Data privacy is significant for tech startups, as it builds consumer trust and safeguards sensitive information. Startups must comply with regulations like GDPR when collecting and processing user data. Failure to protect privacy can damage reputations and lead to legal repercussions. Incorporating robust data protection measures during development not only mitigates risks but also differentiates the startup in a competitive market. Ultimately, prioritizing data privacy fosters long-term relationships with users and establishes a solid foundation for growth.