A tech company you can actually like!

tech companies these days are not exactly belov it a federal judge has just ruled against Google the doj is suing app to maximize their own Revenue they might have to put more ads on their websites you're on National Television would you like now to apologize to the victims of course some of them are fairly ethical but then those often end up being Niche players who struggle to build large sustainable businesses that really move the needle for the masses what if I told you that there was a tech company that was not only doing more or

less everything right but was also starting to become big enough to actually matter let's talk about [Music] proton by the way this video was not sponsored by proton they did not ask me to make it I did not join their affiliate program so that we don't have any conflicts of interest and if anything I've actually been sponsored by some of their competitors in the past instead this video is actually sponsored by brilliant more about them at the end when in 2013 Edward Snowden revealed just how much governments were spying on people demand for more encrypted

internet services suddenly exploded and email became an obvious candidate in need of Reform developed in the 70s and ' 80s email was notoriously insecure and had no real privacy built in by default encryption techniques such as pgp had been invented but were far from Universal since email is just a million different mail servers operated by a million different companies that have agreed to exchange messages any comprehensive change would require each one of those to agree to a new standard and to implement it correctly not only does that make encryption for example technically challenging it's also

unlikely to happen given that the world's largest email provider is you know also the world's largest advertising company maybe that's not a coincidence as proton co-founder NN said the government wants to read it Google wants to read it Microsoft wants to read it your it admin wants to read it so in this environment there was a pretty obvious Market Gap that a new player could exploit just one year after the Snowden Revelations protom mail was found founded by a bunch of scientists from CERN you know the place in Switzerland where they make very small particles

go room room in a very big circle and the idea was to make an email service that offered real endtoend encryption using pgp while also being just as easy to use as Gmail or hot mail pgp or pretty good privacy was invented in 1991 but setting it up requires users to manually exchange and set up long strings of characters called keys with each contact which means that it never became truly widely adopted proton male just turned pgp on automatically by default between all proton mail users meaning that proton itself couldn't actually read that amazing secret

recipe that your grandma emailed you as long as you both used proton mail now with that you might have already noticed a pretty obvious limitation of this service when two people talk both of them need to keep a secret in order for that secret to remain a secret but if the other party used any other email provider proton couldn't actually enforce privacy proton of course open sourced their clients so you could be sure that they didn't read your emails but for example Google's official policy until 2017 was to just read every email in a person's

Gmail inbox in order to Target ads at their users there's not much proton can do there overall then proton mail was a more trustworthy email solution that what came before it but obviously far from a perfect solution so why do I think this company is worth talking about anyway well to start with as imperfect as email inherently is it is still necessary as the first step towards a larger ecosystem email provides identity and you can build a bunch of other services around it which is exactly what happened next even back in 2016 founder Andy Yen

said that quote right now we're focusing on email but you have the entire space of different applications that can go to the endtoend encrypted model and so in 2017 they launched the now very popular proton VPN and soon after they launched proton calendar and Proton Drive to complete the big productivity Trio then they acquired simple login which is an email aliasing tool and they rolled that into their next big product proton pass a great password manager that could now also create email aliases on the Fly just a few months ago they then bought standard notes

a Notes app that they're integrating into their portfolio as we speak and they also launched proton docs which as You' expect is a document editor much like Google Docs and meanwhile their latest launch is proton wallet which is an app that helps you keep Bitcoin physically on your device instead of on some online exchange having a central service like email at the core was a key enabler for this ecosystem buildup and while email itself might be inherently imperfect the whole rest of the ecosystem proton has basically complete control over and so they can build those

to be as private as possible everything from your passwords and proton pass to your keystrokes and proton docks to your photos being uploaded to Proton Drive everything is encrypted and basically all of these apps are also open source being able to offer not just a single app for a narrow use case but basically a whole productivity ecosystem that could theoretically replace something like the Google apps for a person is a big deal it's also the first major differentiator between proton and the other kind of ethical tech companies now personally I'm still missing some things from

the proton ecosystem like a spreadsheets and presentation app on top of docks standard notes is just way too basic for my use case Proton Drive doesn't handle large files super smoothly Etc but looking at their timeline you can clearly see them accelerating the new releases aggressively lately and the same goes for new features too just in the last few months we got real-time collaborative editing in docs automatic photo backups for Proton Drive and even an AI editor called scribe which can run entirely locally on your machine and won't actually use your data for training either

pretty slick well and perhaps most importantly apart from minor annoyances all of these apps actually work just as well and are just as easy to figure out as their less private competitors if the goal is to make not just apps that are private but also apps that can theoretically be used by hundreds of millions of people around the world then I think it is completely non-negotiable to have really good ease of use and also a full ecosystem that the people are used to and I think proton is way further ahead with this than any of

its competitors and this shows in the numbers too while proton does not publish exact figures they do claim that over a 100 million people have signed up across the various proton Services while 50,000 people have joined proton 2 now to be fair it's a little bit hard to say how many of those people and businesses are still using proton today on similar web I can see that the proton me domain gets a 40 to 50 million visits a month while protonvpn dcom for example gets 4 to 5 million the company has many more domains and

clearly many people will also be using the mobile apps instead of the websites so user numbers are imprecise but the point is that users have to be in the tens of millions and this is not some insignificant tiny player we also know that in 2021 they claimed to have had 50 million signups so they must have at least doubled those in 3 years and looking at their career page they're hiring pretty aggressively too which also implies very solid growth I think achieving anything like real scale is proton's second big achievement and it's really important for

two big reasons first only having scale allows them to invest into actually building an ecosystem of apps that can properly compete with the big players and second scale is tremendously important for Network effects proton male as we've said is only private if the people around you are also using proton mail while proton docks for example will become truly powerful when we can expect to send a link to them to random people and expect them to edit it just like we can with Google Docs or Microsoft Word proton is still in the beginnings of this but

they seem to be accelerating and they're already way further than any of their competitors and meanwhile their third differentiator is their business model the company got started in 2014 with a crowdfunding campaign where they claimed that 10,000 people donated over half a million dollars to launch development and right after that they switched to Simply making users pay a subscription fee at least for premium features seems like a pretty obvious business model but it's one that very few of their privacy focused competitors have managed to pull off at scale Mozilla is an obvious open- Source privacy

Champion with hundreds of millions of users who has even launched a few paid attempts but looking at their latest statement 86% of their revenues last year still came from Google simply paying them to be the default search engine in Firefox Google is not only milla's biggest competitor with chrome but they also just lost a massive Anti-Trust lawsuit in the United States which might force them to stop paying for default search engine placement in for example competing browsers like Mozilla that decision hasn't been made yet but either way this is a Dangerously unsustainable business model and

similarly signal is a free app and is funded almost completely by donations from regular users including me and while they have been able to collect a significant amount it doesn't actually seem to be quite enough to offset their costs and the president of signal even claims that their expenses might reach about $50 million next year the Gap in funding for now is plugged by zero interest rate loans from Rich philanthropists like the WhatsApp founder Brian Acton which I guess is nice but it again raises the question of sustainability what if the philanthropists decide that they

don't want to fund it any further what if the service grows can fold and suddenly have massive costs who knows compared to these proton having a simple sustainable business model that works and has worked for a decade is pretty unique especially in the open source world where things are often expected to be free it allows proton to comfortably remain independent long term proton is a private company that doesn't have to reveal its finances but based on the fact that they haven't taken any massive Investments externally this means that by definition there's a state able financially

and my rough estimate based on you know this is just a guess based on their numbers is that they probably make something like1 to $200 million a year that's obviously not even remotely on the scale of like a Google for example but it's also not bad and also if we're right about the fact that they doubled their business in the last 3 years sounds pretty good now after my three major highlights I also wanted to mention two areas where I think proton is not quite perfect then the first one is its ownership structure see companies

like Mozilla and Signal are Own 100% by a nonprofit Foundation as a parent this ensures full adherence to the mission long term and recently proton have put out a block post announcing that they to have established a proton foundation with a similar goal so that's a good thing but since I'm nitpicking here I think the details of the proton deal are not quite as clear as they should be they do say that the foundation was gifted enough shares by three of its co-founders and early employees to become quote the largest voting shareholder of proton now

I understand not going to 100% for example as it allows for for key employees to be given shares and to be incentivized that way but they didn't actually see how much the foundation has the largest shareholder could have anything 10% 50% 90% we just don't know I've checked the Swiss company registry which is where proton is headquartered but I couldn't find any information about the ownership split there either they explicitly claimed that the foundation is legally obligated to ensuring permanent adherence to the mission of proton but without the ownership Stakes we don't actually know what

powers it has to to do this the only explicit power that they mentioned is that they can block hostile takeovers so I guess it has a veto right but no other mechanisms were given I did actually ask proton for a comment and they gave me this as a response which you can pause and read if you like anyway I don't think this is a Smoking Gun like a private company does not have to declare its exact shareholder structure to Outsiders but I do think that for a company that really wants its users to trust it

and they want as far as to create a foundation for that to create user trust I think even more transparency would be useful and meanwhile the second complaint which hardcore privacy enthusiasts sometimes bring up is that proton officially complies with legal warrants from Swiss authorities this has led to some unfortunate cases in the past like a French activist being exposed by proton handing over their IP addresses to the authorities for example proton claims that they had to comply by law as any Swiss company would have and that the only things that they could share was

metadata not the actual contents of emails for example which of course were encrypted I do think there's a debate to be had about how much comp should comply with legal requests but honestly I'll leave that debate to people who know more about the law than I do the only thing that I can say is that for my threat model this feels okay in the grand scheme of things I think the solid privacy features combined with the easy to ouse apps the powerful ecosystem and the sustainable business model do add up to a combination that I

think make proton a uniquely impressive company now whether it's at proton or some other tech company I think being one of the people who gets to build systems like this is a really cool job and if you want to learn how to be one of those people yourself then check out brilliant brilliant is an online learning platform built specifically to teach people stem skills this includes not just computer science topics but also those around maths physics engineering and more so you can get a complete picture and to learn to think like an engineer or a

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also just significantly more fun than passively consuming information so you're more likely to stick with it to try everything that brilliant has to offer for free for a full 30 days visit brilliant.org Tech alar or click on the link in the description you'll also get 20% off your annual premium subscription if you choose to to get one so happy learning and I'll see you next Friday [Music]