May 22, 2026 – The Alloy Market Brandon Aversano and Legal Rights Cindy Cohn

Intro 1 0:04
Broadcasting from AM and FM stations around the country.

Jim Beach 0:07
Hey, School for Startups Radio here. I’m stopping the introduction because we have so much show, we need to go ahead and get started. First up today we have Brandon Aversano. He has built an incredible gold business, recycling gold. It is a cool story. You will enjoy it very much. And then, after that, Cindy Cohn is with us to talk about legal rights and privacy, free speech, Signal, the app, a whole lot of stuff that’s going to be interesting to you. Let’s go ahead and get started right now. Here we go. Boy, I have an exciting story to share with you. This is just a brilliant idea. Please welcome Brandon Aversano to the show. The show, he is the founder of Alloy Market, which is a Pennsylvania-based fintech startup. He got sick, unfortunately, and needed to raise some extra money, tried to go into the marketplace and sell some jewelry and stuff. I’ll let him tell what happened, but that eventually led to this business, and we’ll let him tell us some of the stories. Branded, welcome. How are you doing?

Brandon Aversano 1:06
Hey, thank you so much for having me on. Doing great.

Jim Beach 1:09
All right, so I’m sorry that you got sick. Tell us the story.

Brandon Aversano 1:13
Yeah, absolutely. Yeah, so in 2022 I was working for JP Morgan Chase, living in Center City, Philadelphia. I was unfortunately diagnosed with testicular cancer at the age of 30, and immediately had to go on disability. I went to University of Pennsylvania Hospital for my treatment, and as you can imagine, the medical bills just started to pile up, so I actually sought to sell some of the gold jewelry that I had inherited from my grandmother, who had passed the year prior. There’s an area in Center City Philadelphia called Jewelers Row, and it’s a collection of essentially pawn shops and jewelry stores. So I took the jewelry there, and it was just a horrific experience. I was offered 20 cents on the dollar. They engaged in all the kind of stereotypical tactics you can imagine, intimidating, bullying, trying to get me to separate from my jewelry. Needless to say, I did not sell to them. I went back to my apartment and thought to myself, there has to be an online version of this, because there’s an online version of everything, and unfortunately, to my dismay, found that the online versions to sell gold, gold jewelry were digital equivalents of their brick and mortar counterparts, so they were super opaque domain names, you couldn’t figure out who was behind them. They refused to provide upfront estimates, and so for me it was a lightning bolt moment that if I’m trying to generate some liquidity with non-cash assets in my most vulnerable moment, I imagine that there are many 1000s of others who are experiencing something similar, and so over the last three years we have been building the alloy market, which is one of the largest now direct to consumer purchases, purchasers of gold jewelry in the United States, and so we purchase gold jewelry from clients in all 50 states and US territories. We offer exceptional client service and honest and fair payouts.

Jim Beach 3:25
I love it. I love it. What a great improvement, and what a great way of helping people. So fantastic. Obviously, you’re okay now. Are you? You’re doing okay?

Brandon Aversano 3:38
I appreciate you asking. I, I still, unfortunately, have to go to University of Pennsylvania Hospital every few months for scans and tests, but I am currently in remission and believe I will stay that way. Thank you for asking.

Jim Beach 3:49
Excellent, excellent. Well, especially with your testicles, you got to take care of those buddies.

Brandon Aversano 3:54
There you go, you know.

Jim Beach 3:56
All right, so I love the inspiration. What did you do when you decided three years ago to start this? So, tell us the steps you know. What did you do first? Tell us the story.

Brandon Aversano 4:07
Yeah, well, essentially I knew nothing about this industry. I knew nothing about precious metals or how they traded or how they were priced, and so I immersed myself in a ton of research to start to understand the mechanics of this industry, and I actually reached cold, reached out to some precious metal refineries in the United States, and explained who I was and what I was hoping to do, and there were some really awesome folks out there who were willing to share information just about how things worked and what the supply chain looked like, and so, yeah, I just did a ton of research, immersed myself in, you know, in the industry to learn as much as I possibly could before actually building the product. I wanted to know, you know, what was going on out there.

Jim Beach 4:58
All right, How does that market. Work. Give us a brief rundown on the marketplace itself.

Brandon Aversano 5:03
Yeah, so you’re talking about like the entire precious metal market,

Jim Beach 5:08
or yeah,

Brandon Aversano 5:10
yeah, absolutely. So precious metals are traded globally, internationally. If you were to Google, you know, what is the price of gold today, typically you will see a price that comes out of the London commodities market, and it’s called the London Fix. So, today I think the price of gold is $4,552 per ounce, and so that is a essentially universally accepted spot price for an ounce of gold on that day. If you’re selling gold, gold jewelry to, you know, a reputable buyer, you can expect to get around anywhere between 70 to 85% ish, of the value of the gold. If you’re selling solid gold, like gold bullion, like think of the stereotypical bars of gold, you can expect to get, you know, well above 90% so you know those types of solid gold bars are purchased by central banks like the United States and China, institutional investors and super ultra high net worth individuals who like to diversify their assets,

Jim Beach 6:18
but you can’t get 100% if you walk in there with pure gold in a gold bar, you only get 90% market value. Then

Brandon Aversano 6:26
you’ll get above 90% but essentially the buyer of the gold has to take a small spread because they’re accepting the responsibility for the volatility in the market. So if they buy your gold at 100% of its value and the next day it drops by 5% then they’re underwater, so that’s kind of why

Jim Beach 6:43
it’s still a commodity that I don’t.. that’s.. I would have a problem with that part. That’s just not.. it’s that’s the way any commodity works, though. You pay 100% of the cost, and then you.. it could go up or down. You might.. it could go up tomorrow, and you could double your money. I mean, I don’t.. anyway, that’s my. my beef. I don’t like that. That’s not fair.

Brandon Aversano 7:04
Well, I, you know, I wish we could pay 100% but it’s, it’s just not the way the market tends to work.

Brandon Aversano 7:11
Okay. Very interesting. So, you learned that’s excellent. You did your market research, then what did you do?

Brandon Aversano 7:22
I immediately, so I thought to myself, you know, I can, I can build the product, I can think through all of the operations, I can kind of get this thing up and running, but I am very ill equipped when it comes to marketing, and so I posted on, I think, a website called Founders Match, a essentially a co-founder role. I was looking for a head of marketing to help get the word out about this product and what we were trying to do, and so really, after I learned as much as I could about the industry and started building out, you know, the operational flows, and how I thought everything would work. I hired a marketer, a digital marketer, who is still with us today as our head of marketing, an amazing guy, just absolutely brilliant. And you know, he’s been helping us tell the spread the good word of Alloy since 2023

Jim Beach 8:18
All right, so excellent job of going and finding a marketing guy. What kind of deal did you make with him? You obviously don’t need to tell us anything that’s private, but yeah, on as an equity member and give slave labor and stuff.

Brandon Aversano 8:33
Great question. Essentially, I took a really big risk and liquidated my entire 401 k and all of my savings to put into the business, and so when he joined, he started with a modest salary that was funded by my, my savings, and then also came on as an equity partner, so he holds, you know, a nice, a nice stake in the company.

Jim Beach 8:59
Okay. All right, then what? You haven’t even programmed yet, built a website yet.

Brandon Aversano 9:07
Yeah, absolutely. So, as soon as my head of marketing came on, we very quickly partnered with somebody he’d actually partnered with in the past to build the website, The Alloy market.com and we essentially, we just launched. I mean, I was customer service, and the operator on the back end, he did everything he could from a demand generation perspective, but we started to get clients reaching out to us through our web form on our website, and started to kind of just learn, refine, and iterate over time. One thing that we learned really early on is that folks don’t, you know, when they go on the website and they, they want to sell to you, they need to get something in the mail in order to feel comfortable, and so we actually designed a physical what we call an hour. Evaluation kit to mail out to clients who are interested in selling to us, because that that kind of touch point builds trust between us and the client, and so we work really hard on designing a beautiful product there, and then you know it just kind of snowballed from there, you know, we serve clients in all 50 states and US territories folks go on our website, request an alloy evaluation kit. They receive it in about five business days. Inside of there, there’s some information about how the process works, total transparency around pricing and how we evaluate the items. It also includes a prepaid, pre-labeled FedEx two day return mailer, so folks input their jewelry there, drop it off at any FedEx or Walgreens location. It arrives back at our headquarters in Pennsylvania. We use what’s called an X-ray fluorescence machine. It’s quite literally an X-ray machine that beams an X-ray into the gold or silver or other precious metal, and tells us exactly how much of that precious metal is in there, so it tells us the chemical composition, and then we weigh the item, and then based on the price of that gold or silver or platinum that day, the weight and how much precious metal is actually there, we send our clients a cash offer via email, should they accept before 5pm Eastern time that day, they’re paid out the very same day via PayPal, ACH direct deposit, or paper check by mail. So it’s a pretty simple process, you know. End to end takes seven days, it can take as little as seven days. So yeah, that’s kind of what we did, we built and iterated and learned,

Jim Beach 11:45
all right. How long after you had the site up did you get your first customer?

Brandon Aversano 11:50
That’s a great question. It took a while. I would say our first sale after our site went up was probably three months, and one of the existential, oh my goodness, you know, this is not going to work moments that I had was, you know, two and a half months in, we weren’t receiving any gold, and so we developed this kind of north star, which we called GID, and it stands for Gold in the door, and all of the decisions we decided that all of the decisions we were going to make for the business, whether it be marketing or product or anything, was all about getting gold in the door, and so we use that as a framework. We actually would score our initiatives, or you know, the work that we wanted to do against that on a scale of one to 1010, being like, yes, this is going to drive gold in the door, one being like, this is a good idea, but it’s low priority and not going to drive any gold in the door, and as we introduced that concept and really started to focus on driving gold in the door, that’s when we started to get our first clients and customers.

Jim Beach 13:01
All right, what about jewelry? You said you take jewelry, right? Does that melt it down or is it actually kept as jewelry?

Brandon Aversano 13:07
Yeah, it’s a great question. Most of the jewelry is melted down, but we actually recently just launched, and we’re very excited about a resale marketplace. It’s Shop dot the Alloy market.com and that that marketplace it features jewelry that we purchase from individual sellers across the country, and I think the most exciting part of the marketplace is that we actually remit 25% of the net profit from the sale back to the original seller of the item, which is really unique in sort of the resale market. I mean, when you

Jim Beach 13:46
say that

Brandon Aversano 13:47
again,

Brandon Aversano 13:47
we remit 25% of the profit from the sale back to the original seller of the item.

Brandon Aversano 13:54
Okay,

Brandon Aversano 13:56
you know, so yeah, if you think about it, like when you sell your car to CarMax or Carvana, which great companies, you know, no judgment, no shade, you get paid once and then they go and make as much money as they possibly can on the other end, and you don’t share in that upside, and we kind of wanted to flip that model on its head, where it’s like, hey, if we can actually go sell this for more than its melt value, we want you to share in the upside, so actually today we just sent six original sellers 25% of their sales, which was really exciting. Today’s the first day that we did that. We just launched it on April 20.

Jim Beach 14:36
Wow, that’s impressive. So with jewelry, how do you appraise that, you know, if it has diamonds or stones in it, and things like that?

Brandon Aversano 14:49
Yeah, it’s a great question. We’re really upfront with clients, and we try to get in touch with them before they send anything in. We don’t pay out for stones or gem stones. The secondhand market for stones is. Really, really tricky, and one that we don’t, you know, we don’t want to be involved in, and so we highly encourage our clients to remove any stones that they’d like to keep prior to sending in their jewelry, because our offers are purely based on the amount of precious metal we receive, and so, you know, if we receive, we’ll receive, you know, diamond ring that no longer have the diamond in them, you know, they just have like empty prongs or bracelets that all the sapphires and emeralds used to be in that are empty, and so you know that’s kind of what we do, we just encourage our clients to remove any stones that they wish to keep. We don’t provide a stone removal and return service just because a lot of stones come in broken and they’re really difficult to pop out of the settings ourselves. We’re not jewelers, so yeah, we just try to be as transparent and upfront as possible that your offer is based on the value of the metal, not any of the stones, and we encourage you to keep them if you want them.

Jim Beach 16:03
Okay, makes a lot of sense.

Brandon Aversano 16:05
Yeah,

Jim Beach 16:06
so how many deals are you doing a week or a month now?

Brandon Aversano 16:11
Yeah, so we’re doing about 1000 deals a month, so like 250 deals a week, which is pretty, pretty crazy. Yeah, and when I say from all 50 states and US territories, I mean it. We’re based in Pennsylvania, but today we’ve received packages from Alaska, Hawaii, you know, North Dakota, California, Texas, Florida, all over the place. So we’re, we really do kind of cover the country geographically.

Jim Beach 16:40
That is very, very cool.

Brandon Aversano 16:42
Yeah,

Jim Beach 16:43
and what kind of marketing are you doing now to get those numbers? So, what is your founder, new friend, come up with?

Brandon Aversano 16:52
Yeah, so in the beginning, you know, it was very heavily – we relied very heavily on paid marketing, particularly Google pay per click, which is very expensive, but over time we he’s done an excellent job on the SEO, the search engine optimization side of things. So we appear quite high in search results around selling gold online, and we also put out a lot of useful content for consumers around educating people around how selling gold and the gold market works. We publish calculators, so you know if you go, if you type in like 14 karat gold calculator, you can actually input some information on one of the calculators we have online, and it’ll tell you what the value of that is, and so we, we generate our leads in the combination of paid marketing and then organic content. We are not yet on, or I should say, we’re on, but we’re not yet heavily focused on social media at all. So we think that’s sort of the next frontier for

Jim Beach 18:00
us. Oh yeah, you need to start doing that, and how do you communicate your value proposition to people just like you, Brandon? So, how do you let people know that you’re different from all of the others that you discovered that were so slimy and scuzzy and stuff? How do you make the distinction?

Brandon Aversano 18:20
Yeah, I mean, I think it comes down to transparency and trust building. I mean, we’re very, very public. You can find out exactly who, you know, we have an about us page where you can see who we are and what we stand for. You know, we publicly publish our values. We also do something that’s very unique, and that is we offer upfront estimates, so most of the online buyers, if not all of them, will require you to send in the item in order for them to make you, and you know, an estimate, and so they actually have possession of your item before you even have a sense of what you could get paid. We do the exact opposite. We really want to give clients the sort of baseline estimate for what they can expect before they send anything in, so they feel incredibly comfortable, and you know, fully armed with all the education possible before they part with their precious metal, because it’s, you know, it’s a sensitive transaction, and we take it very seriously. We’re a BBB accredited business, we solicit from our clients, all of our clients, Trust Pilot and Google reviews, which we feature on the website. So it’s really just a combination of trust signals being really transparent, and then offering estimates, which is unique in this space.

Jim Beach 19:39
Yes, and also having your real name and picture up there make a difference too. It’s amazing how many websites don’t have the owner’s picture and name up there, right? Stuff right, even consulting practices don’t put the pictures of the principals up there. I’m like, what the hell?

Brandon Aversano 19:54
Yeah, you know, it was one of the things that struck me the most when I was you. Kind of coming up with the idea was that there you could not figure out who was behind these companies, and that just gave me, like, such that you know, an ick feeling, like, what I’m just gonna send this to a faceless company, but you can’t figure out who owns it or who’s behind it, and so, yeah, I mean, if you go to our about us page, you’ll, you’ll see my face with my bio, and our head of marketing space, and his bio, and you know, the rest of the team. So we’re, we’re proud of what we do, and we’re proud to stand behind

Brandon Aversano 20:28
it,

Jim Beach 20:28
as you should be, Brandon. You’ve done an excellent job, and you bootstrapped the whole thing, right? You did just with your 401 k, did it require more money than that?

Brandon Aversano 20:37
It did. Yeah, so I’m.. that’s how we got started, and it probably took us about a year in, but as we started to purchase gold, gold costs a lot of money, and so we needed both working capital to actually purchase gold from folks, and then growth capital, you know, to hire more employees, and so we did raise a couple of financing rounds.

Jim Beach 21:03
Tell me about that.

Brandon Aversano 21:05
Yeah, so our first raise was we partnered with an angel investor syndicate, so you know a whole bunch of individual angel investors, you know, wrote a single check into the company, which was amazing and really helped us. It was about a half a million dollars. Then after that, we raised our first priced round, and that was we raised from Hustle Fund, which we’re really proud of. The state of Pennsylvania actually, through their Ben Franklin Technology Partners program, invested, and then also a venture capital firm based out of Chicago called 11 Tribes, and they are just exceptional people. So that was our first priced round, and then as we kind of continued to scale, we raised another priced round, and all of those investors wrote follow-on checks into the second round with one additional investor, Yonder VC, run by a gentleman named Colin Gardner, and I highly recommend checking out his LinkedIn profile. He is a startup wizard.

Jim Beach 22:13
All right, and have they been helpful? Have the investors helped you, or are they calling you every day and annoying you?

Brandon Aversano 22:20
I, you know, I’m grateful that you asked that question. I think it is. I have heard horror stories from peers and other founders who have right invited institutional investors in onto their cap table, and you know, into their company, and I feel like I absolutely hit the jackpot. I won the lottery when it, when it comes to investors, I, I look at our investors and our board as a brain trust, not a bomb threat. That’s what I always say. And they’re just really like an exceptional, incredible group of people who are generous with their time, their networks. They, they just, they go out of their way to help build their portfolio companies, and I just think that is really, really a testament to who they are as people.

Jim Beach 23:06
Yes, yes, usually hear the exact opposite. And I love the fact that you went to the state as well, the Ben Franklin Fund. I had never heard of that, but Georgia has something very similar, Atlanta has something very similar. So all you listeners out there, you need to go to your state and your local governments and see if there’s money available for startups. There’s a lot of money out there from these governments, and how hard was it to get, Brandon?

Brandon Aversano 23:33
The, I mean, it’s always a fairly intense due diligence process, because it’s taxpayer money that you know the state does a little bit more of a deeper due diligence process, which is totally fair, but it was, you know, it wasn’t crazy arduous. We worked closely with them, we, you know, opened the hood, let them see what we were doing, let them inside, and yeah, it took probably from the time that we applied for the funding to the time that we received the funding, I would say, like less than a little bit less than 12 weeks, you know, probably 10 eight to 10 weeks from the time that we applied, but what’s really cool about the state funding, and I imagine that this is the case in several other states and you know cities that offer this kind of thing is that it unlocks future capital as well, so typically they will write an initial check, but as you grow and as you raise more money, or if you need more money, you can go back to those investors in, you know, those organizations, show your traction, show where you’re at, and they’ll write follow-on checks, so it’s, it’s, it’s a great continued source of capital, should you need

Jim Beach 24:48
it. Fantastic, Brandon. Well done, my friend. A plus, a plus, you have done it all 100% right. This is Joel. Way to hear your story, because you’ve done it so well. It’s such a great idea. It’s so cool to see you succeed because of your illness. It’s a real ballsy story, Brandon.

Brandon Aversano 25:11
There you go. Yes, I do. Hey, you know, in some of the darkest times come, you know, the brightest moments. So, I wouldn’t, I wouldn’t trade my, my cancer for the world. To be honest, I feel very humble and grateful to be in the position that I’m in today. As a result,

Jim Beach 25:27
great attitude, you deserve it all. How do we find out more and get in touch and sell my mother’s gold?

Brandon Aversano 25:33
Yes, absolutely. So we are the Alloy market.com Um, that’s where you go to request your free evaluation kit, and tell us your goals. And then, if you’re looking to buy some really cool vintage or estate pieces, you go to shop dot the alloy market.com So, those two websites

Jim Beach 25:52
are fantastic. Brandon, thank you so much. And we’d love to have you back in the future to get an update. You were great, thanks a lot.

Brandon Aversano 25:58
Awesome, thank you so much for having me. I appreciate it and we will be right back.

Jim Beach 26:01
We are back, and again, thank you so very much for being with us. You know, the internet and all of the beautiful tools that it has brought us, has also brought a lot of moral and legal questions to the forefront, a lot of things that we have to deal with, privacy, and all of these issues, and I’m very excited to welcome someone who’s going to help us understand what we should be doing, what we should be striving for, and also she’s going to give us a little bit of history. Please welcome Cindy Cohn to the show. She is author of a new book called Privacy Defender, my 30 year fight against digital surveillance. She has had an entire career devoted to helping keep us safe online. She is the director of the Electronic Frontier Foundation, which she ran from 2000 to 2015 and now that organization is up to 120 lawyers, activists, and technologists who are dedicated to ensuring that technology supports speech privacy and innovation. Cindy, my goodness, you have a big job. Welcome to the show. Oh,

Cindy Cohn 27:21
thank you so much.

Jim Beach 27:23
So, how did you get started in this fight?

Cindy Cohn 27:28
Well, kind of by accident, you know. I was a young lawyer, and in San Francisco, and I kind of, by accident, met some of the folks who founded the Electronic Frontier Foundation, but who were also kind of online in 19 9019 in a timeframe before the world wide web, so before most of us were really online, these guys were online and they kind of showed me a glimpse of the future and I was very excited about it, but also realized that we were, we were in for some fights around civil liberties and human rights, as this technology became something that moved from, you know, the scientists and academics and government people who were using it to all of the rest of

Jim Beach 28:14
us, right, and but at that time there weren’t issues going on where you’re already fighting certain causes.

Cindy Cohn 28:24
Well, I was a human rights lawyer. I’d spent some time at the United Nations Center for Human Rights, and I just moved back to San Francisco to start a kind of regular, a regular commercial career, and I was working for a law firm here in the Bay, and these guys, they showed up at a party in my house, but I thought they were interesting, and we got to be friends, and they were already looking ahead and starting to identify some of the issues that were going to become really important as the, as the whole world got connected with this network, and of course some of those were privacy based and some of them were free speech based, but

Jim Beach 29:01
okay, Cindy, very, very interesting. And then, when did it turn into your life mission?

Cindy Cohn 29:09
Well, kind of gradually, I mean, we did this case to free up encryption from government control in the 1990s and that’s, you know, we won, and that’s, you know, part of the reason why we have, you know, things like Signal, or why, you know, when you think you’re navigating to your bank online, you’re actually going to your bank under the hood of the internet, is a lot of encryption that helps make things more secure. We still have more work to do, but we’re a lot further along than we would have been had we not won that initial case, and I would say kind of somewhere in the middle of that case. I got hooked, and you know, this was fun. We were thinking about the future. A lot of what lawyers do is often fighting about the past. We got to think about the future, and, and it was just a lot of fun, and really important. And so, by 2000 when we were, we were tying up. The encryption case, and the government was deregulating encryption. I joined EFF full time as its legal director, and I’ve been doing it ever since. It’s just, it’s never stopped being interesting and fun and important to kind of stand up for users online.

Jim Beach 30:18
You mentioned Signal, that’s the communication app that’s supposedly private, right?

Cindy Cohn 30:25
Oh, yeah, it is significantly more private than a lot of the other things that people use to communicate with. It’s not, it’s not perfect, it can’t magically solve all of the problems in security, but it is, you know, open source, it’s free, and it works,

Jim Beach 30:44
and it was started by the CIA.

Cindy Cohn 30:48
No, no,

Jim Beach 30:50
that’s the word. Street,

Cindy Cohn 30:52
well, the street’s wrong. The signal was started, signal was started by a guy named Moxie Marling Spike, who was using an earlier protocol that was developed by some other people. I think that’s, I think your facts are a little off here. Signals open source, so you can look at it yourself, or you know, get somebody who’s secure. It’s significantly more secure than lots of other technologies that you might rely on, it’s not perfect, you know, the way the main way that people get access to other people’s communications is that one end of the communication gives it to them, right? Sometimes the cops will course people into turning over their end of the conversation, so there is nothing that is secure against the other people in your communication stream, or if you’re like our, you know the Defense Secretary who accidentally added a reporter onto his signal chat, like that’s not secure, but the technology itself is, and it, it wasn’t developed by the CIA.

Jim Beach 31:52
Well, I typed in signal developed by CIA, and there’s about 100 sources that say that

Cindy Cohn 31:59
it is. I’m, I mean, I lived it. I don’t know who your sources are, or, you know, what

Cindy Cohn 32:04
we are.

Cindy Cohn 32:06
NPR says, what does NPR say about the CIA’s development of Signal, the

Jim Beach 32:15
Signal breach that was that article is talking about Jeffrey Goldberg, the reporter.

Cindy Cohn 32:23
Yeah, that’s the, that’s the guy who got accidentally entered into a group chat by Pete Hex. Yes,

Jim Beach 32:28
but then the second paragraph of the article refers to the rumor that it was started by the CIA.

Cindy Cohn 32:34
Yeah, well, a rumor is just a rumor, my friend. I sure hope,

Jim Beach 32:38
Cindy, I’m arguing that rumor is out there, that’s all I’m saying,

Cindy Cohn 32:42
and I’m telling you, as somebody who is an expert in digital privacy and security, that this rumor is unfounded, and it is designed to

Jim Beach 32:53
make all I was arguing was that the rumor is out there, I don’t know if it’s valid or not, I’m just telling, just you know, just one thing I know about Signal is that it was started by the CIA, that’s all I know. Then what we are discovering is how bad the rumor is, because the rumor has taken control. I mean, that’s the word on the street. So,

Cindy Cohn 33:16
what’s that? What’s that old line, you know, the ally can make it halfway around the world before the truth gets its gets its boots on, I just think it’s really important because people need security and they need trust, and you know, I think that it’s really important, you know, people rely on, you know, secure messaging in order to, you know, protect themselves and their families, to protect their lives, and so these kind of rumors are really corrosive, and I think that it’s really troubling, you know, because you don’t want people jumping to something that is insecure, you know, based on a lie either, and you know we really do need to not spread rumors about security, it’s, you know, the people, people can lose their lives, and I, well, I don’t think we’re doing very well. We have some of the tools, like encryption, and we have, you know, some, some, some services that we can rely on, but, you know, overall, we have not protected privacy as a country. Instead, what we’ve built is a business model based on taking data from people and making other uses of it, other than the ones that people give the data for, right? That’s how the, you know, the advertising business model, and all of the things that it’s leading to now, like people paying different prices for the same products and services, price discrimination. You know, this information goes so many places that that you don’t have control over, and it’s through something that kind of lawyers call secondary uses, right? So you give your information to Google because you want to, you know, have it tell you your location and help you do maps, but then Google. Does all these other things with it that aren’t actually, you know, what you gave them the data for, and I think that’s one way to start thinking about how we could regain our privacy is to to limit these secondary uses of of data. There’s other ways to go about it, but I would say right now our privacy is is at a really low point, and that’s due both to the failure of our laws to catch up, and the kind of rapid increases in the way technologies can be marshaled to target us, and to, you know, basically restrict our options based on the fact that the services and tools we rely on have more information about us than we have about them,

Jim Beach 35:41
you mentioned price disparity or different prices for the same goods and services, that’s all over the world now. Concert tickets are sold that way, airline tickets, are you against that pricing model?

Cindy Cohn 35:55
Well, I mean, there’s different ways to do that kind of pricing model, but when the pricing model is based on what they know about you from all the other information that they’ve gathered about you, when they know how much money you make, and they know where you, you know, where you went to breakfast, and they know you know basically your ability to pay. I think that that starts to feel really unfair to people, and we’ve seen a lot of people feel really unfair, people who live right next door to each other, paying, you know, really huge differences in how much they’re paying on their property insurance, which you know should be based on the property, and instead it’s being based by based on all the other information that data brokers have about them that insurance companies are using to set prices. I think a lot of people feel like that’s unfair, and it’s certainly not obvious. It’s not something that people are aware of, that all of this, you know, personal information about you is being decided, is being used to decide how much you pay for things. That’s very different than setting the price, say, on, you know, are you trying to leave at rush hour, or other kinds of ways in which people might pay different prices, and I think it strikes a lot of people as unfair, and something that ought to have some guardrails around

Cindy Cohn 37:08
it,

Jim Beach 37:08
that strikes me as very unfair. Yeah, I don’t have any problem based on how many tickets are left, you know, there’s only right, that’s that’s so the price goes up, but if they’re, if they are taking an airplane and flying over my house and determining the quality of my roof to decide if I get property insurance or not, I don’t think,

Cindy Cohn 37:30
yeah, that’s that’s great, right? Because that’s based on your property, but if they’re deciding how desperate you are because you’re unemployed right now and they know you don’t have a job and so you’ll pay anything to keep your house, and then they’re deciding how much you’re going to pay for insurance based upon your desperation and your financial situation. I think that strikes a lot of people as unfair. Those are two different things we’re seeing. The second kind of price discrimination far more often now in ways that are pretty sneaky, and I think that your there needs to be a line around what these companies that are gathering information about you as you go about your day, you know, we’re leaking data all the time, that information is being gathered by data brokers, some of which are pretty shady and sold to lots of other people, and again we’re starting to see the impacts of that, you know, both, both because we don’t have any protection in our law and because the technology is making it easier and more powerful to do that kind of decision making, and so we need to, we really need to face this and start thinking about, like, what are, what are we comfortable with, what limits should we put on that kind of use of our data? Right, it all comes back to all the data that’s being collected about us as we go about our day, and the fact that these business models are essentially based on using superior knowledge about us and our lives to maximize how much we pay for things.

Jim Beach 39:03
Do you think that they should be able to spy on us? Come look at our house, come, you know, inspect our house from the air with a drone that we don’t approve.

Cindy Cohn 39:16
Well, I think that you, I think you should be aware of what they’re doing. I don’t think it’s cool or appropriate for them to be doing sneaky things that you don’t know about it. I think it’s perfectly legit for somebody who’s offering you home insurance that includes replacing your roof to say, look, we’re going to fly a drone over your roof, or what you know used to happen, they send an inspector up on your roof, either way, and we’re going to use that to decide how, how much you pay, because that’s based very directly on how much they might pay if your roof falls in. Those are those are really fair and reasonable things to do, as long as they are disclosed. But I think them saying, look, we’re gonna, we’re gonna figure out whether you, you know, whether you have some extra cash lying around. Pound, because you know, I don’t know, because, because you just got a bonus at work, and so we’re going to charge you more money based upon the fact that we think you can pay a little more. That strikes me as wrong.

Jim Beach 40:11
Yeah, that strikes me as wrong too. What about free speech?

Cindy Cohn 40:15
What about

Jim Beach 40:16
it?

Cindy Cohn 40:17
Oh, how are we doing?

Jim Beach 40:20
Way too much free speech?

Cindy Cohn 40:23
I think I think that we have, I think that it’s not about quantity as much as it’s about quality. I think it’s really important that everybody have a voice. That’s one of the things that the internet made possible, is people who didn’t, you know, have access to a printing press or a radio show could make their voices heard, and, and you know, kind of move forward with with the things that they wanted to talk about, rather than just the things that the gatekeepers wanted to talk about. I think that’s a very good thing. Now, that doesn’t mean that, you know, that’s a license to harass people, that doesn’t mean that anybody has to listen to you, right? You should be able to, as a listener, decide who you want to hear and who you don’t want to hear, and you should have tools that help you do that. And, as you know, you can’t, you can’t force yourself down people’s throats, but I think that, you know, I did a lot of human rights work with people all around the world who were suffering under repressive governments, and you know, the internet still serves as a really important way for people to get stories out in the world, you know, when they don’t have access to, you know, the media, and that’s really, that’s still really important, and I want to make sure that while we pay attention to people who are abusing free speech, and we, you know, enforce our harassment laws, and we give people tools to be able to not listen to people they don’t want to listen to, that we also are not shutting off the means of communication for people who, you know, were essentially shut out before the internet came along and let everybody have access to communications tools, so it’s a matter of getting that right, and it’s not either or, and anybody who tells you it’s either or, I think, has not been a free speech lawyer for very long, and, and, and when you look at it that way, then you can begin to make reasoned decisions about whether things are over the line, and whether we want accountability for them, and where we really need to stand up and make sure that we are, we are not cutting off our nose to spite our face.

Jim Beach 42:32
All right, Cindy, do I have a right to have a job that’s not taken away by AI?

Cindy Cohn 42:39
Well, it’s not a really a rights-based thing. I mean, again, I’m sorry, I’m being kind of lawyerly about you. I think that it’s important that we think about the people who might be displaced by AI in the same, at the same time that we think about the way that AI might make some jobs better and even create new jobs, and I think that we have to be clear-eyed about that, I, I do think the people who are selling AI as the thing that’s going to make all jobs go away are kind of over selling it, but that doesn’t mean there’s not things that we need to do to make sure that we just like when automation came along, when the, you know, when other other kinds of really powerful tools have come along, we did not take the time to make sure that the people who were being displaced had the support that they need, and I think that’s something we need to do now. We need to, we need to do better.

Jim Beach 43:33
I would certainly agree with that. What about the other issues that you’re encountering with AI? What other kind of problems in lawsuits or legal issues are popping up because of it. What about, well, I mean, illegal reading of all of our books and all of the lawsuits there.

Cindy Cohn 43:50
Well, I think that there is a lot of room for liability for what AI spits out at the end, especially if it’s giving misinformation and, you know, lying to people, I think it’s really important that you know, just because a machine made a decision doesn’t mean that that decision is not questionable, and it doesn’t mean that we don’t use all the tools that we use when we’re questioning a human decision, even you know that having a machine doesn’t protect the decision making process, it doesn’t. It should not end the ability to explain, you know, if a machine decides that, you know, I’m, I’m not going to get bail, I should be able to figure out, like, how did it make that decision, and query it the same way I would if you know a judge decided I didn’t get bail, or maybe even more, if a machine decides that I’m going to get pulled over, you know, when I’m driving around, I should be able to have due process, and there should be explainability of those decisions, and I think we really need to build up that kind of accountability, because right now we’re starting to see too many people, both officially and unofficially, treat a machine decision as if. It’s like perfect, and always right, and I think that we, you know, we’re beginning to see that that’s not true. Certainly, as a lawyer, I see, you know, a lot of times these, these, these AIs are hallucinating cases, right? They’re just making things up and citing them as if they’re the law. So, in my particular area, it’s really acute. Right now, we’re seeing a lot of it, but we’re, you know, that that can happen in other realms as well, so I think making sure there’s accountability, explainability, due process, all of these things that we value need to be applied in the context of AI, and that can be kind of tricky, but I think it has to happen in terms of training the AI’s, and whether you know there’s a copyright problem in the training of AI’s. I think I’m on the side of it being a fair use. I think that the training of the AI on this material, while there can be some situations, and when it, in which it’s not okay, overall, you know, copyright is designed for people to, you know, not have somebody you know, you know, to make sure that you get paid when somebody reads your work or somebody listens to your work, and, and what AI is doing, you know, what these machines are doing when they’re reading all of these works, isn’t isn’t necessarily replacing the work, if it replaces the work on the out end, the outgoing end. Then I think there should be liability, but I don’t think the training itself is a copyright infringement, and you know, I mean, I could go into some geeky reasons about it, but copyright wasn’t created for this purpose, and it’s very inflexible, and if we decided to apply copyright to training, I think what we would create is two big companies that were the only AI companies. There wouldn’t be any new AI companies. We’d stop competition. It would just be Open AI and Anthropic and Grok, and maybe Google. Like the big tech giants would just eat up this new technology, and they’d be the only ones that could provide it, and I think that’s dangerous. It’s dangerous, for you know, I know you have a lot of people in your audience who are trying to do startups, who are trying to build businesses, and I really worry that a copyright approach to AI training materials really is going to eliminate the ability for people to compete in the area of AI, because only the really rich companies will be able to do it, and I think you have to pay attention to the costs when you’re thinking about what legal scheme you want to put on a new technology, and AI is no different. Again, that doesn’t mean there isn’t liability, you know, when it spits out and starts sounding like Scarlett Johansson. It’s perfectly legitimate for her to say, “Look, that’s not appropriate, and get that stopped and get accountability. That’s different than the training side.

Jim Beach 47:53
And

Cindy Cohn 47:53
I hope that’s..

Cindy Cohn 47:54
I hope I explained that well.

Jim Beach 47:55
Did you? Did you explain it very well? And what about the accountability for just false data, or you know, I type in, is it okay to take an aspirin, and the aspirin kills me.

Cindy Cohn 48:09
Yeah,

Jim Beach 48:10
what about any kind of liability? Because I use the AI a lot, and I find that after an hour, or I don’t know, after a certain number of time, the data just gets worse and worse and worse and worse.

Cindy Cohn 48:21
Yeah,

Jim Beach 48:22
you know,

Cindy Cohn 48:22
yeah, I think they should have liability for that, like it just says somebody, just as a human would, right? Like, I don’t, I don’t think that I mean there are some different legal theories for how to create liability, and some of them are better than others, and again, I don’t want to get too legal geekery about it, but I think that I think that it is reasonable to say that if you were harmed because you relied on this technology, which did not give you a signal that it didn’t know what it was talking about, and you relied on it, and you’re hurt, there should be some accountability there, but I hope that the other thing that happens, as an, you know, and you’re getting this experience right, is that people start to get a better intuition about when the technology is right and when it is wrong, because on the, you know, I think there should be liability and accountability, but I think on this, on our side, as the humans, we need to start to get a better idea about, you know, the context in which this thing is going to succeed and tell us good things, because it does a lot, and the context, and when it’s not. And let me, let me give you an example, like when you’re in the checkout line at your supermarket, and you see the National Enquirer there, and it’s like aliens attack, you have the good judgment to know that that’s probably not true, that while it looks like a newspaper, all of the other context and what it’s saying gives you a good indication that this is not a fact check source of truth, this is, you know, the National Enquirer, or whatever those magazines are, we need to start to developing those kind. Kinds of intuitions for what our AI’s can do, because sometimes they’re good and sometimes they’re bad, and we as a society, and honestly, some of the developers themselves do not yet, do not yet have a good ability to tell us when it knows what it’s saying and when it doesn’t, and as a society we have to get a lot more skeptical about what these tools are telling us, because we know we know that they don’t know everything, we know that they are largely, you know, that it’s an engine that’s predicting the next word and doing analytical things, it’s not a truth bot, it’s a different thing, and it can be really, really helpful for some uses, but this idea that it’s generally always truthful and right is something, as a society, we really have to get over, because it’s dangerous, it’s hurting people, but, but I think that it’s, it is going to be, as you know, in some part you want to create accountability to make a better world, and, and liability, and I think those are important conversations, but at some point we, as humans, also have to start figuring out, like, when do you trust the AI, and when don’t you?

Jim Beach 51:11
Yes, well, you have to pay a lot of attention. Again, the best definition I ever heard, Cindy, of AI is that it’s an first week MBA intern at your new business,

Cindy Cohn 51:24
exactly, exactly,

Jim Beach 51:26
but they’re wrong 90, you know, 20% of the time, because first week

Cindy Cohn 51:31
I think that’s totally true, and same with the lawyering, although the other thing you have to realize, and sometimes maybe your first week MBA students do this, but the AI doesn’t know when it’s lying to you and when it’s not, and so you know sometimes there’s a tell, right, with a young person, you know that they’re kind of way out in terms of like not telling you, you know, kind of guessing about the truth, whereas an AI will sound really, really confident and truthful when it’s not, because it’s not sentient, I mean, I know there are people who think it is, but it doesn’t know the difference between when it’s lying and when it’s not, and so you have to have better ability to distinguish that, because it’s not going to give you the clues that you might get with a person you know, and I think that, that again, this is a process that we as a society, are kind of being thrust into, we may, we may not have chosen it, but if you’re going to rely on a, an AI to assist you with things, you have to start paying attention to figuring out when it’s telling you the truth and when it’s not, when it’s pulling in things that are appropriate and when it’s not, and and use your judgment about how, how to rely on it again. I don’t think your judgment is a substitute for liability and accountability for the AI’s. I think that should happen too, but it’s not either or. Again, we have to, we also, as a society, have to start thinking about it, and again, we, we’ve done this with every technology again. AI is, is different in some ways from earlier technologies, but in this way it’s somewhat the same. Right? When I was a kid, we learned about, you know, Orson Welles did a thing called The War of the Worlds, right, where he did a radio show where he told a story very, very convincingly about aliens landing. I don’t know, aliens are coming up in this conversation a lot, but, and you know, a huge chunk of the country thought aliens were really landing because radio was a new medium, and people did not have the instinct yet to tell the difference between a radio play and a newscast, and because the play was cast as a newscast, a huge chunk of people in this country thought that aliens were landing. I think we’re starting to have that, you know, we’re in a similar moment with AI right now, where people don’t have enough familiarity with the technology to be able to develop an instinct to win, you know, when it’s telling us the truth, when we should rely on it, and when we shouldn’t, and you know it’s, it’s, it’s important that we recognize that, that we step back a little bit, and you know, even if it presents itself as your friend who knows everything, it is neither your friend nor does it know everything.

Jim Beach 54:15
Cindy, we need to wrap it up there. Great information, and really appreciate you helping us out, and congratulations on the book again. Privacy’s Defender, my 30 year fight against digital surveillance. How else do you want people to find you, Cindy?

Cindy Cohn 54:30
Well, you can find eff@eff.org and Privacy’s Defender, you can buy it there, or anywhere you buy your books, or audio books, or otherwise. We’re also having a five episode podcast come out where I talk to some of the people in the book and give a kind of a broader perspective on the stories I tell and on this this internet history. So, please come to eff.org and you can find all of that, plus our very cool merch.

Jim Beach 54:57
Thank you so much for being with us, Cindy, and

Cindy Cohn 54:59
our. Thank you.

Jim Beach 55:00
Right back. I’m sorry, I’m lying. We are out of time. Have a great day, everyone. Take care, and go make a million dollars. Bye now.