Neon is an app that offers to pay users for something they typically give away for free: valuable personal data. Just eight days after its September launch, the Neon app climbed to second place among the App Store’s most popular free apps.
The data that Neon wants comes in the form of phone calls that consenting parties agree to record and sell to AI companies for training purposes. And if you think that sounds risky in terms of personal privacy, you’d be right: Only weeks after its launch, a TechCrunch investigation found that Neon servers could be manipulated to share access to much more than users were probably bargaining for—their metadata, including phone numbers, and even transcripts and audio files of their calls. Troublingly, some of the transcripts TechCrunch reviewed seemed to be covert recordings of in-person conversations.
Six months after its debut, however, Neon is back with $25 million in its pocket and promises to do things better this time. And founder and CEO Alex Kiam isn’t shying away from the early scandal that threatened to derail his business. In fact, it’s one of the first things he mentions on a call with Inc.
“We had not done [penetration] testing, and TechCrunch was able to get into the database, and so we immediately shut it off. We basically went back to the drawing board,” Kiam says.
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Kiam says the company brought in third-party experts including Unit 42, a Palo Alto Networks-owned team of researchers and cybersecurity security experts, as well as Ian Reid, the former chief technology officer of Stamped. Reid ultimately joined Neon as CTO. Together with the experts, Neon conducted a line-by-line code review before relaunching the app in early November. Neon quickly climbed back up to the third most popular app in Apple’s App Store, Kiam says.
“I think the reason people came back is because they had a great experience with the app. Because we had been transparent with them during, I think they were able to give us a second chance. And we’re really grateful for that,” he says.
In spite of the undeniable virality of the app, experts worry about the effects of pay for data in an increasingly divided world.
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