Why Compliance is your startup's secret weapon
Check back next week as Caffeine brings you the first in our brand new video series
Happy Friday!
Kia ora Caffeinators,
Instead of our usual weekly look forward, thought we’d bring you the first in our partner series with our friends over at Vanta all about the 101s in the often overlooked world of compliance.
Next week we’ll kick off off with a trio of videos breaking down what it is, why it’s important to get it right and where the world of compliance is heading in future.
As always, thank you to everyone who has upgraded to a paid subscription or simply recommended Caffeine to friends and whānau. We couldn’t do any of this without you.
Finn and the CAFFEINE team
For many founders, the word "compliance" conjures images of endless paperwork, bureaucratic red tape, and a drain on precious resources that could be better spent on innovation and growth.
Full disclosure, before I sat down to do this series with Vanta I had only the haziest idea of how compliance really worked.
I thought it was one of those mundane but important bits of box checking bureaucracy that you did alongside all the really exciting stuff.
But what if compliance, far from being a drag, was actually the unlock to your startup's biggest ambitions?
This is the argument put forward by companies like Vanta, who are on a mission to make compliance accessible and efficient for the next generation of disruptive startups.
When I sat down with GRC Subject Matter Expert Evan Rowse from Vanta for a chat, I started by asking if the analogy of compliance as WOF for your car, ensuring it's roadworthy and won't get you in trouble, is a useful starting point.
Using the car analogy, Evan explains: "If our car is the startup then yes the requirements in that industry is that you have things like brakes on the car. Compliance is like the WOF rules which say based on the weight of your car, here's the minimum specifications of the brakes you need."
Evan breaks core compliance down into three core concepts:
Keeping track of the regulatory landscape to identify the applicable mandatory regulations and voluntary standards
Implementing the controls necessary to comply with the selected regulations and/or standards
Update controls according to regulatory changes and bridge compliance gaps as they appear
However, Evan quickly expands on this, highlighting that "compliance really exists as an industry because historically organizations have been pretty poor at doing risk management."
Industries, driven by profit, often see compliance as an afterthought, something imposed by regulators only after problems arise, like cars crashing, leading to safety regulations.
Having a proactive approach to risk management is central to Vanta's philosophy.
Ultimately, he explains, founders should be asking themselves: "Do I trust my own business and product? And can I demonstrate that trust outside in the market so that people will effectively buy my product?"
This isn't just about adhering to rules; it's about fundamentally building a trustworthy business and then demonstrating that trust.
Before diving into specific regulations, founders are encouraged to consider the human element.
Evan suggests: "Thinking about their product, and the impact to society with what you’re providing. I've got my product, which people are gonna buy. Maybe you're B2B, maybe you’re SaaS, maybe you’re Deep tech but it’s about that core question - what's my impact on society?"
This introspective question is crucial, especially in the age of rapidly emerging technologies with equally rapidly emerging regulatory frameworks.
Automating the Baseline, Unlocking Ambition
So, how does Vanta solve these complex challenges for startups? A core offering is its compliance automation product, which Evan explains makes it a lot easier for a business, especially a small business, to go and get a ISO 27,001 certificate which is signed off by an external third party.
This certification is internationally recognized and demonstrates that an organization has implemented a systematic and documented approach to managing sensitive information and mitigating information security risks.
Traditionally, achieving these certifications would take hundreds of hours and significant resources. Vanta drastically reduces this effort, by helping businesses meet minimum standards.
The key differentiator is scale. Before compliance automation, ISO certifications were primarily for large organizations with hundreds of employees.
Now, Vanta enables businesses with just five people to achieve compliance. "We're taking all of that guesswork and to get you complying with minimum standards on the frameworks we sell. So we've been incredibly successful in ISO 27,001."
Vanta aims to change the conversation around compliance, moving it from a perceived burden to an efficient process. Evan hopes that "because compliance management is all about minimum standards, work should be kinda easy to do, set, and forget."
This allows businesses to focus on broader problems like security and privacy. By automating the checkbox compliance, Vanta frees up valuable time and resources for more complex risk management.
However, it's a common misconception that strong compliance alone will prevent all issues.
"Many of those organizations that have had public breaches or issues, had really strong compliance functions,” notes Evan. Minimum compliance sets the baseline, but true security and privacy require ongoing vigilance and addressing root causes.
Perhaps your business might be meeting minimum standards but without a more holistic approach to risk management, sometimes founders might just be addressing issues as they occur without considering what about their product or service allowed that issue to occur in the first place.
"A system like Vanta will pull in compliance metrics for you to identify,” says Evan.
“When you identify things that are out of compliance, the easiest thing is to fix the compliance issue. Sometimes the hardest thing to do is to fix the root cause that led to that issue."
The Global Stage: Lowering the Barrier to Entry
For founders with global ambitions from day one, compliance can feel like an insurmountable hurdle, a "constantly shifting web of compliance and regulatory framework worldwide."
Vanta addresses this head-on by offering a set of 40 global regulations within its platform.
"The reason you're purchasing a software is to cut the complexity of doing that yourself. Traditionally, you would have to employ a lot of lawyers and teams to try and figure out what you should do," says Evan.
By simplifying this process, Vanta provides a competitive edge to allow small businesses to act like the big businesses they aspire to be. Startups can demonstrate trustworthiness, even against established players.
"You've never heard of me. You've never heard of our product. But here is how you can at least trust us with the type of product that we've got," says Evan.
Ultimately, Vanta's value proposition extends beyond mere risk mitigation. It's about democratizing ambition for founders.
Imagine a startup with a groundbreaking medical device idea. Previously, the sheer cost and complexity of medical compliance would deter them. With Vanta, that barrier is dramatically lowered.
"If we were able to magically decrease that cost even from a million to 200k, for certain frameworks. That's night and day for a business to say, actually, I'm gonna target that industry."
This shift enables a new wave of innovation, allowing startups to confidently enter highly regulated sectors like healthcare and finance. Evan says Vanta’s vision is seeing founders able to enter these markets
“Just look at the type of emerging businesses that we have in places like health tech, fintech and biotech. These businesses that they have started are entering complex markets and the unlock we want to see is even more businesses emerge and sell really innovative, category changing products."
With the right compliance solution you’re building the kind of verifiable trust which unlocks the freedom to innovate.
By making compliance manageable, they empower founders to pursue their most ambitious ideas, fostering a future where ground-breaking technologies are not stifled by regulatory burdens, but instead, flourish within a framework of trust and responsibility.
Check back in the weeks ahead as Caffeine brings you a video series, Compliance 101, breaking down everything you need to know as a founder about the current compliance landscape and where it’s heading next.