Why entrepreneurs need to think more about data privacy
Until very recently, data privacy has largely been a matter of ethics for tech startups. With most consumers fundamentally unaware of both the capability of apps and other software to farm data and the potential risk this engenders, there has been no compelling reason for tech companies to rethink their privacy policies.
Especially when utilising customer data can offer such potential. But in recent years there has been growing public awareness surrounding privacy issues. This means that consumers are beginning to vote with their feet. For startups, privacy-by-design needs to become a priority.
The data privacy conundrum
The golden rule for every tech startup has always been to measure, measure, measure and then to act. This requires the collection of a lot of data about your users. Not only allowing for targeting gains, but helping improve service and performance. With the right skew, data farming can even be presented as beneficial for consumers.
But on the flipside, we have the abuse of this practise. With high-profile data privacy breaches – such as the Cambridge Analytica scandal – leaving the public wary and leading to new awareness, new legislation, and new practices.
Data privacy implications for startups
There have been three main reactions to enhanced privacy awareness.
- The top-down approach, with the introduction of complex legislation – GDPR, CPPL. These took many businesses by unwarranted surprise, but we now have the analytics tools to deal with them.
- Customer-led reactions. Users have been instigating change by switching to privacy-friendly platforms. While many apps have similar policies, how those policies are communicated directly impacts user uptake – the current focus on WhatsApp, Signal and Telegram illustrates this perfectly.
- Gatekeepers influence decision making. For example, Google not updating its apps so that they do not reveal what data they are collecting, and it’s not yet known how they will revise that going forward so it can be hard for startups to know what will happen going forward. On some platforms, many tools you’ve used in the past for growth marketing – attribution/usage tracking – may no longer work for many of your users (who likely won’t voluntarily opt in to tracking). For startups, this may require business/growth model alteration.
What we’ve learnt about consumer privacy as a tech startup
As an AI keyboard startup, Typewise is at the centre of human-machine interaction. Keyboards ‘see’ everything the user types, including very sensitive information. This can be dangerous for users, as was demonstrated by Ai.type making unauthorized purchases of at least $18m, and both TouchPal and Kika Keyboard employing malicious advertising practices. Influenced by the negative publicity, from the beginning we opted for a 'privacy-by-design' approach.
We built our company around the core principles of:
- Creating technology that works offline. Using on-device text prediction AI, user learning happens on the device. No data is ever shared.
- Collecting data only for onboarding, with no data collection inside the keyboard.
- An offline mode to even turn off the minimal tracking giving the user full control.
Starting a tech business isn’t easy, even now when there is so much opportunity available. With consumers becoming increasingly savvy, the way startups present their products and their privacy policies can make a material difference to success.