Today’s enterprises have thousands of tools to choose from when it comes to building their tech stack. For B2B SaaS vendors, there’s a growing need to stand out from the competition by refining the market fit of their products, tailoring their marketing efforts, and consistently building trust. Not doing so can leave millions of dollars worth of contracts on the table — and that’s a risk scaling SaaS vendors can’t afford to make.
So, how do you build trust?
Achieving trust through SOC 2 compliance
With enterprises under more pressure than ever to abide by industry regulations and security standards. Plus, they have a responsibility to their shareholders to protect their assets from data breaches and other cybersecurity concerns. As a result, they’re looking for vendors that understand the current threat and regulatory landscape. They want to partner with software providers that are as interested in upholding security best practices as they are, and they need to be able to see that commitment early on in the sales process.
For vendors that are likely to process, manage, or store sensitive customer data, a great way to earn this trust is by achieving SOC 2 compliance. The SOC 2 standard has become the de-facto compliance program that enterprise clients lean on. This compliance process requires company leaders to have practices and systems in place to prevent data breaches, respond properly after breaches occur, and install alerts and tracking systems that reveal the who, when, and why behind any access gained to privileged files.
Being SOC 2 compliant means there is a process for everything your employees do, and everything is auditable. You may have the best internal security team, but if your processes aren’t documented and auditable, then they can’t be fully trusted.
When to start with SOC 2
There is a strategic element around choosing when to go through your compliance journey. Waiting too long can ultimately lead you to lost opportunities with recognizable brands that could further grow your business. Plus, it’s important to note that SOC 2 compliance is not a simple and quick task — documenting processes can be much more time consuming than you imagine, getting consensus is challenging, and the larger your business is, the more complex it becomes.
In our times as advisors for companies seeking SOC 2 compliance, we’ve observed two different types of businesses:
- The ones that think ahead and start compliance early, as a parallel track to their product development.
- The ones that decide to become compliant when the enterprise client is knocking at their door.
Knowing that it takes anywhere from six–18 months to be ready for an audit, which type of business do you think misses out on most opportunities? (Spoiler alert: it’s the second one.)
As an entrepreneur, you know that each round of funding has its own value. Seed funding helps you define your MVP and Series A helps you turn your MVP into a valuable product with market fit. With Series B, you’re looking to consolidate your team and reach up to $10 million in ARR, and at Series C, you’re accelerating growth to up to $100 million in ARR. Now, would you rather close $10,000 deals or $100,000 deals on your path to $10 million?
A SOC 2 report is your gateway to larger deals, so the time leading into your Series B funding is a great period to start your compliance journey.
What it takes to get it right
A shared commitment to trust, integrity, and respect for sensitive data starts from the ground up, and building this culture is a process that starts on day one. Before company owners begin an extensive hiring process, they should recognize that established SOC 2 compliance sends a strong message that will influence the culture at every stage of the company’s growth. The longer hiring managers put this off, the harder it will be to ingrain this principle in new staff members.
If you’re a scaling software vendor that’s starting to target enterprise clients, your best bet in becoming a trusted vendor will be to complete your SOC 2 compliance journey. Regardless of what your ultimate goal is — whether it’s long-term growth, a public offering, or a sale — compliance with industry recognized standards will be a massive step in the right direction.
Need help getting started with your SOC 2 journey? We’d love to help. Get in touch so we can chat about your goals.