Reed Kavner

The Path Fiasco Will Lower Your Conversions

Regardless of your opinion of Path’s sneaky activities, if you are part of the startup community, you should think twice before you forgive and move on. Their lapse in judgement will lower your conversions.

When the news broke that Path had been peeking into users’ address books and saving a copy on its servers, I didn’t much care. Sure, I thought it was immoral at best to do this without informing the user and it was certainly risky from a publicity perspective, but it was just another example of a startup that figured it would beg for forgiveness rather than ask for permission.

As the news, opinions, apologies, and absolutions swirled around the internet, I still didn’t much care.

But today I care.

Today I read Nick Bilton’s NY Times piece about Path where he poses the question “What’s the big deal anyway?” and immediately answers it:

The big deal is that privacy and security is not a big deal in Silicon Valley. While technorati tripped over themselves to congratulate Mr. Morin on finessing the bad publicity, a number of concerned engineers e-mailed me noting that the data collection was not an accident...

(emphasis added)

That sucks. The Path fiasco is contributing to the public perception that startups routinely abuse users’ trust with impunity. And as that thought permeates the brains of consumers everywhere, it has the potential to hit me where it most hurts: my metrics dashboard.

It’s a bit of a miracle that startups like Mint, where part of user registration is handing over the keys to your bank and credit card accounts, have been able to get off the ground—let alone become great successes. Consumers are astoundingly trusting and we as purveyors of new products and services benefit from that endlessly. But when a story about a startup abusing users’ trust and not being held accountable by the industry breaks, a chunk of that trust erodes and a few new visitors to your site decide that they’d rather not hand over their data. Good luck, Cake Health.

There’s a lot of chest thumping in The Valley about being a “hacker” or a “hustler.” And that’s awesome if being a hacker means “ building something quickly or testing the boundaries of what can be done” and if a hustler is a founder who masterfully pits VC against VC to get a better valuation. While we should celebrate those who find success in hacking or hustling, we must be careful that we don’t let the spirit of these terms become wed to the idea (or even the perception) that part of starting a business is a willingness to embrace moral ambiguity and play games with users’ trust.

Path has a beautifully-designed product and it’s a shame that this is the context in which many users are being introduced to it. I hope the company is able to recover and move forward. And in doing so I hope they recognize the irreparable systemic damage they leave in their wake and I implore anyone with an interest in this community and industry to make user privacy and security a big deal.