Starting a consumer-facing technology company or developing a new application to make a consumer’s life easier or more fun is an exciting journey. At this stage, you are all about the development, getting the product or service to market, and making sure it can scale. But neglecting the privacy implications of your product or service during the development stage is a big mistake that will come back to haunt you later.
Imagine, for example, that your dream of building a great company has come true and you are faced with an acquisition offer. During the customary due diligence phase, you quickly discover that your privacy house is not in order. Why? You neglected to plan for a situation in which you might have to transfer user data to an acquirer. The entire shape of the deal is now altered because there are significant tax consequences for the new structure and reserves or holdbacks are required that postpone or lessen the value you worked so hard to build. All this can be avoided with a little privacy by design. Here are a few pointers:
1. If you don’t need the information, don’t collect it. Avoid the engineering gene that says collect as much information as possible because it might be useful in the future.
2. If you collect it, protect it. This is essentially strict liability with the regulators. If you lose the data, you will end up with an FTC-approved third party running your IT for the next 20 years.
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