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Is the Uber Problem Changing How Startups Treat Privacy? Not Much.

Rob Pegoraro
Contributing Editor
Yahoo Tech
Illustration of the word privacy

(Rob Pegoraro/Yahoo Tech)

It’s been a rough month for privacy in the world of tech startups. A round of unappealing revelations has left the car-dispatch service Uber looking more than a little creepy, and other tech newcomers don’t appear much better. You’d be crazy not to wonder what all these dot-coms are doing with data they’re collecting about you in the normal course of running their businesses.

And what about today’s new Internet-based companies? Are the startups of 2014 learning anything from Uber’s troubles?

Demo first, privacy policies later
I had front-row access to six new consumer-focused businesses at last week’s Demo conference for tech startups in San Jose, California. After watching their pitches on stage and touring their sites, I quizzed their founders about the Uber issue.

The first thing I learned was that startup CEOs won’t delay launching an app even if their privacy policy is nonexistent or in shambles. Four of the six companies did not have what anyone would call a fully baked privacy policy. Their CEOs had various explanations for that, none of which would pass muster at a well-established company.

Founders at Lifebox, a Q&A service, and GlanceAt, a mail-management tool, were apologetic about those oversights.

“If we don’t have a privacy policy, it should be there,” said Lifebox CEO Adam Noble. That change hadn’t been made as of Monday evening, while GlanceAt had fixed a home-page link to its privacy policy.

Execs from the photo-sharing app Kandid had a novel excuse for posting a vague and open-ended statement. Explained co-founder Janum Trivedi: “That is just our temporary privacy policy.”

As in, Apple wouldn’t let their app into the App Store without at least some semblance of a policy. Trivedi said lawyers were working on the real thing, which would be more protective of Kandid users’ data than the current statement.

The home-automation-app developer Yonomi had a vague privacy policy posted. Founder Joss Scholten said its app included a more specific terms-of-service document: “If that’s not accessible from the site, we’ll fix it.”

In contrast, energy-management app Curb’s policy is a model of concise clarity. And Uber had clearly made an impact on the parking service ValetAnywhere. Its slightly longer policy deserves credit for stating what data the New York firm doesn’t hoard: “We do not keep a history of your location or any type of location history.”

Privacy policy photo illustration

(Rob Pegoraro/Yahoo Tech)

They all mean well
All six startups professed to value users’ privacy and talked specifically about how they would better protect it — even as some said the rush to prepare for Demo had left no time to follow or react to the Uber storyline.

Kandid co-founder Oliver Johnston, for instance, said he and colleagues have no “God view” like the one many Uber employees reportedly enjoy.

GlanceAt co-founder Atif Siddiqi said they have no God view either, because their app does all of its processing of your email on your own phone: “We’re not storing anything.”

Curb founder Erik Norwood expressed surprise that any company would let people beyond designated support reps see customer data. In the case of his app, records of things like heating use can reveal extraordinary details about somebody’s daily habits: “You know when people show up and when they’re not home.”

At Yonomi, Scholten said the company planned to add the ability to delete your account right from its app. Its incentive to get privacy right? “We’re a tiny company. We violate our users’ trust, we’re done.”

Business model? Don’t be so old-fashioned
Here’s why a company might want to keep data it doesn’t need: to keep its options open. It’s a compelling motive when potential investors care more about how a company will get users quickly than how it will reach profitability.

This mind-set was on display at Demo, where many presentations ignored business models, and the venture capitalists and startup veterans quizzing them often showed little curiosity of their own.

So a company like Lifebox may have coherent ideas about income (Noble told me that options included sponsorships and charging for advanced features), but they don’t appear in its presentations at pitch events like Demo, or in any FAQ online.

Actual transparency about one’s business model — see, for example, the social network Ello — remains a rarity. You should ask about it anyway, but you can’t expect an answer.

And the people writing the biggest checks are fine with this state of affairs.

“When I do pitch meetings in Boston, the first question is, what’s the revenue model? When I do pitch meetings here [Silicon Valley], the first question is, how do you scale?” Noble said. “All they care about is, what’s your hook?”

Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.