Most startups don’t have a Chief Privacy Officer, instead relying on outside advice from external counsel or a privacy consultant. In Startup CXO, our Chief Privacy Officer from Return Path, Dennis Dayman, strongly advocates for privacy to be baked into a startup from the very beginning. Some startups probably don’t have any help in this area at all, but given the importance of privacy and security issues today, that’s a mistake.
If your startup doesn’t start life with a Chief Privacy Officer, you’ll have to heed some warning signs—here are some I’ve picked up over the years.
First, you’ll know it’s time to hire a Chief Privacy Officer when you wake up in the middle of the night, terrified that you’re going to find your company on the front page of the newspaper or served a subpoena to testify before Congress about a data breach. Even if you’re not waking up in the middle of the night, you might be concerned about privacy if you are spending too much of your own time trying to understand what PCI Compliance, or HIPAA, or GDPR means to your business. Or if you really don’t see the connections between your business and privacy issues in general, then a Chief Privacy Officer can be very helpful.
You might also get tough questions from your board on what your data breach client communication plan is, and if you don’t have a great answer and aren’t sure how to get to one, then it’s time to think about a Privacy Officer.
A fractional Chief Privacy Officer may be the best option for most startups… forever. Sometimes you can find one fractional executive for both the Privacy and Chief Information Security Officer roles. You probably can’t get by without a full-time leader in this area if you are large (>$50mm in revenue) and are sitting on a massive amount of consumer data, especially if that information involves PII, financial, or health information. But if that’s not you, a fractional Chief Privacy Officer may be the way to go. While a fractional executive is similar to an outside lawyer or consultant, an executive has a company title for external credibility and the personal commitment to the organization to ensure compliance. A fractional executive is way more than a consultant, since they’ll be able to provide guidance to employees and represent the company as if they were a full-time Chief Privacy Officer.
Not every startup needs a Chief Privacy Officer, since you can often cover your bases with lawyers or consultants, but if you’re collecting lots of data from jurisdictions across the world, you’d be wise to get a Privacy officer or a fractional executive sooner rather than later.
-Matt Blumberg, April 12, 2023.