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3 Lessons Startups Can Learn from the Sony Hack

January 2, 2015

12:30 pm

Recently, the world watched a drama fit for Hollywood unfold before its eyes. There was espionage, dangerous threats, embarrassing revelations, ultimatums, and of course, a rogue nation state behind the sinister plot. And like any great movie, the good guys triumphed in the end.

As the now infamous Sony Hack was discussed in coffee shops and board rooms, three clear lessons have emerged that new companies, who at this moment can hardly conceive of being the subject of such an attack, must heed. It might seem that only big companies need to worry about such things, but in a world where a startup can go from a dorm room idea to a $500 Million valuation in 9 months, your company might be in the crosshairs sooner than you think. Here are three lessons every startup can learn from the Sony Hack:

 

  1. If You Mess with The Bull, Expect the Horns: In the movie “The Interview”, the heroes are sent on a covert mission to kill the despotic ruler of North Korea, Kim Jong Un. Mr. Kim is the sitting Head of State of a notoriously insecure hermit nation state, one known for trying to harm those who oppose or embarrass them. Sony did both, and so the attack should not have been a complete surprise. There are also tales of scrappy startups, like Duck Duck Go, who placed billboards in competitor Google’s back yard, criticizing the search giant’s user policies. As pointed out in the book Traction, provoking big competitors can be a great strategy, but just remember, if you are going to poke the giant, expect a shove in return.
  2. Expect Complete Transparency (Someday): Sony was created in the post-World War II era where the idea of having a corporation’s dirty laundry hung out for full display was unimaginable. That dirty laundry is now on full display, and will negatively affect their business and employee relationships for years to come. Startups today are born into a very different world, where corporate privacy is disappearing at a fast rate. If you govern every action and communication as if your customers and employees are watching, then you will never have to fear the social consequences of having your secrets exposed.
  3. Have a Crisis Action Plan: No management team wants to spend a lot of timing thinking about bad things happening to their company, but as a leader, it’s something you cannot put off another day. Unplanned events like product recalls, a false accusation, or hack can quickly become a crisis. Identifying the process that the company will use to assess the situation and make informed level-headed decisions, in advance, can help you and your company survive the storm.

 

I hope that your company will never face an attack like the one on Sony, but if we take a moment to learn the many lessons that have come from this event, we will be that much more prepared if we are ever cast, albeit unwillingly, in that leading role.

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Gavin McCulley hosts “The Pitch Deck – Inside the Startup Funding Game” podcast available on ITunes and at thepitchdeck.com. Gavin is an active Angel Investor, Startup Mentor, and Entrepreneur living in Charleston, South Carolina. Gavin is the Managing Partner of the Charleston based Early Stage Investment Partnership, Twin Rivers Holdings, whose investments range from digital media, tech start-ups, health care, real estate development, film studios, restaurant chains, educational products, and both commercial and defense manufacturing. Gavin hosts “The Pitch Deck – Inside the Startup Funding Game” podcast. Prior to his current roles, Gavin served as a Logistics Officer and Commander in the 7th Special Forces Group (Airborne), and served 2 tours of duty in Iraq and 1 tour in Afghanistan where he was decorated 3 times with the Bronze Star Medal.

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