In today’s episode of The Startup Chat, Steli and Hiten talk about how founders can deal with fraud in their startups.
Running a startup difficult enough when everything is going smoothly. But when you’re a founder, sometimes things happen that if not managed properly can disrupt the flow of your business or worse. One of these situations is fraud.
In this episode, Steli and Hiten share their thoughts on what fraud is, things that every founder should know about it, preventative measures you can take, what to do when fraud happens and much more.
Time Stamped Show Notes:
00:45 Why this topic was chosen.
01:01 How Close dealt with fraud at the early stages of the business.
02:20 Why taking preventative measures are important.
03:45 How to identify potential problems that you could run into with your product.
04:00 An example of a fraudulent situation at Close.
05:27 Measures and tools you could use to prevent fraud.
06:46 Why fraud is not exclusive to big companies.
07:43 Why you should always take an alert seriously.
08:13 Why you should invest continuously in fraud prevention.
08:19 Why you shouldn’t stop when you detect one fraudulent user.
3 Key Points:
Know where your risk is in your business.
When an alert comes up, take it seriously.
If there’s one fraudulent user, there are going to be more.
Steli Efti: Hey everybody this is Steli Efti.
Hiten Shah: And this is Hiten Shah.
Steli Efti: And in today's episode of the Startup Chat we wanna tackle a little challenging topic and that is the topic of how do you deal with fraud, how do you handle fraud in your startup, right, and this is you know obviously a tough subject and it depends on what the situation is but the reason I wanted to talk to you about this Hiten is that you know the history of course we've always had to deal with some level of fraud, people trying now using some credit cards to sign up propriate accounts or even worse people doing some really with our software and so from a very early time we always had to like invest in fraud prevention and protection and had to like deal with this and just recently last few weeks we had some really big attacks going on, some really crazy shit and thankfully we have an amazing team and we are like tackling these things and stopping them further on, you know but it's a huge pain in the ass and it has caused us probably over the years a lot of money to deal with this. So I thought because it's a top of mind for me, I thought it might make sense for the two of us to talk about this from a very fundamental point of view because I think most Startup founders they don't think about fraud, what could be done with their app, how somebody could take advantage of their app to cost them money, to make money to do some suspicious or just illegal stuff with it and so they might catch this when it's way too late and it might cause some real trouble down the line so I thought we just cover some like basics, things that every founder should know, think through, how to deal with it preventitively in the beginning but also what do you do once shit happens, you get a DDoS attack or some other crazy shit is happening to your app, you are totally surprised, how do you deal with this, maybe cover some of the basics and hopefully help some founders prevent getting into trouble at some point.
Hiten Shah: Yeah I think the first step preventitively real quick is like, know where your risk is in your business, so if you are collecting credit cards, one risk is that people will try to run fake credit cards through your system. If you are using a service like Stride, there are a lot of protection built in, right, but it's very similar to like, well you better make sure you have SSL certificate on your site,