Poll: Privacy vs. User Experience?

[justplay]

I am planning to start eCommerce, which ideally respects privacy. But for a startup that is just beginning, I want to track user activities like page visits, user clicks, etc., to understand how my product is doing and suggest related/valuable products to them.

But with an endless rant on privacy, I believe I should not track users whatsoever and respect their privacy.

What you think is a sensible(if not best) move for a startup in such cases.

Please upvotes respective choice which you think might good for us. Also, do suggest your opinion on comment.

[LinuxBender]

Do lightweight tracking on your own domains and be fully transparent with your customers and prospects exactly what you gather, from whom and for what purpose and how long you keep the raw logs and derived meta-data for. Give them a way to remove their data and to opt out. Also give them a way to double-opt-in to debug statistics if they feel inclinded to help you improve your site. Maybe even give them an incentive (discount) for opting in. Avoid tracking users on other domains, 3rd party, etc.. That should keep you in good graces with your customers, in my opinion.