5 Data Backup Mistakes that Could Bankrupt Your Startup | Entrepreneur

In the current information age, data disasters have become the biggest threat to businesses. Based on a 2024 data loss statistics report, 51% of businesses that suffer data loss shut down within two years, and 43% never reopen their doors. Although most startups take the precaution of backing up their data, many of them do not do that properly. In this article, I will list five of the most common data backup mistakes that could derail your startup and how to fix them fast.

Mistake 1: Taking cloud storage as backup

One of the biggest misconceptions is taking data sync on cloud storage as an auto backup mechanism. Actually, Google Drive, Microsoft OneDrive and Dropbox are storage solutions, not backup solutions. Data sync helps when your local device is damaged or lost. But if you delete an important file on the local device by mistake, or your file is encrypted by ransomware, the copy on the cloud drive will also be deleted or encrypted.

I’ve encountered many such cases. For example, a design company enables sync between the local drive and Google Drive. One day, the hacker attacks their local systems and encrypts all the drawing files. When they detect the attack, they resort to Google Drive, but only find that all the copies on the cloud are also encrypted!

Solution: Find or implement a true backup solution that will create a separate and isolated copy of your data. The solution can be based on cloud storage. However, recent trends show ransomware will not only attack the original data, but also infect the backups. Therefore, to protect your backups from ransomware, it is better to make a backup that is completely physically isolated from your device and the internet.

Related: 5 Reasons to Make Regular Data Backups a Part of Your Business Plan

Mistake 2: Backup via copy

Startups normally ask their employees to back up via copying files to an external hard drive, to save the cost of purchasing a professional backup solution. But this method has the following disadvantages:

• Over time, it will become more and more complex to manage multiple backup versions.

• Backing up duplicates files and data repeatedly in different backup versions, wasting a lot of time and unnecessary disk space.

Solution: It is more cost-effective to choose a professional backup solution because it can:

• Manage the backup versions on different time points easily.

• Most of the solutions support incremental or differential backups, which will only back up the difference since the last backup or last full backup, saving a lot of disk space and time.

Mistake 3: Manual backup

Similar to mistake two, startups normally choose to backup manually instead of automating the process. But there are many problems with this method:

• Employees may forget to back up even if there is a regular backup policy.

• Due to human inertia, employees who initially follow the backup rules may gradually begin to slack off.

• The backup process will consume a lot of time and system resources, affecting the normal workflow of the employees.

Solution: It is always recommended to automate the backup process, because:

• Data will always be backed up on the scheduled time, not affected by human factors.

• By scheduling backup time on off-business or off-peak hours, the backup process will not affect the normal workflow or the computer performance greatly.

Even if you cannot automate the backup process completely, you should choose a solution that allows you to perform the backup via one-click or one-press instead of a lot of operations, which will make employees more willing to perform the backup regularly.

Related: Why Every Small Business Needs a Backup and Disaster Recovery Plan

Mistake 4: Backup without encryption

Many startups will use various mechanisms to protect their sensitive data, such as privileged access management, multifactor authentication, etc., but neglect the protection of their backup data. Whenever the backup devices are lost, stolen, or the cloud data center for the backup is invaded by hackers, a data breach occurs.

• IBM report shows that the global average cost of a data breach in 2024 is 4.9 million USD.

• Other than financial losses, data breaches can also lead to compliance issues and may even result in business closure.

Solution: Find a backup solution with encryption support. Make sure you:

• Use high-strength encryption algorithms. It is recommended to use AES-256 to encrypt and decrypt the backup data since it is fast and secure.

• Do NOT use obsoleted or insecure algorithms, such as DES and 3DES.

Mistake 5: Backup without validation

Completing a backup is not the end of your data protection journey — it’s just the beginning. The next step is to validate the integrity of the backup data to make sure it can be restored successfully when needed. Validation is very important because:

• Backup is time-consuming and typically involves a huge volume of data, so any error in the process can corrupt the entire backup.

• With the elapse of time, the physical devices storing the backup data will deteriorate, causing data corruption.

Solution: Find a backup solution that supports validation. And make sure you:

• Validate the backup immediately after a backup process completes.

• Validate the old backups regularly. If possible, automate the validation periodically.

The startups that last longer are those taking data backup as the core part of their businesses instead of an afterthought. By checking and preventing the five mistakes in this article, you are planning for the worst and turning data vulnerability into resilience.

Related: Create a Back-Up Plan for Your Data