Led by experts in privacy law and technology security, Durham-based Elroi works to protect data privacy for consumers, while helping businesses comply with data-privacy regulations—and generate more revenue. The privacy management startup was named one of the recipients of NC IDEA’s $10K MICRO grants in October.
The effort to protect data privacy is a fairly new practice. The European Union’s General Data Protection Regulation (GDPR)—the toughest privacy and security law in the world—went into effect less than six years ago, while California was the U.S. first state to adopt consumer privacy legislation with its California Consumer Privacy Act (CCPA) taking effect on Jan. 1, 2020. Even as consumer data becomes potentially more profitable for businesses, the less prepared they are to comply with these regulations.
According to a 2022 study from data privacy compliance company CYTRIO, 90% of the companies they researched are not fully compliant with CCPA requirements. The study further indicated that B2B and B2C companies are poorly unprepared for CCPA and GDPR compliance, with GDPR violation fines totaling in excess of $2.5 billion.
Elroi’s Founder and CEO Rachel Cash experienced these problems in data privacy while working at an insurance company. She recognized that the main factor that was missing from data privacy processes were the consumers themselves. Believing that privacy is a right by the consumer to protect and control, she founded Elroi’s privacy management platform.
“When you think about security in the context of your house, you get to decide who comes in and out of your house,” Cash said. “That’s the same case with privacy… It all comes back to giving consent to the right people that you’ve authorized to have access to your digital persona.”
While Elroi does offer the option for consumers to control their own data, the startup seeks to target small- to mid-sized businesses struggling with tons of unnecessary data and where to put them. Cash said that advertising and marketing for these businesses can be expensive, jeopardizing its return on investment. Elroi’s data modeling can make any ad spend more efficient.
“When a business works with our model, they’ll have access to the consumer demographic that opted into, say, a barber shop up the street,” Cash explains. “That may not mean that the customer is 100% going to come to your barber shop, but there’s a higher chance that that customer fits the demographic because they’ve opted in their personal data.”
Elroi will first work with a business to help manage CCPA and GDPR data compliance. They then identify growth opportunities through privacy-gap action plans, deploy those plans and then work with implementing changes into the business’s model. Businesses will then work with their own consumers through emails to introduce Elroi’s platform, where the consumer can opt in to that business’s data collection.
According to Cash, what makes Elroi unique is its holistic approach to addressing the systems that misuse people’s private data, especially in underrepresented and marginalized communities. Under modern-day surveillance capitalism, businesses and individuals can collect and monetize online data at an unprecedented scale with little limitation.
For historically marginalized groups, privacy violations have put them at risk of discrimination and ostracization. For example, after the overturn of Roe v. Wade in 2022, many were concerned about how data tracking of period cycles or online searches for abortion pills could affect a person’s legal liability in getting, aiding or performing an abortion.
That’s why Elroi is currently focused on community colleges, as they have some of the largest demographics of marginalized students who have been impacted by biased and misused data usage. According to Cash, college students provide the most useful data. When you think about political elections, the data set of 18-year-olds will be among the most valuable since this demographic will be a new cohort in the next political season.
If and when these students allow their data to be sold back to companies via Elroi, the diversity of the user base will help create models that are less biased, creating more representation across all data.
“In the case of AI, if you only allow data from Caucasian males, then the data will spit out answers that will be biased towards Caucasian males,” Cash said. “If you give it data that’s filled with a diverse population who’s opted in, then you can help remove bias and other [flawed] decision-making processes.”
Elroi will be implemented in businesses that believe in data privacy and want their consumers to have more access to their data. The business will send an email to the consumer, letting them know that they have been onboarded to the Elroi platform. Those businesses will ensure the consumer has rights to data privacy and then allows them to opt in or out. Cash said that those who opt in, for data intensive purposes, will get the benefit to access pre-loaded data from the company that the company already has.
For businesses, the platform is offered on an annual or monthly billing subscription. For the consumer, the Elroi platform is free to use and can be downloaded as a browser extension. The consumer would make the decisions about the types of data they want to share, such as behavioral data or geolocation.
By allowing the data to be controlled by the consumer, it allows businesses to ethically source its information, increasing the trust between consumers and the businesses. According to Cash, businesses also have the opportunity to generate more revenue, as more consumers come on to the platform and start to fit the data demographic that they want.
“We really are just trying to make sure that consumers make the choices about who they want to share data with, what kind of data they want to share,” Cash said. “So we’re really trying to live within a holistic approach and standard to how people actually live their lives.”
