6 ms·

This is not a dichotomy. We can have a tech sector that’s also compliant with laws like GDPR.

ggreer 7y ago
No, you can't. Since GDPR was rolled out, venture capital investments in the EU have dropped by a third.[1] According to that paper, the companies most hurt are early stage startups. 1. The Short-Run Effects of GDPR on Technology Venture Investment: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278912 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278912
- maldeh 7y ago
  That presumes all early stage startups (as made in the US) are created equal, and any regression in their success rates is bad. Given that 9/10 startups fail even without GDPR, it's not surprising that early stage cos form the Lion's share of failures, and it surely can't be good for any data that was slurped up during whatever these experiments at market fit were doing. And given that the ultimate goal of GDPR is to protect privacy, it doesn't make sense to exempt startups, especially when the early stage stakes are high and a failure to squeeze out every drop of value legally possible out of your data (while your competitors do) could mean the death of your venture. As such, comparing to American standards or even current European standards doesn't quite work when there's a clear shift of the moral bar for GDPR compliance.
  - ggreer 7y ago
    You misunderstand the point I'm making. After GDPR, investments in early stage startups dropped by almost 50% in the EU. If you cut investment in half, you're going to cause some startups to fail that otherwise would have succeeded. Startups are a "hits" enterprise. Most fail. Some are mildly successful. A few are responsible for almost all of the upside. Cutting investment by 50% means that instead of getting a Dropbox and a Spotify, you'll only get a Dropbox. That missing upside is bad for the economy. I'm saying that you can have GDPR or you can have a thriving startup ecosystem. The data shows that you can't have both. Personally, I think the GDPR is a colossal waste of time that only benefits incumbents. I've had to help implement GDPR compliance at a company and it did absolutely nothing to protect the privacy of customers. However it did cost several hundred thousand dollars.
    - maldeh 7y ago
      I fully understand your point that GDPR hasn't been good for investment or startups, and that that the likelihood of a startup succeeding to reach sustainability in the european field has significantly diminished. What I'm rejecting is that that's necessarily an undesirable state of affairs. Does the world really need the likes of Blur or DiscountMugs to succeed, when they have proven woefully incapable of protecting the most basic forms of user data? The tech economy seeing such upheaval right now could be construed as a signal demonstrating how dependent it was on fundamentally unhealthy and untenable data practices that were previously endemic to the industry. I'm sorry that you have had to spend a tonne of money to attain GDPR compliance. I imagine most "incumbents" have had to spend a good deal as well; I can only hope that the next generation of companies have learnt from your company's mistakes and to structure their data processes from day 1 to avoid accruing such sensitive data in the first place. At any rate - a tech sector is possible. A thriving one, that can sustain as much employment? Maybe not quite, there'd have to be some adjustments; but the people would be better off. A tech sector with the same market cap? Unlikely, but we need to get over ourselves and question if preserving the techocracy's wealth is more important here.
      - ggreer 7y ago
        > What I'm rejecting is that that's necessarily an undesirable state of affairs. Does the world really need the likes of Blur or DiscountMugs to succeed, when they have proven woefully incapable of protecting the most basic forms of user data? Again, I'm saying that the cost is borne by all startups, not just the ones you don't like. For startups, the main cost of GDPR isn't fines, it's less investment money and more compliance costs. That means good startups and bad startups alike must pay the price. They have equal chances of being killed in the cradle by these costs. > I'm sorry that you have had to spend a tonne of money to attain GDPR compliance. I imagine most "incumbents" have had to spend a good deal as well; I can only hope that the next generation of companies have learnt from your company's mistakes and to structure their data processes from day 1 to avoid accruing such sensitive data in the first place. The costs weren't high because of anything we were doing that was out of the ordinary. GDPR affects you if you even keep source IP addresses in your server logs. It mandates processes as well as restrictions. You have to train employees. You have to pay lawyers to ensure your processes are compliant. Even if everything you're doing is totally unobjectionable, the costs are significant. Current evidence indicates that many new companies are solving this problem by incorporating outside of the EU and avoiding doing business with EU customers until they're large enough to afford the costs of compliance. > A tech sector with the same market cap? Unlikely, but we need to get over ourselves and question if preserving the techocracy's wealth is more important here. You seem to have a zero sum view of wealth. Tech companies create wealth. They make things people want. Preventing companies from existing doesn't help others (except for incumbents with inferior products).
- tastroder 7y ago
  From that paper: "Of course, there are caveats to these findings. First of all, GDPR has only been in effect in the EU for a short time, and the effects we’ve observed may be temporary, with investors potentially taking a wait-and-see approach." Given the year-over-year trends shown in [0] I feel like one should not overemphasize the timeframe that article looked at. The decline seems to be relatively contained at best and future development is unclear at best. And honestly, who cares, even if we suddenly got 20% of startup failures due to GDPR concerns alone. If those concerns are reasonable I'm totally fine with that. [0] https://news.crunchbase.com/news/decade-in-review-trends-in-seed-and-early-stage-funding/ https://news.crunchbase.com/news/decade-in-review-trends-in-...
  - ggreer 7y ago
    It's not due to larger industry trends. The paper shows that startups in the US got more funding in the same time period, including early stage startups. I remember warning about this when GDPR was being considered. People said it wasn't a concern. Later in 2018 I linked to a draft whitepaper that showed a decline in funding for EU startups. People replied that it was a statistical fluke and that we needed more time before we could draw conclusions. Now it's been a full year and the US-EU investment disparity is higher than ever. At this point I don't know what would change people's minds. It's like talking to climate change denialists. I get the same response: "There's not enough data. The data doesn't support that conclusion. Even if it did, the trade-offs are worth it."
    - tastroder 7y ago
      Okay, let's say there is enough data and you are absolutely correct. How does that invalidate the "Even if it did, the trade-offs are worth it." response? The US-EU funding disparity was always there, in my book this leads to less people copying ethically dubious startup patterns from their US counterparts. If GDPR is the sole reason for the decline... doesn't the benefit of the population, of quite a few countries, outweigh the impact on a few startup folks and their investors?
      - 7y ago
- ganzuul 7y ago
  This is like saying laws against human trafficking are bad because it hurts business.
  - ggreer 7y ago
    You are comparing server logs containing your IP address to human trafficking. That's a fun bit of rhetoric, but it doesn't help anyone in this conversation discover what's true.
    - Avamander 7y ago
      You are turning his argument about things being forbidden by the GDPR being in majority eroding to privacy into something about IP addresses, it's not a fair simplification. That actually doesn't help anyone in this conversation to decide if the privacy gains provided by GDPR are worth it or not.

No, you can't. Since GDPR was rolled out, venture capital investments in the EU have dropped by a third.[1] According to that paper, the companies most hurt are early stage startups. 1. The Short-Run Effects of GDPR on Technology Venture Investment: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278912 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278912

maldeh 7y ago
That presumes all early stage startups (as made in the US) are created equal, and any regression in their success rates is bad. Given that 9/10 startups fail even without GDPR, it's not surprising that early stage cos form the Lion's share of failures, and it surely can't be good for any data that was slurped up during whatever these experiments at market fit were doing. And given that the ultimate goal of GDPR is to protect privacy, it doesn't make sense to exempt startups, especially when the early stage stakes are high and a failure to squeeze out every drop of value legally possible out of your data (while your competitors do) could mean the death of your venture. As such, comparing to American standards or even current European standards doesn't quite work when there's a clear shift of the moral bar for GDPR compliance.
- ggreer 7y ago
  You misunderstand the point I'm making. After GDPR, investments in early stage startups dropped by almost 50% in the EU. If you cut investment in half, you're going to cause some startups to fail that otherwise would have succeeded. Startups are a "hits" enterprise. Most fail. Some are mildly successful. A few are responsible for almost all of the upside. Cutting investment by 50% means that instead of getting a Dropbox and a Spotify, you'll only get a Dropbox. That missing upside is bad for the economy. I'm saying that you can have GDPR or you can have a thriving startup ecosystem. The data shows that you can't have both. Personally, I think the GDPR is a colossal waste of time that only benefits incumbents. I've had to help implement GDPR compliance at a company and it did absolutely nothing to protect the privacy of customers. However it did cost several hundred thousand dollars.
  - maldeh 7y ago
    I fully understand your point that GDPR hasn't been good for investment or startups, and that that the likelihood of a startup succeeding to reach sustainability in the european field has significantly diminished. What I'm rejecting is that that's necessarily an undesirable state of affairs. Does the world really need the likes of Blur or DiscountMugs to succeed, when they have proven woefully incapable of protecting the most basic forms of user data? The tech economy seeing such upheaval right now could be construed as a signal demonstrating how dependent it was on fundamentally unhealthy and untenable data practices that were previously endemic to the industry. I'm sorry that you have had to spend a tonne of money to attain GDPR compliance. I imagine most "incumbents" have had to spend a good deal as well; I can only hope that the next generation of companies have learnt from your company's mistakes and to structure their data processes from day 1 to avoid accruing such sensitive data in the first place. At any rate - a tech sector is possible. A thriving one, that can sustain as much employment? Maybe not quite, there'd have to be some adjustments; but the people would be better off. A tech sector with the same market cap? Unlikely, but we need to get over ourselves and question if preserving the techocracy's wealth is more important here.
    - ggreer 7y ago
      > What I'm rejecting is that that's necessarily an undesirable state of affairs. Does the world really need the likes of Blur or DiscountMugs to succeed, when they have proven woefully incapable of protecting the most basic forms of user data? Again, I'm saying that the cost is borne by all startups, not just the ones you don't like. For startups, the main cost of GDPR isn't fines, it's less investment money and more compliance costs. That means good startups and bad startups alike must pay the price. They have equal chances of being killed in the cradle by these costs. > I'm sorry that you have had to spend a tonne of money to attain GDPR compliance. I imagine most "incumbents" have had to spend a good deal as well; I can only hope that the next generation of companies have learnt from your company's mistakes and to structure their data processes from day 1 to avoid accruing such sensitive data in the first place. The costs weren't high because of anything we were doing that was out of the ordinary. GDPR affects you if you even keep source IP addresses in your server logs. It mandates processes as well as restrictions. You have to train employees. You have to pay lawyers to ensure your processes are compliant. Even if everything you're doing is totally unobjectionable, the costs are significant. Current evidence indicates that many new companies are solving this problem by incorporating outside of the EU and avoiding doing business with EU customers until they're large enough to afford the costs of compliance. > A tech sector with the same market cap? Unlikely, but we need to get over ourselves and question if preserving the techocracy's wealth is more important here. You seem to have a zero sum view of wealth. Tech companies create wealth. They make things people want. Preventing companies from existing doesn't help others (except for incumbents with inferior products).
tastroder 7y ago
From that paper: "Of course, there are caveats to these findings. First of all, GDPR has only been in effect in the EU for a short time, and the effects we’ve observed may be temporary, with investors potentially taking a wait-and-see approach." Given the year-over-year trends shown in [0] I feel like one should not overemphasize the timeframe that article looked at. The decline seems to be relatively contained at best and future development is unclear at best. And honestly, who cares, even if we suddenly got 20% of startup failures due to GDPR concerns alone. If those concerns are reasonable I'm totally fine with that. [0] https://news.crunchbase.com/news/decade-in-review-trends-in-seed-and-early-stage-funding/ https://news.crunchbase.com/news/decade-in-review-trends-in-...
- ggreer 7y ago
  It's not due to larger industry trends. The paper shows that startups in the US got more funding in the same time period, including early stage startups. I remember warning about this when GDPR was being considered. People said it wasn't a concern. Later in 2018 I linked to a draft whitepaper that showed a decline in funding for EU startups. People replied that it was a statistical fluke and that we needed more time before we could draw conclusions. Now it's been a full year and the US-EU investment disparity is higher than ever. At this point I don't know what would change people's minds. It's like talking to climate change denialists. I get the same response: "There's not enough data. The data doesn't support that conclusion. Even if it did, the trade-offs are worth it."
  - tastroder 7y ago
    Okay, let's say there is enough data and you are absolutely correct. How does that invalidate the "Even if it did, the trade-offs are worth it." response? The US-EU funding disparity was always there, in my book this leads to less people copying ethically dubious startup patterns from their US counterparts. If GDPR is the sole reason for the decline... doesn't the benefit of the population, of quite a few countries, outweigh the impact on a few startup folks and their investors?
    - 7y ago
ganzuul 7y ago
This is like saying laws against human trafficking are bad because it hurts business.
- ggreer 7y ago
  You are comparing server logs containing your IP address to human trafficking. That's a fun bit of rhetoric, but it doesn't help anyone in this conversation discover what's true.
  - Avamander 7y ago
    You are turning his argument about things being forbidden by the GDPR being in majority eroding to privacy into something about IP addresses, it's not a fair simplification. That actually doesn't help anyone in this conversation to decide if the privacy gains provided by GDPR are worth it or not.