Back from the brink: He fought back after startup lost all clients in PR crisis

In late 2015, Hitesh Chawla and his then three-year-old startup were making international headlines for all the wrong reasons. Major outlets such as Wired and The Atlantic had branded his technology firm’s service as creepy and intrusive for the way it secretly tapped into the microphones of people’s phones.

The tech, under the name Silverpush, was created to allow app makers and brands to hear the ads that people were watching on TV. It would then prompt push notifications for related products on their phones.

“We didn’t foresee that,” says Chawla of the controversy. “Because there was no reason for the backlash, actually.”

Hitesh Chawla / Photo credit: Ad:tech New Delhi

Talking for the first time about the incident, he tells Tech in Asia that the service did “nothing wrong.” It was only using a phone’s mic to detect inaudible frequencies in the TV ads, and no audio from the mic was being sent to the firm’s servers, the founder and CEO claims. He adds that the service only picked up these ultrasonic tones above the usual frequency of the human voice, so any chatter would not be picked up.

But the backlash was huge. So huge that it merits its own subhead.

Huge backlash

The controversy rumbled on into 2016 as the ears behind Silverpush’s tech, audio beacons, came under scrutiny for the first time. In March of that year – four months after Chawla’s startup first received heat – the Federal Trade Commission (FTC), the US trade watchdog, issued a warning letter to 12 app developers that had embedded Silverpush’s tech across 15 Android apps.

The FTC likely noticed the startup as Silverpush is incorporated in the US, despite the firm being based in Gurgaon, India.

“These apps were capable of listening in the background and collecting information about consumers without notifying them,” said Jessica Rich, the director of the FTC’s Bureau of Consumer Protection. “Companies should tell people what information is collected, how it is collected, and who it’s shared with.”

Along with the 2016 revelations about how Facebook’s third-party login system was giving away your data willy-nilly to app developers, the Silverpush controversy pushed many people that year to realize that their online data was vulnerable in ways previously unimagined. Where Edward Snowden’s revelations of state surveillance had shocked many, the Facebook and Silverpush scandals brought the issue of online privacy into an entirely new and personal focus and made folks realize that the problem was right there in their hands, on their phones, and inside the apps they had trusted.

Total wipeout

The impact on Chawla’s business was immense. The startup lost every single one of its global clients.

That happened in early 2016, as the CEO decided to abandon the company’s audio beacon tech in an effort to move past the controversy. With no product to offer, clients bailed on Silverpush.

Chawla then decided to build a new service, while remaining in the marketing tech sector that he knew to be lucrative.

Throughout the controversy, the firm only lost two team members out of a 25-man team: a sales person who was no longer needed and a co-founder who preferred to sell off the tech know-how rather than rebuild.

Struggling with PR

Investors spooked

Shift to streaming