Investing in Spartacus - Protecting Your Privacy
We spend a lot of time online - from entertainment to communicating with friends and family to work. Globally, users are spending up to 155 minutes a day online, and that behavior has only been accelerated by COVID-19, where now all of our activities have shifted to digital. As much as we want to avoid it, our information is all over the web and the companies we entrust to keep that data safe are facing wave-after-wave of leaks and breaches. Data breaches have exposed 4.1 billion records in the first half of 2019 alone, prior to the increase of online activity as a result of the pandemic. The need for increased data and privacy protection is more necessary now than ever.
The consumer digital safety space has seen spiked interest in the wake of recent data breaches (e.g., recent Equifax breach where 150M Americans’ data was compromised). Over 200M Americans have open credit files, and they’re willing to spend on preserving their online identities: Americans spent $1.4B to freeze their credit in the wake of the Equifax breach. In this landscape, it can be hard for a consumer to figure out what their risk level is and what they should do about it.
This is why I’m thrilled to announce our investment in Spartacus, an online platform helping people take back control of their identity via three tools: 1) a free digital risk score analysis 2) a credit monitoring feature and 3) the ability to remove personal information from 3rd party data brokers to minimize consumers’ ‘attack surface.’ Co-founder and CEO Seth Goldstein has been a pioneer in the internet world. Prior to Spartacus, Seth founded Majestic Research (one of the first research firms focused on the internet economy) and Turntable.fm (the first company to create a social music experience). We sat down to discuss his vision for Spartacus, why he chose to venture into the world of online security, and what’s in store for the future.
What is the consumer behavior that you caught onto that drew you to privacy as a service?
My overall approach to privacy has a lot to do with my personal experience working in tech for many years. When you see the internet evolve the way it did like I did, from the very beginning, surveillance capitalism, privacy insurance and privacy services make a lot of sense. The internet was made for you but in the past decade it's been working for someone else. Data is a dirty business. We have to start cleaning it up.
How does Spartacus work?
On our homepage, you can submit your email address into our form for a free privacy assessment, which checks if the information associated with the email you’ve provided is exposed. Based on our findings, we’ll give you a Privacy Risk Score. The Privacy Risk score is essentially a free digital health checkup; if you have a high score, you’ve likely been involved in a data breach before, have passwords that are exposed, and/or have information that’s being sold by third parties (data brokers) without your consent. Most people aren’t even aware of when data breaches occur or that such companies even exist, but data brokerage is a $200 billion industry, and it’s still growing. By aggregating the data that’s exposed, we’re giving people a chance to take back control of their privacy before things get worse. Spartacus will then start scrubbing that data off of the web for its members.
We also recently launched phase two of Spartacus, which includes other privacy services like password monitoring, fraud restoration, credit monitoring, a $1 million identity theft insurance policy, lost wallet assistance and a 24 hour fraud services hotline. You can find out more about these services on our website.
Why did you name it Spartacus? Why should consumers care about Spartacus?
Spartacus is a Roman gladiator who freed slaves from oppression. At the most primal level, we are about empowerment and agency and giving people back control. We have a track record as a trusted fiduciary. Spartacus cares about its customers, helping them fix what's broken and delete what's already out there in areas of the internet it doesn't belong. Our mission is to empower people and educate them on why it's important to protect their information now. Most people don't know the repercussions of giving away data, so educating them on the 'why' is really important. It shouldn't take something catastrophic to make someone see why privacy is important but sometimes it does.
How do consumers see the value of a service like Spartacus? How do you see this evolving and increasing over time, either through the macro environment (everything from COVID to big tech backlash to data breaches that almost seem routine) or the evolution of your offering?
Because of the current macro environment, the market is in fact moving in our direction, whether consumers like it or not. With COVID, people are staying inside to protect themselves, so the new way of life has been to share and do absolutely everything on the internet. Everything. Work calls, doctors appointments, therapy sessions — you name it. As we continue our daily lives, private conversations and very personal moments aren’t 'private' anymore. Then came the issue with contact tracing. Tracking our every move may help stop the spread of COVID -- but will that information one day be used against us? Who controls this information? No one currently has the answers to these questions yet. We're also seeing privacy come up again from those who are peacefully protesting and who want to stay anonymous while doing so. In a perfect world, it would not take the world coming to a crashing halt to fix one's privacy problem.
Seth, you started many companies and were on the cover of WSJ in 1996 with your first Internet company. How have your views of social media platforms evolved over the years? What advice do you have for startup founders growing in 2020?
The evolution of social media is one of the most fascinating things anyone in the tech industry ever witnessed but none of it came as a surprise to me. If some of the best and brightest minds of our generation are being put to work on building and growing a monetizing data machine, this is what you get. Facebook is an information gold mine. Am I against social media platforms? No, not at all. They are where you go today to spread your message, be seen and heard, and monetize your most valuable asset. Is regulation important? Absolutely. We'll start to see more founders of major social media platforms get into a more virtuous cycle, or at least try to do the right thing.
The advice I would give to startup founders in 2020 is to be authentic. Listen to your team. Make sure they feel heard and seen. Come from a place of empathy and vulnerability. This means acknowledging the hardships and creating the space they need, which has become more important than ever in light of recent events. Check in every day, but break up the week. Try to spend at least one workday off Zoom and get back to tech-free simplicity, such as reading, and writing, and spending time outdoors.
Also, make sure you’re over-communicating with your team. Prioritize conversations around your company’s metrics and goals. Reiterate your company’s mission and what is really required to achieve the next milestone. Lean on the data, and use it to inform your decisions. But don’t be afraid to embrace innovation, move fast, and make mistakes while learning, iterating and growing.
What were you looking for in investor partners? What has your experience with M13 been thus far?
We were looking for partners that valued our character, believed in our vision and brought positive energy to the table. Not to mention a broad talent network and experience with growing direct to consumer brands. Our experience so far has been great, with tangible value-add in terms of connecting us with specialized marketing resources that we never would have found on our own, access to in-house advice in terms of recruiting and communications, and real emotional support from founders across the M13 portfolio who are grappling with many of the same startup issues we are facing, heightened of course by the anxiety of the pandemic and the pain of racial injustice that has reared its head once again in this country. We feel so fortunate to have Gautam and his partners at M13 on our side as we help people take back their privacy with Spartacus.