Peer-to-Peer Start-Up Seeks to Redefine Privacy in Enterprise Space

by   |   July 15, 2013 2:38 pm   |   0 Comments

Drummond Reed, CTO of Respect Network that hosts Connect.Me

Drummond Reed, CTO of Respect Network that hosts Connect.Me

Drummond Reed was running the Open Identity Exchange, a nonprofit organization founded in March 2010 to help streamline the online identity verification process for the U.S. government and large companies, when he became convinced there must be a better way for businesses to interact with their customers online.

Reed was already a longtime veteran of the digital identity space: In 2000, he played an integral role in creating the XDI data interchange protocol, which enabled the portability of a standardized authorization format. He later became a member of the steering committee for Project VRM (for vendor relationship management), an ongoing research and development effort housed at Harvard’s Berkman Center for Internet & Society. What Reed hadn’t done was come up with a business model for realizing his vision of a digital world in which companies and customers negotiated access to personal data on equal footing.

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Now he believes he has found that model, as founder and chief technology officer of Respect Network, a San Francisco-based startup company that allows individuals to control their private information by establishing their own private digital space, known as a personal cloud, and connecting to businesses over a peer-to-peer network.

“Because of the work I was doing around privacy and personal data exchange, I got really excited about the opportunity to do a whole new type of trust framework,” says Reed. “The idea was to build a trust framework for individuals and their personal data, and the network would be a network of people to which businesses would join.”

That framework became a service known as Connect.Me, a professional information registry that functions a little like LinkedIn, but without the centralized social media component. Unlike LinkedIn or Facebook, on which users interact in the company’s communal cloud, Respect Network, which was founded in late 2011, manages the peer-to-peer structure that is created by thousands of individuals signing on to Connect.Me. Reed anticipates businesses will pay for access to Respect Network’s members, mindful that they must play by the rules of its individual members.

Each individual member manages his or her own personal cloud, which can be stocked with branded apps, custom-calibrated by the member to control the flow of personal information. If the member wishes to completely turn off access for a specific vendor, they may do so without consulting that vendor.

‘Consumers Acting on Behalf of Themselves’
Ann Cavoukian, the Information and Privacy Commissioner for the Canadian province of Ontario and an influential online privacy advocate best known for her strong advocacy of the Privacy by Design approach to software programming, was an early supporter of and adviser to Respect Network. “Privacy isn’t anti-business, it’s pro-control,” says Cavoukian. “The beauty of Respect Network is you have consumers acting on behalf of themselves.”

How Connect.Me Works

Connect.Me is an app that is part of the Respect Network, an online service that is building “personal clouds” to build trusted connections to other people and businesses. The Respect Network has about 50,000 members. How the service works:

  1. Individuals register with Connect.Me to claim their online social business card.
  2. Connect.Me members vouch for people they trust in the network to build the reputations of both parties.
  3. When others reciprocate, members achieve higher levels of trust verification.
  4. Businesses establish profiles on Connect.Me with individuals on Respect Network only at the behest of the individual and pay a “relationship fee” for each connection made.
  5. The network grows as more users vouch for each other, and more businesses participate.

The Belgian-based financial information messaging service SWIFT (Society for Worldwide Interbank Financial Telecommunication) was an early founding partner of Respect Network. Peter Vander Auwera, SWIFT’s innovation leader, says he immediately identified the company as an opportunity to build a “geodesic dome of identity,” where each point in the dome provided an entry into trusted financial network. Vander Auwera worked closely with Respect Network to try to build a digital asset grid that would allow SWIFT and its customers to more easily process transactions.

“If you don’t want to end up in the Wild West, you want some sort of trust framework,” says Vander Auwera. Unfortunately, SWIFT’s management ultimately decided to cancel the project, perhaps a sign that peer-to-peer identity verification is still slightly ahead of its time.

But Respect Network knows it’s on to something. The company’s CEO, Gary Rowe, was compelled to join the company after spending more than a decade as president of technology research firm The Burton Group, which was purchased by Gartner in 2009 for $56 million. He had witnessed first-hand how companies often trod over the privacy concerns of their customers, oftentimes to the detriment of their own businesses.

“From my perspective, when I look at that experience, I think it’s fundamentally broken,” says Rowe.

Commercial Use Cases
Rowe envisions a future where a health care provider could offer patients detailed preventative health recommendations online based on analysis of a variety of personal data. This relationship would be enabled by a service such as Respect Network, which allows the health care provider to process an individual’s information according to the patient’s wishes.

Reed offers up another kind of transaction he believes Respect Network can improve with a higher level of trust: buying a car. “There’s the ability for me to signal to car companies that I’m interested in buying in the next month,” he says. “Think of how valuable that is to dealers.”

Respect Network so far has attracted more than twenty founding partners, including Swisscom and Neustar, which both provided some seed funding. Neustar’s vice president of technical strategy, John Kelly, says his company, which operates authoritative telephone directory and Internet registry service, has worked closely with Respect Network from its earliest day of coding. Neustar believes that personal clouds represent the next wave of Web development.

“We see this as a next-generation approach,” says Kelly. “We haven’t figured out the business model yet, but if Respect Network is issuing personal clouds, we want to be a personal cloud provider.”

“There’s a business model here that’s potentially as powerful as an advertising-based model, only it’s completely different,” says Reed. “It turns everything upside down and aligns the service providers of that network with the users to protect their data rather than exploit it.” He compares its functionality with the existing credit card networks, but instead of processing and verifying payments, the network will process and verify personal data.

Respect Network, which currently has seven employees, is planning a public launch for later this year, and soon after that, it hopes to begin charging member companies “relationship fees.” Only time will tell whether individuals and businesses will take to this new form of online privacy management, and trust that it will protect their interests.

As Reed puts it: “Trust is at the heart of the system.”

Alec Foege, a contributing editor at Data Informed, is a writer and independent research professional based in Connecticut, and author of the book The Tinkerers: The Amateurs, DIYers, and Inventors Who Make America Great. He can be reached at alec@brooksideresearch.com.  

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