Please consider how you may react to each of the following circumstances…e.g., if (when) you were  informed that a system-wide breach occurred at…

• Equifax (credit scoring) and all of your financial – credit data went missing.
• Facebook (social media) and all of your personal communications and photos went missing.
• VISA (credit card) and all of your itemized expenditures went missing and assumed sold – transferred to nefarious online global retailers.

One likely reaction would be that, once again, any sense of personal privacy had been publicly squandered…along with revealing insights to each organization’s, less than astute user – personal privacy safeguards, i.e., information and data belonging to millions who now learned their expectations of user privacy ‘fine printed’ in user agreements, dashed.

Personally, I find it especially annoying and disingenuous to hear organizations’ now instant and repetitive chorus of pious users…who claim (ex post facto) ‘they read the fine print’ and accepted the reality their individual postings and/or meanderings would be ‘fair game’ to the world. That is, whomever and for whatever price a particular-platform who requires – publishes personal profiles and postings, allows all to be made available for others for a price. To those. I say, phooey!  https://kpstrat.com/wp-admin/post.php?post=401

As an intangible asset strategist and risk specialist…user privacy, in these circumstances – on these platforms, can be incalculably valuable as consortiums of psychographic and demographic intangible assets, i.e., user admissions of intellectual, relationship, and structural capital. But, here, I mean real and consistent safeguards of user data, not just the sort conjured in legal ease as a ‘check the box’ prelude to joining a social networking – media platform.

Unfortunately, we know a percentage of these self-defined – self-described…(social media) platforms have, all along, squandered the vast quantities of intangibles users readily provide. In turn, of course, the platforms have repeatedly turned the proverbial blind eye about how to use same to achieve-sustain revenue ever growing streams.  https://kpstrat.com/wp-admin/post.php?post=2335

But wait, anytime, a citizen of the world…is presented with the opportunity to use a social media platform’s primary service, indeterminately, and, for free, with the company’s value and its founders’ wealth are in the billions of dollars, would it not be prudent for users of said platforms, to ponder, preferably in advance, how, why, when, where, and from whom that platform generates its revenue, ala, explanation of their business model?

What’s’ really being squandered, in my judgment, when such business model indiscretions materialize…as they frequently do, additional layers of a company’s reputation are peeled back exposing risk. Of course, a component to this (reputation) erosion equation, are users’ presumptive trust in the platform, and the voiced solidification of non-users (the publics’) skepticism in the credibility and sustainability of these companies, many of which have purposefully self-defined as mere platforms.

To be sure, the reputation and underlying relationship capital (intangible assets) any company enjoys…depreciates in value and competitive advantage. How rapidly, how much, and for how long, at this point, are educated guesses at best, as are resilience and recoverability. It is fact, each is an intangible asset, and each has – can produce significant value and competitive advantage for a company. But, when those particular-categories of intangibles (ala user privacy) experience erosion and/or experience undermining, i.e., user privacy, or otherwise, substantial reputational, financial, and market space losses can materialize very rapidly.

However, when mega ‘platforms’ such as Facebook are involved…which reports, as of the fourth quarter of 2017, 2.2 billion monthly active users. One would likely be correct to exhibit skepticism about if or whether Mr. Zuckerberg’s proposed testimony before the U.S. Congress would produce adverse effects aside from an unknown potential for, or impact of, imposition of regulatory oversight. Any (proposed) regulatory oversight would likely emerge from legal arguments opposing the notion that social media are mere platforms not companies.

At this point, with Facebook being so large and influential globally, and with potentially billions more prospective-potential users…I am skeptical whether the whims of existing and/or prospective users, i.e., continue to use – withdraw one’s use of Facebook would have a significant or long-lasting effect. A potentially more realistic reputational – sustainability risk is that Facebook may experience the creation – recreation – rejuvenation of ‘facebook like’ competitors whose value, and revenue generation which provide explicit gradations – variations of business model, other than entrée free. A user non-entrée free threshold, could be technologically structured with a reasonable expectation of real – actual privacy, i.e., absent revenue generating collection – application of user data for psychographic – demographic profiling. Of course, there would be claims of discrimination against users who may not afford an entrée fee, and too, the ‘platforms’ revenues and value may decrease due to fewer users’ data

Here’s just one example, among thousands, which I believe goes to the heart of the issue…i.e., Parker Higgins highlighted a privacy problem in Electronic Frontier Foundations’ blog (March 8, 2012), i.e., how apps need to respect user privacy rights from the start.

In the post, Higgins’ describes an app that facilitates ‘ambient social networking’…translated, that means the app runs in the background of one’s phone, collecting and sharing location data, etc., and then notifies the user when your friends and/or others with shared interests are in proximity, thus, enhancing serendipitous meetings.

I am not suggesting these types of apps are inherently wrong or necessarily violate the increasingly tenuous and often blurred presumptions – perceptions associated with one’s privacy…app users may erroneously presume. After all, one must willingly purchase the app, therefore buyers/consumers presumably understand (are forewarned about) the apps features and its often a requisite connection to other social networking sites.

As Higgins quite correctly points out…it certainly doesn’t require much imagination to foresee how sending a steady stream of data and information of all types to a third party, that may not have a (personal) privacy or data retention policy in place, can, and therefore, as the number of users increase, will inevitably give rise to a host of potentially significant personal privacy issues, particularly when the primary target market for the apps are children.

So, I reiterate, personal privacy, presumed or not, is, in my view, an extremely valuable, yet very fragile form of intangible asset…and should be treated as such…if I were a board member or shareholder of an app developing firm, I hope I would make every effort to obligate management (app development) teams to consider ‘personal privacy’ as being integral, if not a fiduciary responsibility. In other words, avoid ‘playing fast and loose’ with app user privacy features and issues. Instead incorporate user privacy as a real (business value add) intangible asset!

The personal privacy issues Higgins and I claim are possibly being dismissed and/or disregarded…bring to the forefront, as they have again today, a larger problem in platform and app development. Which is, initially building and marketing a ‘minimum viable product’ only to see how it’s received by niche consumers, and then adding personal privacy features later. But, cutting personal privacy corners that are likely to undermine the relationship capital, trust, and reputation that is essential for the app sector’s sustainability is, to be sure, much more than mere shortsightedness.

As aptly noted by Marissa Levin (Successful Culture Blog) a lifetime that has become largely ‘app driven’, we also must consider safeguarding the humanity of our companies!

Michael D. Moberly March 27, 2018 St. Louis [email protected] ‘Business Intangible Asset Blog, since May 2006 https://kpstrat.com/blog where one’s attention span, intangible assets, and solutions converge!

Readers are invited to explore other papers, books, and blog posts I have published at https://kpstrat.com/blog/papers