Insider Threats might be your Biggest Overlooked Risk

Jul 25

What this Article is about

You've been building your startup from the ground up, survived the 'Valley of Death,’ and have built a team you trust. As a result, all your employees had access to basically all your valuable assets—customer data, trade secrets, and financial information. Since then, your organization has grown larger, but you didn't think about revising this lack of compartmentalization until one day, when you discovered the hard way that your most significant security threat wasn't some hoodie-wearing hacker in a basement halfway around the world. It was someone sitting right next to you in the office, maybe even sharing coffee with you in the break room.

Welcome to the world of insider threats—the cybersecurity equivalent of being betrayed by your own shadow.

If you think insider threats are just a "big company problem," think again. Recent data shows that small businesses and startups are not only frequent targets but often the most vulnerable victims of these attacks. In 2024, 83% of organizations reported at least one insider attack, and the numbers for smaller companies are particularly sobering [1].

Let's start with some hard truths that might prompt you to double-check who currently has access to your company's Google Drive.

The Size of the Problem

I have conducted some research, and the statistics surrounding insider threats are frankly terrifying, especially when broken down by company size. You will find the sources at the end of the article. Here's what the latest research reveals:

83% of organizations experienced at least one insider attack in 2024 [1]
48% of organizations report that insider attacks have become more frequent over the past 12 months [2]
Organizations experiencing 11-20 insider attacks saw a staggering 5X increase from 2023 [1]
The average annual cost of insider risk has reached 17.4million, up from 16.2 million in 2023 [3]

Are all the insider threats malicious? Of course not. But this doesn't make things better for your organization.

Small businesses receive the highest rate of targeted malicious emails (one in 323) [4]. To put that in perspective, if your company gets the typical 100 emails per day per office worker, you're looking at something potentially malicious content landing in the inbox every few days. Even if your employees do not intend to harm the organization, they can still be a real threat. Here are some more stats:

61% of small and medium businesses (SMBs) were targeted by cyberattacks in 2021 [4]
82% of ransomware attacks in 2021 were against companies with fewer than 1,000 employees [4]
37% of ransomware victims had fewer than 100 employees [4]

Because cybercriminals are aware that small businesses are often less protected, employees at small businesses are 350% more likely to experience social engineering attacks than those at larger enterprises [4].

Financial Impact

For small businesses, the financial impact of insider threats can be devastating, as the same research shows that 95% of cybersecurity incidents at SMBs cost, on average, north of $300K per incident, whilst nearly 40% of small businesses lost crucial data as a result of an attack [4]

What about cyberinsurance? Here's the kicker: only 17% of small businesses have cyber insurance [4]. That means when an insider threat materializes into a real attack, most small businesses are flying without a financial safety net.

The costs extend beyond the immediate financial impact: 55% of customers worldwide would be less likely to continue doing business with companies that have been breached [US data, 4].

Furthermore, the average cost to contain an insider incident is 211,021, while they spend 37,756* on monitoring [3]

To sum it up, it would be like spending thousands on emergency room visits while skipping your annual checkups—reactive instead of proactive, and far more expensive in the long run.

(*) As a side note, if you want to know how much to spend on security controls for a quantified risk, you may want to read my other article, "The Million-Dollar Question: Are You Spending Too Much on Risk Prevention?"

Real-World Examples

Of course, when it comes to convincing you of the problem, nothing would probably drive home more effectively than real stories from real companies. These aren't hypothetical scenarios from a cybersecurity textbook—these are actual cases that made headlines, cost millions, and in some cases, nearly destroyed the companies involved.

Tesla: When One Disgruntled Employee Can Stop Production

In 2018, Tesla learned the hard way that insider threats can bring production to a halt. A disaffected IT employee managed to disrupt the company's entire production line through sabotage [5]. Think about that for a moment—one person, with legitimate access, was able to impact a multi-billion-dollar company's core operations.

But Tesla's insider threat story doesn't end there. In 2023, two former employees leaked sensitive personal data of over 75,000 current and former employees to a foreign media outlet [6]. The leaked information included names, addresses, phone numbers, employment records, social security numbers, customer bank details, and production secrets. It's like having your entire company's diary published in the newspaper—except the diary contains everyone's most sensitive information.

Samsung and the ChatGPT Oops Moment

As we mentioned already, sometimes (actually, research shows that it's less than half), insider threats aren't malicious—they're just well-meaning employees making catastrophic mistakes. Samsung discovered this when employees accidentally revealed trade secrets by using ChatGPT for work-related tasks [5]. They thought they were being productive and innovative. Instead, they were essentially handing their company's secrets to an AI system that could potentially share that information with anyone.

This case exemplifies how the modern workplace, with its AI tools and cloud services, has created new avenues for insider threats to manifest. It's like leaving your house key under the doormat, except the doormat is on the internet and millions of people walk by it every day.

Coinbase: When Outsiders Bribe Insiders

Coinbase faced a different flavor of insider threat when criminals bribed overseas customer-service contractors, leading to a ransomware demand against the crypto exchange [5]. This case highlights how insider threats don't always originate from your direct employees—sometimes they come from third-party vendors and contractors who have access to your systems.

It's a reminder that your security is only as strong as your weakest link, and sometimes that weak link isn't even on your payroll.

A Pattern Emerges

When you study these cases alongside others—like the Yahoo research scientist who stole 570,000 pages of proprietary information minutes after getting a job offer from a competitor [6], or the Microsoft employees who accidentally exposed login credentials to GitHub [6]—specific patterns become clear.

The Departing Employee Threat

The most common insider threat comes from employees who are leaving the company, either voluntarily or involuntarily. It's like a breakup—sometimes it's amicable, but sometimes the departing party wants to take half of everything with them, including things that aren't theirs to take.

Consider the case of Anthony Levandowski, who downloaded thousands of Google's self-driving car files before joining Uber [6]. Google estimated they lost up to $1.5 million due to his theft. Or Samuel Boone from Proofpoint, who stole confidential sales data before joining competitor Abnormal Security [6]. Ironically, Proofpoint's data loss prevention solution failed to prevent its employee from downloading high-value documents to a USB drive.

The Negligent Insider

Once again, not all insider threats are malicious. Sometimes, they're just human error amplified by poor security practices. The Boeing employee who emailed a spreadsheet to his wife for formatting help, unknowingly exposing the personal information of 36,000 coworkers in hidden columns, is a perfect example [6]. The cost? An estimated $7 million in credit monitoring services.

The Social Engineering Victim

Sometimes insiders become threats not through malice or negligence, but because external attackers have manipulated them. The 2020 Twitter hack, where attackers used phone-based spear phishing to compromise employee accounts and take over 130 high-profile accounts, demonstrates how external threats can turn insiders into unwitting accomplices [6].

Startup-Specific Risks

While the examples above come from larger companies, startups and small businesses face unique insider threat challenges. Here are some to think about:

In startups, everyone wears multiple hats and, as a consequence, has access to everything. It's like giving everyone in your house the master key—convenient, but risky. When your team is small and tight-knit, implementing strict access controls can feel like not trusting your own family.

Startups that experience rapid growth often struggle to implement proper security controls fast enough. New employees receive broad access because it's easier than determining precisely what they need. It's like building the airplane while flying it—except the aircraft is carrying your most sensitive data.

Small businesses often can't afford the sophisticated monitoring tools that larger companies use to detect insider threats. They're essentially flying blind, hoping that trust and good intentions are enough to keep them safe.

AI and Remote Work

The COVID-19 pandemic and the rise of AI tools have created new insider threat vectors that didn't exist just a few years ago. Remote work means employees are accessing company data from personal devices and home networks. AI tools like ChatGPT create new avenues for sensitive information to be accidentally leaked. It's like the security perimeter of your company has become as porous as a sponge, with data flowing in and out through channels you might not even know exist.

The Rippling vs. Deel case from 2025 illustrates the increasing sophistication of insider threats [7]. Rippling accused competitor Deel of hiring an employee spy who used legitimate access to platforms like Slack, Salesforce, and Google Drive to exfiltrate sensitive data over four months. This isn't just employee theft—this is corporate espionage at a level that would make Cold War spies jealous.

Conclusion

I hope this article effectively conveys the importance of including the insider threat (whether malicious or not) in your risk assessment. Insider threats represent one of the most significant and underestimated risks facing startups and small businesses today. The statistics are sobering, the real-world examples are frightening, and the potential consequences are severe. But the good news is that with thoughtful planning, reasonable investment, and consistent execution, these threats can be effectively managed.

The real-world cases should serve as a wake-up call for every startup founder and small business owner. Insider threats aren't just a theoretical risk—they're a clear and present danger that can destroy years of hard work in a matter of days or weeks.

But here's the good news: unlike many cybersecurity threats that require expensive technology solutions, insider threats can be significantly mitigated through smart policies, proper procedures, and a culture of security awareness. You don't need a million-dollar security budget to protect yourself—you need to be smart about it.

The key insights to remember:

Culture is your strongest defense. Technology is important, but a security-aware culture where employees understand their role in protecting the business is your most powerful tool.
Prevention is cheaper than reaction. The cost of implementing basic insider threat prevention measures is a fraction of the cost of dealing with an actual incident.
It's not just about technology. While technical safeguards are important, many of the most effective insider threat prevention measures are about people, processes, and policies.
Assume it will happen. Build resilience into your business so that when you do face an insider threat, you can detect it quickly, respond effectively, and recover completely.

The threat is real, but so is your ability to defend against it. The question isn't whether you can afford to implement insider threat prevention measures—it's whether you can afford not to. Your business, your employees, and your customers are counting on you to get this right. The good news is that with the right approach, you absolutely can.

References

[1] IBM Security. "83% of Organizations Reported Insider Threats in 2024." IBM Think Insights. https://www.ibm.com/think/insights/83-percent-organizations-reported-insider-threats-2024

[2] Cybersecurity Insiders. "2024 Insider Threat Report." Gurucul. https://gurucul.com/2024-insider-threat-report/

[3] DTEX Systems. "2025 Cost of Insider Risks: Key Takeaways from Ponemon Institute Report." https://www.dtexsystems.com/blog/2025-cost-insider-risks-takeaways/

[4] StrongDM. "Small Business Cyber Security Statistics." https://www.strongdm.com/blog/small-business-cyber-security-statistics

[5] Tesla (2018), Samsung/ChatGPT, Coinbase, Apple VisionPro cases

[6] Mimecast. "11 Real-Life Insider Threat Examples." https://www.mimecast.com/blog/insider-threat-examples/

[7] Teramind. "Lessons Learned from 9 Real Insider Threat Examples." https://www.teramind.co/blog/insider-threat-examples/

This article is part of an ongoing series on cybersecurity for startups and small businesses. For more practical cybersecurity advice tailored to growing companies, subscribe to my newsletter or follow me on social media.

Paolo Carner