Security and privacy, startups, and the Internet of Things: some thoughts

17.51, Tuesday 31 Oct 2017

Upcoming event in London: I’m going to be speaking about the Internet of Things, security, and privacy with Sarah Gold, CEO of IFat Machines Room (an awesome east London makerspace), tomorrow.

Insecure Futures: Privacy, Security and Connected Devices (Weds 1 Nov, 6pm): RSVP here.

The event is part of a series of panels curated by Machines Room and Kickstarter. Sarah and I will be doing this as a “fireside chat.” Should be thought-provoking – these are some chewy topics, and Sarah is an expert. Her consultancy researches trust, policy and design for clients with Google and Facebook with output both practical and speculative.

We’ve each been asked to spend 5-10 minutes at the beginning of the session to set out our stand, so to speak. So this is my current draft on what I’m going to say. Comments welcome; I’ll evolve it some before speaking.

On IoT, security, and privacy. But security first:

Let me say a few words about security first. Then privacy.

And really, because we’re talking about the Internet of Things, we’re talking about the security of a device in people’s homes and in businesses, what we’re talking about is the security of data and other devices on the trusted networks in those places.

With my investor hat on, a startup that doesn’t take security seriously is obviously a problem because it’s saving up problems down the road – it will be harder to acquire, and it has the potential of being part of something catastrophic.

For me, one tell around this - a technology red flag - is when companies build their own stack themselves for secure connection of devices to user accounts (called provisioning), or for performing over-the-air (OTA) updates. These two are bellwethers: if something isn’t right here, it’s likely that security hasn’t been considered elsewhere in the stack.

It’s easy to convince yourself, as a startup, that there is no solution out there that meets your needs for provisioning and updates. But over the last 12 months, the technology stack for connected devices has matured. And honestly, these stacks come with features that you will never get round to building yourself. So it’s worth looking for existing solutions.

resin is an interesting example of a useful stack. One of the things resin makes easy is over-the-air updates for device software. But because some of their users run this software for drones, they also include a feature that allows the drone to postpone the software update until it has safely landed. That’s a useful feature. Let’s say you’re building a cash register: it would be great to have a feature where it can postpone updates till after the lunch rush is over. That’s the same thing. But will you get round to building it yourself? Probably not.

So building your own stack is hard to get right, and more importantly it’s expensive to keep up to date. Over months, as the technology landscape evolves, a resource constrained startup may find itself lagging. And that’s where security problems emerge.

Building your own artisan stack feels like an expensive indulgence in most cases. The line to keep in mind is Werner Vogal’s maxim - Vogal the CTO of Amazon - his maxim of no undifferentiated heavy lifting. That is, don’t put significant engineering resource into stuff that isn’t your core business.

But security isn’t just technology. It’s design.

It’s what you encourage users to do. A friend of mine in San Francisco had some smart lighting and smart plugs some years ago. It has this great feature where if you’re on the same wi-fi network, it automatically associates the devices with your app so you can control them. And then, even when you’re not on the network, you can turn the lights on and off. Handy.

So some months after staying with my friend, I discover - from London, while demoing the app - that I can turn on the lights in his front room. I discover this because he texts me, after I’ve been doing this for some weeks, to ask if it’s me turning on and off his lights at 4am. Yes, yes it is.

Of course I reckon with this power I can possibly start a fire. Lights on and off as quick as possible. No security stack is going to help. But thoughtful design can.


The tension for startups is that design for thoughtful design, and therefore for good security requires you to know what your product and service is doing, but in the early stages you may have to change the product quite a few times to get it right.

Now you think I’m going to say that this is a difficult decision, blah blah blah, that startups should consider security early on, despite this.

I’m not going to say that. I’m going to say that maybe a startup should ignore security, just a little bit.

What I mean is: if I meet a startup who has spent ages on its security, pre getting some real customer traction, I am going to be nervous that they have over-engineered the product, and won’t be able to iterate. The product will be too brittle or too rigid to wiggle and iterate and achieve fit.

So it’s a balance.


One of the reasons that security matters is because it can lead to privacy being violated. Or rather, let me clarify:

Poor security can mean a startup’s customer gives up privacy in an unintended way. That’s going to damage sales.

But what’s more of a preoccupation to me is when privacy is reduced in an intended way. You see this a lot when a startup has figured out how to make a business work by being not quite straight-up about what they’re doing with the data they’re collecting.

For example:

  • A consumer-facing startup that gets its product out for free, and then collects user data to sell later. I don’t believe consumers can ever really consent to data use in this fashion: it’s never really made clear. It pulls the startup’s interest and the consumer’s interest out of alignment, and that - in my view - makes it hard for the company to grow in a clear way. This contradiction at their heart will make it tough to make product decisions
  • A B2B startup which operates by collecting data on behalf of its clients – for example, collecting images of faces of shoppers for retail analysis. This can be legally legitimate. But sometimes it can be legitimate but still wrong: if properly informed, a regular consumer would feel uncomfortable

You would be surprised how many companies like these I encounter. Or maybe you wouldn’t be.

I think it should be a point of greater social concern that consumers are asked to consent to data retention and usage when even the people collecting the data don’t know what it may be used for down the line. Object recognition and facial recognition is getting really good – but it wasn’t great or well known at the point I subscribed to most of the services I now trust with my data. Can it really be said I consented to this? So we need a better way to discuss this, in society.

With a more commercial hat on I subscribe to the view that, in most cases, big data is not an asset, it is a liability. If it’s not necessary for the business model, then it’s an expense to keep it secure. So don’t keep incur that expense. For example, you don’t need to keep credit card numbers to take payments. OIutsource it. You don’t need to move video to the cloud to data to do image recognition – we have machine learning at the edge for that now.

But mainly, I think about this: is it skeevy?

The tide has turned on privacy, just as it did for sustainability. For ages being sustainable was something companies did just to feel good about themselves. Now it’s both consumer expectation and good business.

With privacy? For B2B startups I feel that being privacy conscious is becoming a differentiator and should be advertised as such. No potential business customer will want to be associated with the risk of leaks, being hacked, or potential damage to the brand from revealed “skeevy” behaviour.

It’s not a negative thing. There’s opportunity here too.

I want to end with an example which is Hoxton Analytics, a company I had the privilege of working with at the R/GA IoT accelerator I ran earlier this year. By the way, we’re running another one, and applications close on 7 December, just a few weeks from now. We can talk about that afterwards.

Hoxton Analytics supply, for their clients, pedestrian footfall intelligence. They count the number of people walking in and out of your shop.

Historically this has been done with infra-red beam interruption. Well, that can’t track groups or whether people are going in or out.

So instead you can do it by tracking smartphone signatures. Information-rich but not everyone has their Bluetooth or wi-fi turned on.

So you can really amp it up and monitor footfall with cameras doing facial recognition: that doesn’t fly in Europe, it’s personally identifiable information. Fine elsewhere in the world though.

Hoxton takes a different approach. They have cameras right down low on the floor, and they use machine learning - on the device - to recognise shoes.

It’s crazy accurate. 95% accurate. It can also count group sizes, and whether people are going in or out. So it can do capacity.

It also doesn’t store personally identifiable information so it’s good in Europe.

But get this. Because they’ve built this solution, it means they can also use it in public places. So you can point the camera out of the window and see how many people are walking past, versus how many people are walking in. This is the holy grail, like a conversion funnel, like Google Analytics, but for physical retail. And they’ve got there by considering privacy not as a product constraint, but as a product feature.

Wrap up:

That’s where my head’s at regarding security and privacy. I’m going to chew on these thoughts a bunch before the discussion with Sarah, and I’d welcome your thoughts – either on my views as laid out above, or on questions to ask her.

I don’t know if there are any tickets left but if there are do come along and if you’re already signed up, then I look forward to seeing you on Wednesday night.