Privacy and “marketing nirvana” in one package? Meet the Respect Network

The creators of the Respect Network, an ambitious scheme to rewrite the rulebook of online interactions and commerce, launched the service Monday with the promise privacy by design and “marketing nirvana” in one package.

Like the Safe network, Respect is an attempt to create a decentralized successor to today’s ad-centric model, where everyone throws their personal data into centralized services such as Google(s goog) and Facebook(s fb). It’s both a new application platform and a network of private, portable “clouds” of personal data, bound together with a permission-based system that keeps the user in control of her own information.

A user might have a personal cloud hosted on his own home server or that of a participating cloud provider – he can easily move it around if he doesn’t like the hoster’s service. If some social network, for example, wants to access his data, he can permit it do so, then later retract that permission if he wishes. What’s more, he can earn money by allowing brands to set up direct connections with him. And there’s no unauthorized advertising nor data brokerage.

If that sounds too good to be true, note that you need to pay to become a member of this network. Still, here’s why that may be a worthwhile investment.

A new network

The Respect Network also launched a “cloudfunding” campaign on Monday that aims to get a million people to pay $25 each. For their money, they’ll get lifetime memberships to the network, lifetime storage for their “base personal cloud” at a participating cloud provider, and a cloud name for the network. That user name is denoted by an “=” sign, much as a Twitter(s twtr) user’s name begins with an “@” symbol. The first million members will also get to buy up to five additional cloud names, all of which will be tied to the same, unchanging personal cloud number.

Once you’ve got your cloud number and associated cloud name (such as your real name or pseudonymous handle), you can start interacting with services on the network. A “Respect Connect” button will do this job, appearing to the user much like the social login buttons for service like Facebook, Google and Twitter.

Respect Network founder Drummond Reed

Respect Network founder Drummond Reed

According to Drummond Reed, the founder of the Respect Network, the best analogy for the setup is that of banking networks like Visa(s v) – it’s decentralized, a system in which people and businesses on the network connect and communicate directly with one another according to a shared set of rules.

Interoperability is handled by the new-ish XDI format and protocol for semantic data interchange (Reed is co-chair of the XDI technical committee at standards body OASIS.) This is what makes it possible to set up all those permissions for others to link to your data, and have that graph that still work when you move your data elsewhere.

As Reed explained it to me:

“It’s containerization at every level. In XDI the directory structure, all the links – what we call the link contracts – all that’s in XDI. It’s a semantic graph and if you want to move the whole thing to Swisscom you would authorize that and your current cloud service provider host would send literally the entire XDI graph – think database but done as a graph – to Swisscom and Swisscom would literally instantiate it and now your cloud lives there. Like with moving a phone number or email address, what changes is a pointer to the cloud.”

That’s the technical layer. At least as important is the legal layer on top of it. Just as using a Visa card comes with implicit protections, the Respect Trust Framework provides a common set of rules for all participants.

This framework is in some ways the inverse of the terms and privacy policies that you’ll get with Facebook or Google. Those terms can be unique to the service and changed without most users knowing about it. Here, we have what is effectively an enforceable legal contract based on common principles:


As the fifth principle makes clear, the framework also provides a reputation system – if a service provider abuses users’ data, those users can hit back.

What’s the business model?

In other words, users will be paying to be part of a respectful environment, rather than submitting to having their data arbitrarily mined by a “free” service for the purposes of ad targeting.

That growth model can only take the Respect Network so far, of course – not everyone has $25 to stump up. But, according to Reed, membership fees for users are just an initial fundraising step. The real money will in theory come from businesses that will also pay to be on the network, from $50/year for small businesses to $50,000/year for firms with annual revenues above $500 million.

What do they get out of it? Genuine intent. As Reed explained, the idea is to move from a membership fee to a relationship fee:

“The businesses pay the relationship fee. Today a business wants to reach you on a network like Facebook… They learn as much as they can about you then reach out to you. We’re turning that around. Let’s say it’s Audi for example. If you have an interest in Audi at all, you can form a connection to Audi on the Respect Network, a cloud-to-cloud channel where you can share data and they can do the same thing back. You could make a decision to buy an Audi and they can share all the car information with your personal cloud. Because of the nature of the network, from a marketing standpoint it’s nirvana – a trusted connection with you as a customer that never needs to break.”

Here’s the really interesting bit – of the relationship fee that the brand pays, the user gets a third, while the remaining two thirds are split between the cloud providers and the network itself. (And yes, if you self-host your cloud then you’ll be getting close to two-thirds of that fee as the user.)

“It’s making all three of us equal partners in delivering a network and a service where we’re all aligned to protect the user’s data instead of exploit it,” Reed said. “We’re giving you and your cloud service provider a revenue stream, and helping you capture the value of your personal data relationships. We believe it’s going to be sustainable and will finally provide an alternative to the ad-tech model.”

Trusting connections

The Respect Network has about 70 launch partners, three of which — Swisscom, NEC and Neustar – have put in money to help get the network going.

If the network succeeds in getting a million $25 memberships, that would make for the largest crowdfunding campaign thus far. Reed said a third of that money would go into a development grant fund for apps that can run on the network – 10 grant applications have already been processed.

For users, there won’t be a lot going on at this stage, but the applications lined up for release “at or soon after” the network’s launch include a personal medical records service called Transfer Health, an encrypted file-sharing service called Icelock, and a tool called Fuse for connecting your car to your personal cloud.

This gives a pretty good idea of the Respect Network’s potential, and why a system like this is so needed. Cars and homes and all the other things hooked up to the burgeoning internet of things will spew out continuous streams of highly sensitive data – and people may more eagerly buy into these concepts if they are in control of those streams.

Trust is also key to the future of electronic healthcare – do you want to put your most personal data in a centralized cloud, under some startup’s control, or do you want to keep it in your own cloud and let that startup tap into it on your own terms? If setting up and maintaining that personal cloud is simple enough, I’d call that a no-brainer. The avoidance of lock-in is also a major bonus, as is the ability to switch between real and pseudonymous cloud names as the situation dictates (they all map back to the same cloud number, and the user can easily check which name he’s using for which service).

“The fear you have of interacting with a site right now because of what they might do with your data, if that business joins the network that fear goes away,” Reed said. “What we’ve discovered is a scalable business model for privacy on the internet.”

The Respect Network will clearly only take off if sufficient numbers buy into its privacy-by-design promises. Personally I’m tired enough of the ad-tech model and I had $25 lying around, so I’ve signed up. This is the direction we need to be heading, and I’m fascinated to see what such an organized effort as this — 3 and a half years in the making — can achieve.