Two-year-old Snapchat has achieved a multibillion-dollar valuation by creating a technology for disappearing selfies aimed at teenage users. Now companies are pitching similar apps that they say provide untraceable message delivery, except they’re designed for corporate users that want a higher level of security than Snapchat can offer. The latest is Confide, a text-based iOS app released on Jan. 8 by former AOL (AOL) executive Jon Brod and Howard Lerman, chief executive officer of location-services company Yext. Such startups are betting that corporate audiences will be hungry for a secure mobile messaging app suited to their needs.
Confide’s founders say their service is aimed at professionals who want to speak candidly about delicate personnel or legal matters without leaving a trail that exposes proprietary information. “Think about the times someone sends a memo that says, ‘Confidential, do not forward,’ or when someone asks for your personal e-mail to go off the company’s network, or when it’s something you’d rather talk about on the phone or in person, but don’t have time,” says Brod, the company’s president, who previously headed AOL’s venture team and its troubled local news network Patch. Instead of hiring a sales force or pitching chief information officers, his plan is to spread the app through individual word of mouth, as cloud-sharing service Dropbox did, until enough of a company’s employees are using it that the company formally incorporates the software into its business practices.
There’s just one problem, and it’s potentially a big one. Companies face heavy regulatory pressure to preserve—not destroy—business e-mails, financial records, and other documents. “Whenever you’re dealing with business tools, there still needs to be some kind of audit trail and accountability,” says Vanessa Thompson, an analyst for market researcher IDC. Last month, the Financial Industry Regulatory Authority fined Barclays (BCS) $3.75 million for its decade-long failure to retain certain electronic records, e-mails, and instant messages. If employees are discussing critical information or creating financial records, those probably need to be retained, says Scott Whitney, vice president of product management at social media compliance consultancy Actiance.
Other companies experimenting with self-destruct services for business face the same challenge. Companies such as Dashlane and Digify let users send documents that can be set to delete themselves after a certain period of time. Dashlane CEO Emmanuel Schalit says not every stray thought communicated and then dissolved electronically should conjure images of Enron employees shredding doctored accounting records, though he acknowledges that “when companies destroy things, it’s not always the best sign.”
Brod, Confide’s president, says it’s up to users to make sure they exercise proper caution and judgment. His app’s interface looks like an e-mail inbox, except that when you open a message, the text is covered by colored boxes that you have to run your fingers over to remove. Earlier words are quickly covered again, making the message more difficult to copy via screenshot than those on Snapchat. Confide’s additional security advantage, co-founder Lerman says, is end-to-end encryption, which means that the key needed to decrypt a message resides only on the recipient’s mobile device and is never transmitted over a company’s servers. That’s a step that would make government surveillance, or the Dec. 31 publication of millions of user phone numbers hacked from Snapchat, much more difficult to achieve. “We don’t have the technology to read your messages,” says Lerman, who’s still running Yext. Because Confide doesn’t store any messages on its servers, it doesn’t have the ability to retrieve them if a company, or the National Security Agency, comes knocking.
Confide could face a much higher barrier to entry if Snapchat were to market itself more aggressively to business users. (Snapchat spokeswoman Mary Ritti declined to comment on the company’s plans.) It’s also unclear whether businesspeople will commit to using such a service, but Brod and Lerman can point to the success of Facebook’s (FB) corporate copycats. LinkedIn (LNKD) and Jive (JIVE) launched successful initial public offerings in 2011, while Yammer was acquired by Microsoft (MSFT) in 2012 for $1.2 billion. “We just think it’s incredibly important, like in the offline world, to provide the option of impermanence online,” says Brod.