One of the premises of this post is that the Internet has created the privacy problem. In some countries there is an instinct to solve this problem through regulation, lawmaking. There is however a different perspective on this problem and how to solve it, which is through technology and by building the privacy economy.
A different perspective on the privacy problem
Privacy economy as counterweight to mass data collection
The privacy economy is a pretty simple concept. If you take a step back and you look at what the Internet is good at so far, we understand that the Internet is basically good at advertising. There is one trick that entrepreneurs know very well on the Internet – it’s to get people to use something free, collect their data and sell their data. There’s nothing intrinsically wrong with that conceptually. There may be something wrong with it if we’re doing it without the user permission and full knowledge and consent.
And the venture guys know how to invest in those companies because they know that the entrepreneurs know how to build the products that users will use. There are always people who will buy data. Data brokers will always suck up and acquire as much data as they can. The only legitimate counterweight to this very powerful economy of data mining and data collection is a privacy economy.
There is a huge new problem in a world today. The Internet is amassing everything about us from lots of different sources and putting a lot of different data in different databases without our knowledge or consent, whether it’s from our mobile phones, whether it’s from our cars that are transmitting information now, our laptops, the apps on our mobile phones. Every part of our lives is now being data-mined and data collected without our knowledge or consent.
And by the way, this is the problem that people care a lot about. But even so there is a point of view among the venture community and the e-starter community that people do not care enough about privacy to pay for it and that’s why they should not start companies that are focused on privacy.
Privacy concerns in numbers
Here is some data. 90% of people believe that privacy is a critical issue (TRUSTe).9 in10 adults are concerned with the security of their personal info on the Web (Zogby). Half of adults in Britain would like to erase 100% of everything that’s been published about them ever on the Internet whether they published it themselves or someone else published it for them (Symantec).
98% of consumers want more control over how much data is being shared about them on their mobile phones (Harris Interactive). That’s both about what kind of data is being transmitted about them from the phone itself and about what kind of data is being collected from apps.
People are more concerned about their privacy than they are about health care, crime and taxes (National Consumer League).Only 14% of Web users would opt-in advertising targeting (USA Today). Imagine the usefulness that you can create if you can give web users control over whether they’re going to be ad-targeted on the Internet.
There is this big myth that the advertisers always tell us that people love getting more relevant ads. If you give them a choice they do not want to be targeted. So imagine the technologies that help control the targeting that’s happening.ColumbiaUniversitydid a study of Facebook users and of those surveyed 100% had a mistaken impression about what their privacy settings were doing on Facebook. 100 %! And this survey was done of college students who are presumably much more web-savvy than your average consumer.
So we’ve created a monster in our current environment. There was a cartoon in the New Yorker magazine. InAmericathere is a tradition of kids in a summer setting up a little lemonade stands and they sell the lemonade. And in that cartoon the kids are selling the lemonade and the adults are coming by the lemonade stand and they’re saying “Well, the lemonade’s free but they sell your information.”
You can’t solve the privacy problem on a do-it-yourself basis
Today and from now on everything about us is going to be data-mined and our lives are next surely being connected unavoidably to the Internet. People are feeling a lot of pain, they’re feeling helpless and it’s a big mess, there is no do-it-yourself solution for it. You can’t solve the problem of Internet privacy by yourself. There are very small parts you can solve if you are willing to invest the time or energy but otherwise you cannot solve the problem. We need some kind of a Sheriff.
We’ve seen this movie twice before
Some people are concerned that the privacy economy is too new as a concept, we’ve actually seen this twice before. If you go back to the first phase of the Internet in the 1990s, in the 1990s we saw the growth of the basic infrastructure of the Web. We saw the growth of the machines, the switches and the nodes that builds up the Internet. And then we saw the series of threats to those machines switches and nodes, and we saw hundreds of billions of dollars of value created in companies like Trend Micro, McAfee and Symantec built specifically to address those threats. All of us today benefit from the technologies that those who came earlier built for us to protect the digital infrastructure of the Internet.
Phase two of the Internet was the rise of e-commerce in the late 90s and the 2000s. Amazon, E-bay, all that buying and selling on a Web. We saw a rise of threats to those digital transactions on the Internet, a rise of huge threats. By the way, according to Europol digital crime is the fastest and one of the largest and most lucrative sources of crime. In response to these threats enormous companies and tens of billions of value were created. They were created specifically to address the digital transactions. PayPal essentially is a transaction proofing technology.
And for sure we’re going to see the same trend now with social computing – phase three of the Web is a movie we’ve seen before. We were building the guts of the Internet, we were building the transactions on the Internet and now our entire lives are on the Internet and we are going to need a set of technologies to protect our lives across the line on the Internet.
Some examples of technologies that are out there already today
There are very concrete ways that entrepreneurs can tackle very concrete specific parts of the Internet. The first one is PII, that’s – personally identifiable information. PII is all the data about us that can be found about our personal lives.
Spokeo is a web-site that is a people search website fromAmerica. On this website anybody in the world, can look you up and find out your age, your income level, your house value, your religion, your politics, your family member’s names, your zodiac sign, how much money you used to make, how much money you’re going to make. All of these things have been aggregated from different parts of the Internet. And they’re there for anybody to see and there are many web-sites like this.
And there are series of technologies now that will automatically take you out of these data bases. Some of these databases are set up specifically to take you out but then put you back in. So you need technologies that take you out and keep you out. And there’s a technology now that does that.
Another terrific technology that we can talk about is the use of encrypted conversations on Facebook. Photographs and the content of the wall posts are being encrypted by free applications that are freely distributed. They are being used now by many people all around the planet including dissidents in some of the countries that don’t want the authorities to know what they’re saying on Facebook. Every piece of content that’s out there is fully encrypted via plug-in and if your friends have the plug-in they see it automatically, they see it seamlessly the way they would if they were just simply your friend on Facebook and not also using this free app.
What else is cool about this technology, it also allows you to set an expiration date for all of your content. Let’s say that you’re being a little bit aggressive with your social posting in college but you know your graduation date and you know you might have to button yourself up a little bit after you graduate. You can set everything you do to have an expiration date, a nuclear explosion date on your graduation day so that everything you’ve ever posted gets locked up automatically. This is the kind of technology that people are hungry for. If you make it available they are downloaded by the millions and really can help people.
(Image from FreeDigitalPhotos.net)