gap between their old-school, time-consuming processes and the agile and iterative processes of tech companies. Now, they’re equipped to match startups with tools that simplify their data security demands, allowing them to focus on improving their offerings rather than worrying about compliance.

Compliance Doesn’t Have to Be AnnoyingCompliance Is a Growth Accelerant for Startups That Get It Right

 

Becoming Compliant Early Is a Business Advantage

Compliance no longer needs to be burdensome and complicated. The perception that it is, however, often stops startups from acquiring examinations from an early stage, or perhaps they simply don’t know at what point it becomes relevant for their business. The short answer is that a company should begin its compliance journey as soon as it has a business model and a customer base.

Why is this? The earlier startup leaders decide to focus on compliance, the easier it will be to build their security program. Smaller, newer companies can scale their practices as they expand more easily.

The key is recognizing compliance is a vital step toward success for SaaS startups, just like hiring a team of developers and UX designers. When they see compliance as a sales enabler rather than a set of boxes to check, they understand the importance and see its benefit. 

This modern approach to compliance translates into a much better experience for both parties. It also results in a more consultative and comprehensive examination, which startups can use as a competitive advantage. Compliance becomes a step toward improving a company rather than pointing out its issues, and auditors’ increased use of technological approaches only enhances business agility.

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