Snapchat-Style Startups Bring Self-Destructing Data to Business
2014-01-08 19:06:33.183 GMT
By Sarah Frier
Jan. 8 (Bloomberg) -- Two-year-old Snapchat Inc. has
reached a multibillion-dollar valuation by creating a technology
embraced by teenagers for sending disappearing selfies.
Now, startups are pitching similar applications that they
say send messages that can’t be traced and are designed for
corporate users who want a higher level of security than
Snapchat can offer. One is Confide, which released a text-based
app for Apple Inc.’s iOS mobile software today and is run by
former AOL Inc. executive Jon Brod and Howard Lerman, chief
executive officer of location-services company Yext Inc.
Such companies are betting corporate audiences will be
hungry for a secure mobile-messaging app suited to their needs,
Bloomberg Businessweek reported on its website. Confide’s
founders say their service, with messages that disappear once
the recipient closes them or replies, is aimed at professionals
who want to speak candidly about delicate personnel or legal
matters without leaving a trail that exposes proprietary
information.
“Think about the times someone sends a memo that says,
‘Confidential, do not forward,’ or when someone asks for your
personal e-mail to go off the company’s network, or when it’s
something you’d rather talk about on the phone or in person but
don’t have time,” said Brod, Confide’s president, who
previously headed AOL’s venture team and its troubled local news
network, Patch.
Preservation Pressure
Instead of hiring a sales force or pitching chief
information officers, his plan is to spread the app through
word-of-mouth, like cloud-sharing service Dropbox Inc. did.
Their goal is for companies to start adopting the software after
enough employees are using it.
There’s just one problem, and it may be a big one.
Companies face heavy regulatory pressure to preserve -- not
destroy -- work e-mails, financial records and other documents.
“Whenever you’re dealing with business tools, there still
needs to be some kind of audit trail and accountability,” said
Vanessa Thompson, an analyst at market researcher IDC.
Last month, the Financial Industry Regulatory Authority
fined Barclays Plc’s investment-banking unit $3.75 million for a
decade-long failure to retain certain electronic records, e-
mails and instant messages. If employees are discussing critical
information or creating financial records, those probably need
to be saved, said Scott Whitney, vice president of product
management at social-media compliance consulting firm Actiance
Inc.
Users’ Judgment
Other companies experimenting with self-destructive
messaging services for business face the same challenge.
Dashlane Inc. lets users send documents that can be set to
delete themselves at a preset time.
Not every stray thought communicated and then dissolved
electronically should conjure images of Enron Corp. employees
shredding doctored accounting records, according to Dashlane CEO
Emmanuel Schalit -- though “when companies destroy things, it’s
not always the best sign,” he said.
Confide’s Brod said it’s up to users to exercise proper
caution and judgment. His app’s interface looks like an e-mail
inbox, except that when you open a message, the text is covered
by colored boxes you have to run your fingers over to remove.
Earlier words are quickly covered again, making it more
difficult to capture the message in a screen shot than it is on
Snapchat.
Confide’s other security advantage, co-founder Lerman said,
is end-to-end encryption, which means the key needed to decrypt
a message resides only on the recipient’s mobile device. That’s
a step that would make government surveillance, or the recent
publication of millions of user phone numbers hacked from
Snapchat, much more difficult.
Private Messages
“We don’t have the technology to read your messages,”
said Lerman, who still runs Yext. Confide doesn’t store any
messages on its servers, so it doesn’t have the ability to
retrieve them if a company, or the National Security Agency,
comes knocking.
Confide may face a much bigger challenge if Snapchat tries
to market itself more aggressively to business users. Mary
Ritti, a spokeswoman for Snapchat, declined to comment.
It’s also not clear whether executives will commit to using
such a service, but Brod and Lerman point to the success of
Facebook Inc.’s corporate copycats. LinkedIn Corp. and Jive
Software Inc. had successful initial public offerings in 2011,
and Yammer Inc. was acquired by Microsoft in 2012 for $1.2
billion.
“We just think it’s incredibly important, like in the
offline world, to provide the option of impermanence online,”
Brod said.
For Related News and Information:
Snapchat to Target Breaches Show Holiday Season Vulnerability
NSN MYSQ1J6TTDS1 <GO>
Facebook’s Instagram Adds Messaging Service to Fend Off Startups
NSN MXPAAT6S972W <GO>
Facebook Said to Offer $3 Billion for Snapchat to Attract Teens
NSN MW8A9D6K50Z8 <GO>
Snapchat M&A news: 0703275D US <Equity> TCNI MNA <GO>
Top technology news: TTOP <GO>
Top stories: TOP <GO>
--Editors: Jeff Muskus, Jillian Ward
To contact the reporter on this story:
Sarah Frier in San Francisco at +1-415-617-7134 or
sfrier1@bloomberg.net
To contact the editor responsible for this story:
Jeff Muskus at +1-212-617-3278 or
jmuskus@bloomberg.net
2014-01-08 19:06:33.183 GMT
By Sarah Frier
Jan. 8 (Bloomberg) -- Two-year-old Snapchat Inc. has
reached a multibillion-dollar valuation by creating a technology
embraced by teenagers for sending disappearing selfies.
Now, startups are pitching similar applications that they
say send messages that can’t be traced and are designed for
corporate users who want a higher level of security than
Snapchat can offer. One is Confide, which released a text-based
app for Apple Inc.’s iOS mobile software today and is run by
former AOL Inc. executive Jon Brod and Howard Lerman, chief
executive officer of location-services company Yext Inc.
Such companies are betting corporate audiences will be
hungry for a secure mobile-messaging app suited to their needs,
Bloomberg Businessweek reported on its website. Confide’s
founders say their service, with messages that disappear once
the recipient closes them or replies, is aimed at professionals
who want to speak candidly about delicate personnel or legal
matters without leaving a trail that exposes proprietary
information.
“Think about the times someone sends a memo that says,
‘Confidential, do not forward,’ or when someone asks for your
personal e-mail to go off the company’s network, or when it’s
something you’d rather talk about on the phone or in person but
don’t have time,” said Brod, Confide’s president, who
previously headed AOL’s venture team and its troubled local news
network, Patch.
Preservation Pressure
Instead of hiring a sales force or pitching chief
information officers, his plan is to spread the app through
word-of-mouth, like cloud-sharing service Dropbox Inc. did.
Their goal is for companies to start adopting the software after
enough employees are using it.
There’s just one problem, and it may be a big one.
Companies face heavy regulatory pressure to preserve -- not
destroy -- work e-mails, financial records and other documents.
“Whenever you’re dealing with business tools, there still
needs to be some kind of audit trail and accountability,” said
Vanessa Thompson, an analyst at market researcher IDC.
Last month, the Financial Industry Regulatory Authority
fined Barclays Plc’s investment-banking unit $3.75 million for a
decade-long failure to retain certain electronic records, e-
mails and instant messages. If employees are discussing critical
information or creating financial records, those probably need
to be saved, said Scott Whitney, vice president of product
management at social-media compliance consulting firm Actiance
Inc.
Users’ Judgment
Other companies experimenting with self-destructive
messaging services for business face the same challenge.
Dashlane Inc. lets users send documents that can be set to
delete themselves at a preset time.
Not every stray thought communicated and then dissolved
electronically should conjure images of Enron Corp. employees
shredding doctored accounting records, according to Dashlane CEO
Emmanuel Schalit -- though “when companies destroy things, it’s
not always the best sign,” he said.
Confide’s Brod said it’s up to users to exercise proper
caution and judgment. His app’s interface looks like an e-mail
inbox, except that when you open a message, the text is covered
by colored boxes you have to run your fingers over to remove.
Earlier words are quickly covered again, making it more
difficult to capture the message in a screen shot than it is on
Snapchat.
Confide’s other security advantage, co-founder Lerman said,
is end-to-end encryption, which means the key needed to decrypt
a message resides only on the recipient’s mobile device. That’s
a step that would make government surveillance, or the recent
publication of millions of user phone numbers hacked from
Snapchat, much more difficult.
Private Messages
“We don’t have the technology to read your messages,”
said Lerman, who still runs Yext. Confide doesn’t store any
messages on its servers, so it doesn’t have the ability to
retrieve them if a company, or the National Security Agency,
comes knocking.
Confide may face a much bigger challenge if Snapchat tries
to market itself more aggressively to business users. Mary
Ritti, a spokeswoman for Snapchat, declined to comment.
It’s also not clear whether executives will commit to using
such a service, but Brod and Lerman point to the success of
Facebook Inc.’s corporate copycats. LinkedIn Corp. and Jive
Software Inc. had successful initial public offerings in 2011,
and Yammer Inc. was acquired by Microsoft in 2012 for $1.2
billion.
“We just think it’s incredibly important, like in the
offline world, to provide the option of impermanence online,”
Brod said.
For Related News and Information:
Snapchat to Target Breaches Show Holiday Season Vulnerability
NSN MYSQ1J6TTDS1 <GO>
Facebook’s Instagram Adds Messaging Service to Fend Off Startups
NSN MXPAAT6S972W <GO>
Facebook Said to Offer $3 Billion for Snapchat to Attract Teens
NSN MW8A9D6K50Z8 <GO>
Snapchat M&A news: 0703275D US <Equity> TCNI MNA <GO>
Top technology news: TTOP <GO>
Top stories: TOP <GO>
--Editors: Jeff Muskus, Jillian Ward
To contact the reporter on this story:
Sarah Frier in San Francisco at +1-415-617-7134 or
sfrier1@bloomberg.net
To contact the editor responsible for this story:
Jeff Muskus at +1-212-617-3278 or
jmuskus@bloomberg.net