Why Snap’s IPO was great for privacy

“It seems odd that at the beginning of the Internet everyone decided everything should stick around forever,” Evan Spiegel, co-founder of Snapchat, said in a 2012 Techcrunch interview. And with that argument, the company was spot on. Youngsters were massively going for the app after learning that what is posted on the Internet, stays on the Internet. With this belief as a core value, you would expect Snapchat to continue to be a major advocate for our privacy on the Internet. Right?

But the first time that privacy watchdogs became concerned about Snapchat’s way of doing business, followed pretty fast. In 2012, the company settled with the FTC about their dishonesty regarding their user privacy policy, in-app notifications and app description. One year later, December 2013, a second troublesome privacy moment for Snapchat: a database breach resulted in their users’ data being up for grabs. And this time, the Internet was not amused and openly rallied against the company. So apparently, people do care about their personal data.

Monetization. Ouch. The big word is out.

As with every tech start-up, the concept is the key differentiator: that is what moves people to either adopt something or ignore it. And then comes the funding: a Series A, B or even C round with jaw-dropping company valuations. So far so good. Then comes the tipping point, because investors want to see the future. They want to know how the thus far unprofitable company will live up to their expectations. Basically, it’s all well and good that people love the app, but how are they going to make money? And so the first signs of monetization began to appear in the summer of 2015, with the introduction of geofilters that offer fun filters with availability based on your location. This seems like a perfect targeting option for advertisers.

But the expected does not appear in the form everyone was awaiting. Instead of offering advertisers an easy advertising platform, Snapchat stays close to their core. They decide to extend the geofilters to businesses as a monetization strategy, by offering them a way to customize the geofilters. The first company to go for this was McDonalds, offering branded geofilters for Snapchat users in any of the 10,000s of McDonald’s stores in the United States. Advertisers do not get automatic access to all Snapchat’s user data, but only when the Snapchat user visits one of the McDonald’s stores AND decides to use the geofilter there. Wow.

One step forward, two steps..

You remember all of us talking about Glassholes? It is happening again, but this time with the announcement of Snap’s 10 second video glasses, Spectacles, in September 2016. This time not a cyborg gadget, but a device that feels more like a toy, appealing to its user base even further. The main point of discussion is the fact that you (again) can easily record your daily encounters and invade another person’s privacy without them realizing it. Very few even realise the implications of the wearer giving away detailed information about themselves: their geolocation.

Why Snap’s IPO is great for privacy

And then we saw the recent listing of Snap to the US Stock market. And most privacy experts are happy about that. Not because they bought massive amounts of stock and can now retire. With a business model based on the idea that it is not natural to generate data about everything we do, they see Snap as a company that tries as hard as possible to treat people’s privacy with respect, while still trying to make a profit. It shows that a healthy media business can be built without sponging enormous amounts of data about each customer.

The Dark AND Light side of the Force

We see how one company struggles to balance the good privacy norms at its core with the pull to make a profit. This demonstrates how a company dedicated to changing the status quo, can still at times make decisions that support the very situation they’re trying to change. This is natural, as we often make decisions based on what we know, as opposed to trying something radically different. At least we have reason to hope in Snapchat’s case, as they have shown a willingness to course-correct, when they realize they have fallen into the same data-grabbing traps as the tech giants around them. They may actually have found a way to become the next big tech giant, without the mining of user data. No hackers or secret services snooping around your data. Exactly the things we are looking for to make sure that we realize a global shift in personal data usage: new business models.

Please share your own examples of new business models that treat personal data kindly below.

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