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Preclusio co-founders John and Heather Wade. (Preclusio Photo)

The scary truth about many technology companies is that for years they’ve been vacuuming up vast quantities of personal data without even knowing what they’ve collected, how it’s being stored and used, and what sort of safeguards protect it from hackers.

But that’s changing. In January the California Consumer Privacy Act goes into effect, and Europe’s General Data Protection Regulation (GDPR) was enacted in May 2018. Both require companies to meet privacy requirements to limit data collection, shield the information that is gathered and, to varying degrees, allow the public to request and even delete their personal records.

“We’re entering a new era where we’re holding the tech industry to a higher standard,” said Heather Wade.

Wade is CEO and co-founder of Preclusio, a startup that helps companies comply with data privacy regulations. Wade launched the company in March with her husband, John. Preclusio graduated from Y Combinator, a leading Silicon Valley accelerator, earlier this month.

Previously, Heather led engineering teams at Tune and Whitepages, both in Seattle, where she tackled GDPR readiness initiatives. The roles gave her the chance to research and experience firsthand the tools commercially available to protect data. She wasn’t impressed.

“The solutions in the market were very painful,” Heather said. Tune wound up building its own software to do the job, and Whitepages opted for a hybrid of off-the-shelf and in-house technology. With passage of the California rules, Heather felt the time was right to launch.

Preclusio’s competitive advantage, she said, is its automated tools for determining a company’s data inventory and mapping that information. Their approach can cut six months out of the compliance process, she said.

Heather Wade, CEO and co-founder of Preclusio. (Preclusio Photo)

Other companies providing privacy compliance tools include Atlanta’s OneTrust, a company that in July announced a $200 million Series A round; BigID, a New York-based company that has raised $96 million over five rounds; and Seattle’s Integris, which has raised $13 million.

Preclusio has finished the first version of its product and is running pilots. They’ve initially focused on Amazon’s AWS users, and are building support for customers of Microsoft Azure and Google Cloud. Their price varies according to the size and complexity of a business’s data infrastructure, starting at $25,000 for a year-long service for a startup.

Preclusio plans to have its engineering team based in Seattle, where the Wades have the most connections in the sector, and will operate sales out of the Bay Area.

And how does the duo retain marital harmony while grinding through the early days of a startup?

The two had a small side business years back, so they had some idea of what they were getting into. That said, it’s still a little tricky.

“It’s really difficult to untangle work from your personal lives, and we’ve made some concerted efforts to draw some boundaries,” Heather said. They intentionally set aside time where talking about work is taboo. It takes practice and discipline, but the couple said they’re finding that balance.

“It’s a new muscle we’re having to learn and flex,” John said.

We caught up with Heather and John for this Startup Spotlight, a regular GeekWire feature. Continue reading for her answers to our questionnaire.

What does your company do? Preclusio helps companies comply with privacy regulations like GDPR and the California Consumer Privacy Act. We do this through automated data inventory and mapping tools that help companies find personal data across their organization, and continuously monitor this data to make sure it is stored and protected in a legally compliant way.

Inspiration hit us when: When I was leading engineering teams at Tune and Whitepages, I found that vendor solutions either didn’t quite deliver what they promised or weren’t ready for prime time, so we had to tackle these projects using a mix of internal and off-the-shelf tools. When California last year passed the first comprehensive U.S. privacy law, we knew it was time to bring a better solution to market.

Preclusio dashboard. (Preclusio Image)

VC, Angel or Bootstrap: We decided to go with a mix of VC and Angel funds, prioritizing investors with strategic alignment to our mission.

Our ‘secret sauce’ is: Our team. We have the perfect mix of privacy domain knowledge and practical application in privacy engineering, which has allowed us to approach this problem in a novel way. Rather than building a naive evolution of manual processes and workflows, we are innovating in ways that leverage machine learning and automation to shave time and money from a company’s compliance efforts.

The smartest move we’ve made so far: Applying to Y Combinator (YC). The additional attention alone was worth getting in, but when you add the resources and expertise they make available to you, it was such a huge value add. Not to mention having a whole group of other smart, motivated founders to help you talk through problems is so wonderful that it’s tough to imagine where we would be without it.

The biggest mistake we’ve made so far: Not growing our team earlier. YC generally advises companies to defer hiring until after the program to make sure you don’t build the wrong thing. However, we spent a lot of time on customer development before the batch, and our product isn’t exactly something you can “Wizard of Oz” while you get the technology built. You live and you learn. (Editor’s note: “Wizard of Oz” is a tech sleight-of-hand where a company is doing back-end engineering manually, while from the customer side, the processes appear to be automated.)

Our favorite team-building activity is: Board games! We like to focus on activities that are accessible and give an opportunity for folks to see other sides of their co-workers that they may not otherwise be exposed to during a typical workday.

The biggest thing we look for when hiring is: Values alignment. Our mission is to enable companies to be good corporate citizens and protect personal data, and it’s often challenging for startups to achieve rapid growth while prioritizing ethics. It’s essential that every member of our team considers the broader implications of our products for both our customers and society, and wants to actively make Preclusio a force for good.

What’s the one piece of advice you’d give to other entrepreneurs just starting out: Find a good support network, whether that is a group of other founders you know or getting involved with a reputable accelerator like YC. As an entrepreneur, the rules continue to change as your company grows to the next level, and your previous roles may not have prepared you for these challenges. Build relationships with founders who have been where you are going, and use them as a resource and sounding board when you need it.

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