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ISO 27001 for Startups: When You Need It and How to Keep It Small

When a startup actually needs ISO 27001, how it compares with SOC 2 for early-stage companies, how to scope a first ISMS to one product, and what auditors expect from a team of ten.

Bip Thelin4 min readPublished

A startup needs ISO 27001 when buyers ask for it, which in Europe and much of Asia means mid-market and enterprise procurement, and increasingly when a regulated customer treats you as a critical supplier under NIS2 or DORA. US buyers more often ask for SOC 2, and many startups eventually need both. The way to keep it small is a narrow scope, one product and the people and systems that run it, a risk assessment that fits on a page, policies that describe what you actually do, and controls inherited from your cloud provider where the shared-responsibility model allows. A team of ten can be certified: the standard does not scale its requirements down, but it does let you scale the ISMS to the organisation.

ISO 27001 was written for any organisation, and most of its text reads as if for a large one: top management, interested parties, audit programmes. Startups read that and either put it off or over-build it. Both are mistakes. The standard scales down well if you let the scope and the risk assessment do the scaling, and the certificate opens doors a ten-person company cannot open any other way.

When a startup actually needs ISO 27001

  • A buyer's procurement requires it. In Europe, the Nordics, the UK and much of Asia the ISO certificate is the default proof of security, and the question arrives in the security questionnaire of the first mid-market or enterprise deal.
  • A regulated customer treats you as a critical supplier. NIS2 and DORA push essential entities and financial firms to assess their suppliers, and an ISO 27001 certificate is the evidence they ask for first.
  • You sell to the public sector, where tenders name the standard.
  • You are raising from or selling to organisations that have it themselves and expect it of their vendors.

If none of those applies yet, build the controls anyway, because they are the same ones you will need, and certify when a deal depends on it. The ISO 27001 and SOC 2 comparison covers which document your market expects, and SOC 2 for startups the US-buyer side of the same decision.

Keeping the first scope small

Clause 4.3 lets you define the ISMS boundary, and the certificate prints it. For a startup the right first scope is the product customers are asking about: its development, hosting and support, the people who do that work, and the systems it runs on. A second product, an internal tool or a subsidiary can wait for a later audit. Write the interfaces down, especially the cloud provider and any outsourced function, so the auditor sees what is inherited and what is yours. The scope article covers the statement itself.

What auditors expect from a team of ten

What the standard requiresWhat it looks like at ten people
Top management commitment and roles (clause 5)A founder owns the ISMS, signs the policy and attends the management review; one engineer owns the technical controls
Risk assessment and treatment (clause 6)A register of a few dozen risks against the product, its data and its providers, with a founder as risk owner
Statement of ApplicabilityAll 93 controls decided; physical and outsourced-development controls often excluded with reasons; cloud controls partly inherited
PoliciesA short set, often ten to fifteen pages in total, describing what the team does, acknowledged by everyone
Competence and awareness (clause 7)A yearly awareness session and onboarding, recorded per person
Internal audit (clause 9.2)One audit a year by an outside auditor, because nobody inside is independent of the work
Management review (clause 9.3)A ninety-minute founders' meeting against the clause 9.3 inputs, minuted
Evidence that controls operate (clause 8, Annex A)Records collected from the identity provider, cloud, code and device systems as controls run

Where the time goes

For a small, cloud-hosted team the ISMS can be built in a few months, and the audit stages then add the calendar time the timeline article describes. The long parts are the ones that need other people: the risk assessment, which needs the founders' decisions; the operating period, which needs the controls to have run; and the certification body's schedule. Start the conversation with certification bodies early, because the lead time for audit dates is often longer than the time to prepare.

Mistakes small companies make

  • Buying an enterprise policy template set and adopting it unread, so the policies promise committees and processes that do not exist.
  • Scoping the whole company when buyers asked about one product.
  • Having the founder who built the ISMS do the internal audit, which fails the independence test.
  • Treating physical controls as not applicable without a reason, when the real answer is that the office is serviced and the data centre is the provider's.
  • Collecting evidence by screenshot the week before Stage 2.
  • Setting objectives that cannot be measured, so the management review has nothing to review.

After the certificate

The certificate is valid for three years with a surveillance audit each year, and the ISMS has to keep running between them: the yearly internal audit and management review, the risk assessment refreshed when the product or the team changes, and evidence that accumulates. As the company grows the scope widens at a surveillance audit rather than through a new certification, and the controls built for one product carry across to the next. Noru is built for this stage: the ISO 27001 plan walks from scope to Stage 2 in order, evidence is collected from the systems you connect, Cortex drafts the policies from the controls you selected, and the audit package bundles what the certification body asks for.

Primary sources

Framework overviews

Related reading

FAQ

ISO 27001 questions answered

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Can a startup with five people get ISO 27001 certified?

Yes. The standard applies to organisations of any size and sets no minimum. At five people the ISMS is small, the roles overlap, and the internal audit is done by an outside auditor, but every clause is met and the certificate carries the same weight as a large company's.

Should a startup get ISO 27001 or SOC 2 first?

Whichever your buyers ask for. European, Nordic and Asian buyers mostly expect ISO 27001; US buyers mostly expect SOC 2. The controls overlap heavily, so the second is cheaper than the first, and many startups end up with both within a couple of years.

Does a narrow scope make the certificate less useful to buyers?

Not if the scope covers the service they are buying. Buyers read the scope statement to check that their product and the sites delivering it are inside it. A scope that covers one product fully is worth more than one that names the whole company vaguely.

Do we need a full-time security person for ISO 27001?

No. Small companies run the ISMS as a part of a founder's or an engineer's role, with tooling to collect evidence and an outside auditor for the internal audit. What the standard needs is named ownership and time at the right moments, not a dedicated headcount.

How do we handle physical controls when we have no office?

Document the facts: the data centre is the cloud provider's and is covered by its own certification, the office is serviced or non-existent, and the remaining physical risks are laptops and home working, which A.7.9, A.8.1 and A.6.7 cover. Exclude the rest in the Statement of Applicability with that reasoning.