Whatsapp is the latest example of what non-compliance could mean. They failed to comply with the Transparency Principle and now are facing a €225 million fine. We created this article to help you, investors, to avoid the €225 million WhatApp with their next investment.
Since the GDPR came into effect, any business that comes in contact with EU citizens’ personal data needs to comply with it. If giants like Amazon, Google, and Facebook are still having a hard time being fully GDPR compliant, imagine the challenges startups are facing to build new business models.
Now more than ever, startup investors can’t afford to be ignorant of the legislation. They must see GDPR compliance as part of the early business strategy.
Investors Should Analyse the Business Viability
For example, new business ideas that heavily depend on targeted and retargeted advertising or data brokers will have a hard time achieving sustainable growth.
3 Ways Investors Can Analyse A Business Viability
- The business development strategy the startup uses or proposes to use and whether it will fall into the scope of GDPR and any other privacy regulations.
- Understand what data the startup collects and why it is collecting it.
- Address if they have the framework required to create and implement a privacy program, which will protect the business while fueling growth.
Business Innovation and GDPR as a Strategic Advantage
Data protection regulations can either stimulate or, constrain innovation if poorly implemented by the company. That is why it is essential to analyze every aspect of the business development strategy to address data risks and future-proof the business model.
Data Protection Benefits
As a counterpart, GDPR can have many benefits for new businesses and innovation. Ensuring GDPR compliance is not only to avoid heavy fines but can also help build brand reputation.
Consumers are getting more and more concerned about privacy and how their data is used. Businesses that respect privacy gains the trust of their consumers. When they feel confident that they have more control over their personal data, they see a business as trustworthy, which can lead to growth and investment return for the long term.
Need more insights on how to include data protection principles as a business strategy? Get in touch with us today for a free consultation!