Daily Management Review

Risks of Mass Data Collection Point of Discussion for Startup Investors


Risks of Mass Data Collection Point of Discussion for Startup Investors
More data is what nearly every technology startup wants.
But tensions are rising in Silicon Valley over whether such practices amount to a form of surveillance that customers will ultimately find invasive in the rush to collect all manner of information about customers.
Consumers are giving an unprecedented amount of information to technology companies whether ordering an Uber, streaming music, shopping online or tracking a health condition.
"The data that companies ... have on you is significantly greater than you appreciate," Mark Suster, managing partner at venture capital firm Upfront Ventures, said in an interview at a conference in Santa Barbara, California, sponsored by CB Insights, a business data firm.
'Big data' is the catchphrase referring to massive information sets that are stored and analyzed by companies and discussions during the two-day conference centered on its importance.
For example, while Uber knows popular drop-off locations and how to price trips, Airbnb is helped to better understand whether its customers prefer to travel to the beach or mountains by the collection to big data.
Artificial intelligence (AI) teaches machines to make decisions that humans previously had and is among the most highly sought technologies in Silicon Valley and collecting large amounts of data is also paramount to developing AI. For example, AI can help a doctor diagnose a disease and enable a car to drive itself or help a shopper decide on a new pair of shoes.
But with whom the companies share big data and how they intend to use it, how securely they store the data and how much personal information startups are collecting are questions that loom about.
"We are going to become comfortable with a level of surveillance that we never would have previously been comfortable with, because it makes things just a little easier," said Jeremy Liew, a venture capitalist with Lightspeed Venture Partners.
Some startups have overstepped. "God View," which allowed employees to access and track the location of individual Uber riders without obtaining permission, is a feature used by Uber Technologies Inc and for this the company faced an investigation by New York's attorney general. Uber agreed to encrypt customers' geo-location data and settled the matter.
The data his company guards is fairly benign, said Peter Coles, head economist for Airbnb. "I think it is very unlikely that we would be collecting anything about users that they would be surprised to know."
But in one on-stage discussion at the conference, the tension was pronounced. Suggestion of creating a Wikipedia-style database of anonymous patient data that was open to the public was made by Matthew Zeiler, founder and chief executive of Clarifai, a visual recognition tool used in healthcare.
"That can be very harmful, especially to the patients," argued Gabriel Otte, founder and CEO of Freenome, a cancer-detection startup. If they knew their most private health information was going to end up on the internet, even without their name attached, patients would be loath to tell the truth, he said.
Still, the manner of viewing privacy in the same way by the younger generations, who have grown up with apps such as Facebook and Snapchat that encourage sharing, is unclear.
"People don't care as much as they profess," Dave McClure, founding partner of 500 Startups, said in an interview. "Convenience is generally going to win over privacy."

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