Startup investors fret over risks of mass data collection

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By Heather Somerville

<span class="articleLocation”>Nearly every technology startup wants the same
thing: more data.

But in the rush to collect all manner of information about
customers, tensions are rising in Silicon Valley over whether
such practices amount to a form of surveillance that customers
will ultimately find invasive.

Whether ordering an Uber, streaming music, shopping online
or tracking a health condition, consumers are giving an
unprecedented amount of information to technology companies.

“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.

Discussions during the two-day conference centered on the
importance of ‘big data,’ the catchphrase referring to massive
information sets that are stored and analyzed by companies.

Collecting big data helps Airbnb, for instance, know whether
its customers prefer to travel to the beach or mountains, and
Uber knows popular drop-off locations and how to price trips.

Collecting large amounts of data is also paramount to
developing artificial intelligence (AI), among the most highly
sought technologies in Silicon Valley, which teaches machines to
make decisions that humans previously had. AI can, for example,
help a shopper decide on a new pair of shoes, help a doctor
diagnose a disease and enable a car to drive itself.

But questions loom about how much personal information
startups are collecting and how securely they store the data,
with whom they share it and how they intend to use it.

“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

Some startups have overstepped. Uber Technologies Inc faced an investigation by New York’s attorney general
into a feature known internally as “God View,” which allowed
employees to access and track the location of individual Uber
riders without obtaining permission. Uber settled the matter and
agreed to encrypt customers’ geo-location data.

Peter Coles, head economist for Airbnb, said the data his
company guards is fairly benign. “I think it is very unlikely
that we would be collecting anything about users that they would
be surprised to know.”

But the tension was pronounced in one on-stage discussion at
the conference. Matthew Zeiler, founder and chief executive of
Clarifai, a visual recognition tool used in healthcare,
suggested creating a Wikipedia-style database of anonymous
patient data that was open to the public.

“That can be very harmful, especially to the patients,”
argued Gabriel Otte, founder and CEO of Freenome, a
cancer-detection startup. Patients would be loath to tell the
truth, he said, if they knew their most private health
information was going to end up on the internet, even without
their name attached.

Still, it is unclear if younger generations, who have grown
up with apps such as Facebook and Snapchat that encourage
sharing, view privacy in the same way.

“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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