Beyond the Badge: Why Security Certifications Aren’t Enough
Introduction
A quick scroll through any startup’s website will likely reveal a row of security ‘trust badges’: ISO 27001, SOC 2, GDPR. These certifications signal that a company takes security seriously. They offer a certain directional assurance, but here's the uncomfortable truth: having a badge and being secure are not one and the same. Compliance frameworks are a valuable baseline, but they are ultimately insufficient guarantees of robust security or good governance. To see why, we need only look at a sobering cautionary tale from the startup world—the Drizly breach.
The Drizly Breach: A Tale of False Confidence
In 2020, the alcohol delivery startup Drizly suffered a breach exposing the personal data of 2.5 million customers. This was no unforeseeable event. The company’s leadership had been alerted to security problems two years earlier when an employee accidentally leaked cloud credentials on GitHub. Drizly’s response was to patch the immediate hole but failed to implement broader fixes. Critical safeguards were still missing: the company didn’t require two-factor authentication, lacked written security policies or training, and neglected to monitor its networks for intrusions.
What makes the Drizly story so striking is the vast chasm between its public assurances and its internal reality. The company’s website claimed to have "appropriate security protections" and "commercially reasonable" practices in place. Their trust signal was a promise on paper, not backed by operational diligence. Regulators, naturally, took notice. The U.S. Federal Trade Commission (FTC) stepped in, confirming Drizly’s security lapses. In 2022, it took action against both Drizly and its CEO for the company’s "carelessness."
The FTC’s order was a remedial checklist for Security 101, requiring Drizly to implement a comprehensive security program. More notably, the FTC also imposed a decade-long security probation on CEO James Cory Rellas, binding him to install robust security programs at any future company he leads that handles consumer data. This personal liability for a CEO was unprecedented and sent shockwaves through the startup community. The message was clear: a cute padlock icon on your site isn’t enough. You will be held accountable for actually delivering on your promises.
The Limitations of Frameworks
Drizly’s saga encourages a closer look at those very badges companies pursue. While valuable, these frameworks are not complete guarantees.
ISO 27001 is a risk-based management standard. Certification means an auditor has vetted a company’s Information Security Management System (ISMS) and found it to meet the standard’s requirements. But as one compliance expert notes, "It is a risk-based system so it does not guarantee security." The certificate itself is a one-page document; it offers no insight into specific controls or weaknesses. A company can proudly display its ISO 27001 flag while serious problems smolder beneath the surface.
Similarly, not all SOC 2 reports are created equal. The booming demand for SOC 2 has led to a rise in "check-the-box" auditing. Some industry observers have noted a decline in audit quality, with cheaper firms churning out superficial reports that satisfy the letter of the criteria but provide little substance. The very trust mechanism SOC 2 was meant to foster is being undermined by this inconsistent rigor.
Even when done properly, these audits have inherent limits. They examine controls at a snapshot in time. A company can pass a Type II audit, for example, and then deploy new systems the very next month that introduce vulnerabilities. We saw this with the infamous Target breach in 2013; the company had passed its PCI DSS assessment just weeks before hackers broke in. The breach still happened because an external audit is a snapshot, and critical gaps were left unaddressed afterward. Security, like physical fitness, requires continuous effort, not a one-time check-up. As one advisory firm bluntly stated, "Compliance does not equal security. Compliance is a byproduct of good security practices,” not a substitute for them.
Beyond Baselines: A Call for Diligence
None of this is to suggest that frameworks like ISO 27001 or SOC 2 are useless. They are incredibly helpful if treated as the beginning of a security journey, not the end. The mistake is believing that once the certificate is on the wall, you’re "fit" forever. Good governance in security means integrating these frameworks into a broader, living risk management strategy. It means leadership asking, “What are we actually doing day-to-day to manage our top risks and protect our customers?”
In practice, this means addressing security holistically. When an incident occurs, don’t just fix the symptom—dig in and strengthen the entire area of weakness. It means empowering a qualified security leader to own and evolve the program. It requires investment in tools, training, and people, not as a one-time project, but as an ongoing budget line item. Most importantly, it means cultivating an honest security culture where staff genuinely embrace best practices.
Conclusion: Earning Trust Beyond the Checkbox
For startups and enterprises alike, the lesson is simple: security frameworks are valuable tools, but they are not a panacea. The story of Drizly shows that a company can point to all the right signals and still fail to protect customers when it matters most. Startup leaders should resist the allure of viewing compliance as a mere sales checkbox. Instead, approach these frameworks as stepping stones toward a mature security posture.
Ask the hard questions: What do our audits not cover? Where could our controls fail? How do we verify that our “trust signals” reflect the truth? Trust signals have their place, but a logo on a slide deck is worth very little without the substance behind it. In a world of increasing cyber threats, those who conflate the symbol with the substance will learn the lesson Drizly did—the hard way. It’s far better to proactively ensure that your security reality lives up to the promise. In the realm of trust, actions will always speak louder than audits.