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Apr 4, 2019

Jon Hyman, Braze CTO and Founder, gives his insights on the future of data privacy, the responsibilities of entrepreneurs/lawmakers, and the pressures on tech giants to comply to a new frontier of legislation.

 

 

 

TRANSCRIPT:

[0:00:17]

PJ Bruno: Hello there. This is PJ Bruno and welcome back to Braze for Impact; Your weekly tech industry discussed digest. Very thrilled to have with us here today, our CTO and founder at Braze, John Hyman. John thanks for being here.

 

[0:00:31]

John Hyman: Thanks for having me on the podcast PJ.

 

[0:00:33]

PJ Bruno: I mean as you it's been a long time coming. We've had to reschedule numerous times.

 

[0:00:37]

John Hyman: It's been challenging, but I've wanted to be here for a while.

 

[0:00:40]

PJ Bruno: I know. Well luckily now it seems like the equipment is working okay. Finally, glad to have you on the mic. For those of you who don't know, John Hyman is our MC extraordinaire so to get him in here, for me, is a big deal. So, John where do we start. Privacy. Privacy is in the air. Everyone's talking about the past year has been just a crossfire for some of these tech giants. Facebook specifically. And it kind of seems to have caused a lot of companies to like pivot their focus towards really like catering to that anxiety that some people have around privacy. So, where do you want to start?

 

[0:01:13]

John Hyman: There really is so much to unpack when it comes to privacy, but I like that what you just mentioned in your introduction is that we are seeing some companies starting to pivot more toward that as a focus. If I even look at what's been going on this week alone, yesterday we had Apple announce a credit card with Goldman Sachs and a competitive feature that they are really pushing hard is the privacy aspect of it. So, Apple says that Goldman Sachs isn't going to use your data in any way other to than to operate the card. So they are not going to share or sell that data to third parties.

 

[0:01:49]

PJ Bruno: Okay.

 

[0:01:50]

John Hyman: That information about your purchases is going to exist on your iPhone and not in Apple's cloud. Apple is not going to see it. They didn't even put your credit card number on the card itself, so the card itself is basically just blank with a chip and a stripe...

 

[0:02:04]

PJ Bruno: [crosstalk] Oh wow.

 

[0:02:04]

John Hyman: ...and your name.

 

[0:02:06]

PJ Bruno: Sounds very futuristic doesn't it?

 

[0:02:08]

John Hyman: It does look pretty cool and I think will show everyone that you got a lot of disposable income.

 

[0:02:12]

PJ Bruno: Yeah.

 

[0:02:12]

John Hyman: When you pull out it might be the new AMEX Platinum card or something.

 

[0:02:16]

PJ Bruno: Yeah. [laughing]

 

[0:02:16]

John Hyman: But, what we look at the line that they're taking is that they're really trying to sell this privacy aspect and I think that if you look at Apple's business overall they are also trying to differentiate themselves from the larger tech companies like Facebook and Google because they want to say that they respect your privacy. I remember back at CES in Las Vegas they had a big, cheeky ad up that just said," What happens on your iPhone, stays on your iPhone." And they were really just taking this jab...

 

[0:02:44]

PJ Bruno: Yeah.

 

[0:02:44]

John Hyman: ...you know at google and other providers because they're putting that forward as a focus. They release a lot of features. We have one coming out on Safari and on your iPhone that is going to limit the time that cookies can live on your device. It's something called “Intelligent Tracking Prevention” that Apple's coming out with. And so they're really trying to make a deliberate push into saying, "We're a privacy provider for you. If you want your data to be safe, then you should use Apple Products.” And I think its really interesting positioning, because globally privacy is a word that's on everyone's tongue. We see a lot of different scandals...

 

[0:03:18]

PJ Bruno: Um-hmm.

 

[0:03:19]

John Hyman: ...that are happening in the news and they're not just happening from technology companies. They're really just happening with any kind of big data breach or any other system. We've seen things like Equifax losing and leaking the Social Security numbers of more than half of Americans. We've had Starwood and Marriott leak the names of and information of 100s of millions of their consumers. These aren't great, big tech companies that consumer tech companies like Facebook. And then we just go to those companies and there still countless scandals there on Facebook had. Cambridge Analytica had had...

 

[0:03:53]

PJ Bruno: Right. Of course.

 

[0:03:53]

John Hyman: 50+ million subscriber information that had leaked. I believe even last week Facebook said that they had leaded, in plain text, the passwords of about ten or twenty million users. And so there's just really this non stop barrage...

 

[0:04:08]

PJ Bruno: Jesus.

 

[0:04:08]

John Hyman: ... Of bad press when it comes to privacy that consumers are listening to and I think being shaped by and seeing that," Hey, there is all of this data that's out about me in this world and I want to now kind of clamp down on that." Apple, I think, is taking a fairly opportunistic you know kind of look at...

 

[0:04:27]

PJ Bruno: Right.

 

[0:04:27]

John Hyman: ...how they want to position themselves in it. But, I do think its fairly interesting that we see now other businesses are having to shift toward that.

 

[0:04:35]

PJ Bruno: Yeah. Definitely. I mean you know what's interesting to me is it seemed like a lot of these fines that were happening you know just last week federal prosecutors are like conducting a criminal investigation into data deals with Facebook and that was all around user consent. And so it was not compromised passwords. Its not like okay you're potentially losing all of your you know information. It was just more okay they're using your information to sell or to make decisions. Where do you stand? As far as the data privacy person like, personally, because me... I'm like," I kinda don't care." Like I'm sorry I wish I did more but its like as long my information or like my bank account is not compromised if you're using that data, even unbeknownst to me, to like better cater to me I kinda don't mind. Like where do you sit on the fence?

 

[0:05:29]

John Hyman: So the reason, to me, that this is a challenging situation is really multifaceted. One, it comes down to the fact that I think the average consumer may not be aware of all of the things that are ongoing about them on their phones, by Facebook, on the Internet. All these little pieces of information that are essentially are tracked about them and I'm not sure that the average consumer may understand this profile which built up. And the reason that I think that is because we do see very strong adverse reactions to when this does happen in the press. So, the New York Times writes a story about some information that's being sent to Facebook and then you see essentially online or through politicians commenting on news programs that there a strong reaction to things that do seem somewhat day to day in the running of what is essentially an analytics company. And so I'm not... I think that's kind of one part of it is people may not be aware of the full scope about it. The second part is, do you think that in some cases, to your point, it may be a bit hard to understand the damages that it can be caused to an individual by having all of this information out there? So a lot of people are using Facebook and Google and they're using it for free and everyone knows that if you're not paying for a product then you are the product. But, I think if you had to enumerate and ask people to enumerate the actual downsides, to them, that might be challenging that goes kind of hand in hand with that first part of it. I mean, literally I think if you had like a Harris Poll and you called a 1000 random Americans and you said," Hi there. I'd like to conduct a survey and I'm curious to know your opinions on why is it bad for you that Facebook has this information on you?” And I think that you might get some responses that prosper anecdotal of, "I know someone that had their identity stolen" or," It seems pretty creepy to me.” But, in term of actually enumerating those problems unto them, I think that that could be a bit hard cause it's such an abstract challenge. So, I think that we're essentially working against that as well which makes it a hard topic to discuss because some people like, "[inaudible] what does this really matter? Like I'll give my information." Its interesting if you just think about the amount of information that I'll give online all the time. Like I'm constantly putting in my zip code and my email address.

 

[0:07:36]

PJ Bruno: Right.

 

[0:07:36]

John Hyman: Gender. All these different things into different forms online. Not even thinking about kind of what the purpose is there.

 

[0:07:43]

PJ Bruno: Do you have your credit card memorized?

 

[0:07:45]

John Hyman: I used to [crosstalk] have my credit card memorized. But then Google Chrome started to remember the credit cards for me. So, it does then go back to that convenience factor of I can forget information. I think the same with phone numbers, I used to know [crosstalk] all of my friends phone numbers growing up. At home, we would dial it on the phone lines. And now I think I had if you were a friend before 2006 then I know your phone number I can still go back though elementary school or high school and list out those phone numbers. Even now, I couldn't even give you Bill Magnuson's cell phone number. And I know the first six digits I think. But, I probably just can't because he and I didn't meet until later in life when I already had my phone replacing parts of my memory for me there.

 

[0:08:32]

PJ Bruno: Exactly. Exactly.

 

[0:08:32]

John Hyman: But, essentially, we come back to where I stand. I do think that ultimately there is a lot of benefit to providing consumers with personalized and relevant information. I do think that that is in the... For the benefit of consumers.

 

[0:08:47]

PJ Bruno: Um-hmm

 

[0:08:47]

John Hyman: You ever receive an email and it's about something to purchase and it's a product that you'd never looked at never been interested in may not even be right for you at all. You know a lot of us have had direction like," Why am I getting a you know a sale on boots when you know I was looking at you know dress suits" or other things online and...

 

[0:09:08]

PJ Bruno: Um-hmm

 

[0:09:08]

John Hyman: ... This doesn't match my kind of shopping interest right now. So, I think that it is really a beneficial if we can deliver personalized customer experiences to consumers based on their interests, based on things that are relevant to them, to their demographics...

 

[0:09:22]

PJ Bruno: Um-hmm

 

[0:09:23]

John Hyman: ... To their behaviors, to what we think they're going be add most value to them. I do think that is extremely valuable and you see that Google can do it to when you ever Google something into a search bar and then your like the auto completed exactly what I wanted. Its like they knew me really really well. And then some parts there's like a ... It feels a little bit creepy of you know if my phone listening to everything that I'm saying. But, on the other hand, you know, we think about of like how many times have you been wanting to think of an actor or actress's name or you're trying to learn more information about something you are watching on TV or on your phone and you just it just auto completes it and it's just like it's a great experience from a consumer. To be able to get that information faster. And so, it ultimately is good to the consumer. But, all of this being said, I will say that brands and companies do have a responsibility to their consumers, and to their customers, and to their users. To protect information that's been entrusted to them.

 

[0:10:19]

PJ Bruno: Right.

 

[0:10:19]

John Hyman: And not to use it for other purposes that the customers is not necessarily aware of.

 

[0:10:24]

PJ Bruno: Right.

 

[0:10:24]

John Hyman: Or I think would be like reasonably able to assume. Like I can reasonable assume that Facebook is going to use my information to show me an advertisement or sell it to some company, but I don't think I'd be reasonably want to assume that they're going sell my information to a political campaign...

 

[0:10:41]

PJ Bruno: Yeah.

 

[0:10:41]

John Hyman: ...to target me...

 

[0:10:42]

PJ Bruno: Jesus.

 

[0:10:42]

John Hyman: ... Based on the interest or things that they have. They even though it may kind of follow naturally if you think about it a little bit more, but I would say that it doesn't seem that reasonable to me. It doesn't seem reasonable to me if I give information to a food delivery service and then they sell that to someone who is now talking to me about... Moving in my area or setting up my electrical utilities or switching cable providers or any of those kind of things.

 

[0:11:06]

PJ Bruno: Yeah. Yeah.

 

[0:11:06]

John Hyman: I wouldn't think those things would naturally follow. But, if I do give information to a delivery service I'm going to want them to show me cool new restaurants I might like or dishes I'm into [crosstalk] or help me reorder things I have ordered recently or remind me that it's snowing tonight and, therefore, I should order in and just be cozy. Those things are a boon for me.

 

[0:11:25]

PJ Bruno: Right. Well, rather you're someone who cares about consent or not, it seems to be not stopping any of the fines that are being put on some of these big companies. I mean, you mentioned it last time we spoke about how like Facebook they're getting fine after fine. Tons of fines, but still posting record profits. So, I guess the question becomes like what's the incentive? Like, how much longer? What's the longevity around the plan of being able to just eat fines and not change your strategy? Right? Because big company right? It's not an easy pivot. So, I guess that's the question. It's like you can tell they did this whole new shift to privacy focus. Like what are your thoughts around that?

 

[0:12:09]

John Hyman: I think that if you want to influence the behavior of companies, there are essential two was of doing it. One, is you can do it through I'll say cultural opinions and attitudes of what's acceptable. This is where we see things like pressure of people talking to having a conversation about what they believe is acceptable or not. Taking to Twitter. Taking to the news and putting social pressure on a company to change. The second part is that you can do it through legislation and regulation and that's really where a government can exercise its power. If you look at companies like Facebook, what you mentioned is fairly true. If you go back to Facebook's Q4 earnings that they announced at the end of January so just about two months ago, we go back to where Facebook was in January you think that they had just come off of you know a crushing amount of different scandals. Their stock price had dropped, I believe, 30 or 40% from its October high. There were a lot of things in the news going on of other people saying that teenagers are leaving Facebook in mass or that advertisers are pulling information from Facebook where there were scandals and it seemed like you're like," Wow! Facebook's really is going to have to do something about this." Then, what they do in Q4 is they just you know had very strong Q4 earnings data. They talked about in January completely beat the expectations of the street and ended up having their stock price go little bit back up. It's not fully recovered where it is, but [inaudible] you do see them performing really well. Though, the fines are a part of it. So, you're looking at fines from Facebook we know that Google I was reading this article that Google pays more in EU fines than it does in taxes. Just kind of a...

 

[0:13:52]

PJ Bruno: That's nuts.

 

[0:13:53]

John Hyman: ... Preposterous thing on principal alone. But, you really want to just try to slowly get these companies to change over time and I think that companies, ultimately, are can become slower moving organizations just like you might see with governments or anything else like that. And but you can slowly recalibrate them to what is acceptable.

 

[0:14:16]

PJ Bruno: Um-hmm.

 

[0:14:16]

John Hyman: And over time they'll be paying these fines and it might just be the cost of doing business. But, a long term strategy is going to be that you can't live in that world forever because you're going to have either the pressure continue to fall on you...

 

[0:14:31]

PJ Bruno: Right.

 

[0:14:31]

John Hyman: ...and this is when you see things like Elizabeth Warren making claims that she wants to break up tech companies so we can get to that and talk about that in a moment. But, you also then just have the massive consumer opinion, which will just continue to just fall down on you or have consumers' opinion exploited by companies like Apple who'll then try to push more fines.

 

[0:14:52]

PJ Bruno: It is a sick troll. It is a sick troll.

 

[0:14:52]

John Hyman: Yeah, it is grave by them and they you know Apple actually been a really staunch supporter of increased privacy rights. Because, again, it's a competitive advantage for them. So, I think that over time, in the long term view, they're going to want to make those changes. So, I do think that fines are effective in the long term. I don't think that they're effective in the short term. But, in terms of incentivizing behavior it's a really good way to slowly move the needle there.

 

[0:15:15]

PJ Bruno: So what about tech giants or CEOs informing new legislation because I remember I talked to Susan Wiseman and you know she was our GDP our queen over here as we were going through it and she mentioned that a lot of that legislation had you know was not informed. It was not informed by a specialist. It wasn't informed by tech CEOs or subject matter experts. So I guess my question becomes: A) Should they leverage to help make legislation and B) Is that dangerous because you know having someone who has so much invested in what's going on help create laws that sounds you know somewhat a slippery slope?

 

[0:15:56]

John Hyman: One thing I think is going to be absolutely be true is that... The crafters of this legislation are certainly going to try to use it to maintain a competitive position. So, if you do have Apple having a seat at the table in that conversation they're certainly going to want to do things that allow them to out perform Google. I think you just see this over and over again of just essentially of just lobbying this you're always trying to lobby in your self interest or in your industry's interest or something like that.

 

[0:16:23]

PJ Bruno: Sure.

 

[0:16:24]

John Hyman: All that being said though, the technology's changing in a really fast pace. And so, one of the challenges that comes just in front of any kind of legislation is are you even legislating the things that are relevant to today and also going to be relevant tomorrow? We also have to think about what the world is going to be like if we have self-driving cars or when 5G is everywhere and, therefore, we have in there meta things connected in our homes. There's a lot more things that we want to think about that maybe we to start to legislating. Like I don't even understand all of this information that Alexa is collecting on me at home. But I see cases of Alexa and Amazon being subpoenaed in murder trails and things like that and we got to even answer those questions of like," What's it going to be like when daily life is just so full of sensors and robots and monitors and...?" Perhaps we've already gotten there.

 

[0:17:15]

PJ Bruno: Right.

 

[0:17:16]

John Hyman: But, I do think that like the government isn't going to do an effective job at legislating what is going to be effective in the future without talking to the industry. So, I absolutely feel that you have to have industry experts essentially have a seat at the table and just to kind to elucidate this though kind of funny example. If you just go and watch that hearing of Mark Zuckerberg on congress. I mean, it's apparent how woefully ignorant a lot of the politicians are of...

 

[0:17:44]

PJ Bruno: Right.

 

[0:17:44]

John Hyman: ... How the Internet works, on how Facebook works, on how really anything in modern technology is actually functioning. So, you want to make sure that you got great experts in there for sure.

 

[0:17:55]

PJ Bruno: So, what else? What's next? What's the future look like? I know that we have this whole California Consumer Protection Act. So, what's the path forward for consumer data protection? What can American legislation do better than Europe has done?

 

[0:18:10]

John Hyman: So, for folks who aren't so familiar with California Consumer Privacy Act I'll give you a little bit of the backstory here. So, we had the EU create GDPR which is their big data protection regulation and this one's effect May 25, 2018. And it allowed citizens of the EU to have a certain number of rights when it comes to their data online. They have the right to amend information that's about them, request information that's being collected on them. Business could only collect data for certain under a certain business reason. Like they had to get other consent or have a valid business concern. You could only collect the information a minimal set of information that you needed to do a job and only had to keep the information around and retain it for as long as you needed and no more than that. And so it really kind of helped businesses kind of one lay out the things that they needed to do and it helped their consumers in the long run. And you saw in 2018 a lot of businesses talk about GDPR. It was kind of the headline of all of the privacy kind of blogs and security blogs. Braze, we hosted a conference on it with some of our partners. I wrote blog posts on this. We had Susan Wiseman, our general counsel, also discussing a lot of GDPR. It was kind of the big news. And then when you look over to the U.S. We still have really nothing comparable when it comes to legislation. So, California took a look at this and said," Look, we can do something about this and we can create our own privacy act that is akin to what the EU citizens have on the GDPR." So, essentially what this would mean then is that California is a state that is going to create legislation that applies only to state residents of California or maybe there's a little more than that. But, essentially only applies in the California jurisdiction. And that would require companies have to understand they need to give different rights to folks in America based on what state they are in. Now, I don't think that that is a great way for us to go about doing privacy and what I mean by that is a state legislated privacy act. Because, if you play that down what you'll find is that you'll end up with a patchwork of different states having their own different legislative agendas and...

 

[0:20:30]

PJ Bruno: Right.

 

[0:20:31]

John Hyman: ...and maybe you'll have to do something in the one state. You know even it... just even the concept of states is an incredible concept to me that you could do something that is completely legal in one state and then travel 20 miles across a border and that exact same thing will get you thrown in jail. There are a lot of different cases in America of which we have laws of varying severity and varying degree or laws that things that are legal or not and if you think about that with data it I think that it can really start becoming mind-boggling for what that imposes on business and what that imposes on companies in order to do. So, if you look at the political side of this, you have the Republican Party in the United States that wants to do more of a federal approach. And at the tech companies are also in support of that. So if you look at what these big giants are saying it's like, "Look, like we should really do this at the federal level not at the state because otherwise this is going to start getting a bit challenging for us to do." And that is something that I actually support. I do think and it's not just the Republicans that'll say that there's bipartisan support on wanting to do data privacy on a federal level here in the United States. But, I think that's essentially the right level at which we need to operate.It is we need something that is national that is going to protect people not just in California, but also in North Carolina and...

 

[0:21:44]

PJ Bruno: Right.

 

[0:21:45]

John Hyman: ...North Dakota and Texas and in New York.

 

[0:21:46]

PJ Bruno: It's going to get pretty nasty out there.

 

[0:21:48]

John Hyman: We need to have it all essentially be this same thing as this great country of ours have the same protections for all of our citizens. Not just those who happen to live on the sunny side of it.

 

[0:21:58]

PJ Bruno: Gosh. I do wish I lived in California. I will say that. [Laughter]

 

[0:22:02]

John Hyman: Yeah. Every time I go there and then I come back to New York and it's snowing and I just wonder," You know I could be a place where there's great wine and good surfing and beaches and ...

 

[0:22:12]

PJ Bruno: ... And they're thinking data privacy legislation like," That's important to me."

 

[0:22:15]

John Hyman: Yeah. They're in some things ahead of they're time.

 

[0:22:20]

PJ Bruno: [Laughter] Well, all right John, well, that's about our time man. Wrapping up, any words to the wise on any companies that could be dealing with user data in the future?

 

[0:22:29]

John Hyman: Well, one thing that I'll just say is I think that the question around privacy is could be just fairly interesting as we move into the future. I was talking a bit about the Internet of things and just really there's a lot of data being collect all around us and, as a consumer, I really would love to just understand what that all is. So, I mentioned Alexa and I have to imagine that Amazon has a different profile of me when I am talking to Alexa than when my wife is talking to Alexa. They must know and have this different personas of okay we got you know they probably figured out how many people are in our house. And also you can then use the things in our house to really track a lot about our lives. I once read some funny article that was something like in Canada they have their water plumbing supply and their plumbers who ever runs their water utility... I don't... It's not the plumbers. But, they have to essentially have someone who manually is kind of sitting at like basically the water power plant and turning up capacity at half-time in hockey games. Because in Canada everyone's watching the hockey game and then it goes to commercial break or goes to half-time and then everyone goes and uses the restroom.

 

[0:23:48]

PJ Bruno: Ah.

 

[0:23:49]

John Hyman: And everyone flushed at the same time. And they need they have like 10 or 20x the amount of like water pressure that they need to push down there. The reason that I bring up this crazy example is because if you think about all if you just think about that as a thing then you play if forward and think well if you had a sensor on every time a flushed the toilet, you had a sensor on when I turned on the gas on my stove, or when turned on the television , or when I told Alexa to turn on the lights in my living room you could map out everything that I'm doing in my apartment. And I think that it's going to be fairly interesting to think about like what it's going to be like in the world where a lot of different companies can accurately map out what you're doing. Even now just with a phone in my pocket, I know that Google and Facebook have a lot of information about me. If I walk... Go between here and the restaurant and I'm having dinner tonight I sure they're going to know did I run? Did I walk? Did I take a bike? Did it take the subway? Did I take a car? They really could kind of track you back through that. And it's one thing where you got this giant these giant tech companies that really are the most valuable companies in the world that have this information and we're hoping, at least I'm hoping as a consumer, that they're good stewards of that as best as they can and protected as best as they can. But, there will be other companies that then start to get this information. They'll be my utility companies that'll start maybe track or and perhaps it will be like Ford or General Motors as they have a self-driving car and then they know all this other information of what's going on in the car. You know, perhaps the other vendors inside my apartment or my house and I think that really the next thing that we need to just make sure that we're thinking about is just holistically what's going to happen when just have so much data about us available that's very granular that can really paint this whole picture of who you are and what are we going to have to do as a society in order to deal with that. So, and so I think that that is going to be like a kind of fairly interesting next step as we go into the Internet of things and we look at legislation. I think that's really going to be the only way to solve it is make sure that we have tight legislation on all of that different kinds of data there. But, it's just something that I think is one is exciting. I think that it's exciting that we're going to have these things or these pieces of technology in our lives. But, we need to just make sure that it won't be done irresponsibility.

 

[0:26:09]

PJ Bruno: Yeah, and I hope it is. It's up to you lawmakers. We're looking at you. John, thanks so much for being here.

 

[0:26:15]

John Hyman: Yeah. I had a great time. Thanks so much.

 

[0:26:16]

PJ Bruno: And thank you guys for being here with us. Take care.

[0:26:19]