If you have a social network startup or similar, what would you say is the most important asset for the company? Tech? Innovation? The team? Some would argue that definitely talent and company culture is the core of any startup, regardless of the awesome products they might have or the constant thirst for innovative technologies. However, some would disagree.
The collection of consumer data has been a topic that has raised many eyebrows. We talked about privacy in our previous post, but there is still much food for thought. From global headline news such as the recent Sony hack (with an additional 270,000 documents disclosed on June 19) or the Target data breach, to personal privacy guideline abuse or constant updates. How much data is being collected? How informed are our consumers about the details of the information that is being tracked? Consumers are very badly informed. Everyone is vaguely aware that something is being gathered in the deep, dark walls of dusty servers in some random corner of the world.
Ignorance vs. fear.
A recent Harvard Business Review article, executives from frog, the global strategy design firm, “advise companies building products and services using personal data to develop customer trust in order to be successful”. They gained research insights from different participants around the world including the United States, United Kingdom, Germany, India and China, to understand the general online population’s perception on data and privacy. You would think that if Facebook is all over the world, then users are aware of the data being collected, how privacy settings can be changed etc. Well, apparently, we’re all wrong. There were several differences between countries and demographics. For instance, health history in the US and UK were on a very high value. But it’s not the case for online users in China or India.
Another example is framed under the National Security Agency data breach (clap, clap Snowden). The majority of the research participants were highly aware and concerned about this breach, “but felt that this was an inevitable cost of using the Internet”. And we say: What?? We definitely agree with frog Design’s exec’s: Let’s build products around consumer trust, and be totally transparent while we’re at it.
Back to the research. The US, Germany and UK are all privacy conscious countries. They also tend to be more individualistic society, while countries such as India or China are more dependent and follow more collective standards of communities and families. Regarding this aspect, we consider there is a digital exhaust, because we as users are now 10-character ID numbers that if queried in a relational database, it shows our deep deep secrets, including which car we’re prone to buy in 2020. The information you generate through your smartphone or connected car is mostly of profile information giving also your location.
Regulation vs innovation.
Trust has become a competitive advantage to new companies. New companies have to offer a ton of value because they have a trust deficit (thanks Google and Facebook). The smart connected products have to build on the level of trust. So, what’s next in the landscape of this consumer data? This is a thickening topic around global standards. Germany has its own privacy requirements. Anyone could contact Google for instance to forget their private data. Think of startups (who are 90% of the time just thinking of building a great product); wouldn’t it be easier to follow a simple set of privacy laws and regulations so everyone abides by the same rules and not corrupt consumer trust? Or degrade the product for that matter? So much trust has been built up in EU that many startups are now complying with this.
What about generational differences? Are kids today more private? Or do they don’t even know what privacy is? According to the study, it doesn’t matter. The age of the participants didn’t correlate to their willingness to respond. Broadly speaking, age almost had no bearing to the fact that people are sharing.
We’re at an inflection point because of the quantity of information. Before, it was all about collecting as much information as possible because it might be useful in the future. But now with smart and connected products, we’re collecting even deeper level detailed information. This used to be seen as an asset, but now it is a liability.
So what do we do?
Companies don’t need to wait for regulations to deal with customer trust. Consumer trust, in today’s fast-paced technology and media environment, is a company’s most valuable competitive advantage. Ask for permission, not for forgiveness, because it will turn into a long term liability for your company. We continue our work as a data and transparent startup, so click on, and join Compass.to!