[Retric]

That sounds a lot like http://www.idrive.com/ or www.evault.com/ and or several other systems out there. Building a secure system is a hard problem and even if you build the best system few people can judge how well your doing. You could market it as "The only 4096 bit system" but you end up with a tiny market segment.

I would suggest starting with a secure chat system with good logging options. That way you can reasonably target teenagers, bankers and the truly paranoid. And you don't need a huge backup infrastructure or a 50$ / year price tag to compete.

[cperciva]

That sounds a lot like http://www.idrive.com/ or www.evault.com/ and or several other systems out there.

As I said, lots of people are doing online backups. Nobody else is doing secure online backups.

Building a secure system is a hard problem

Exactly -- that's why it's something which I can do but nobody else has done yet.

and [...] few people can judge how well your (sic) doing

Fortunately, with a doctorate in Computer Science, as the FreeBSD Security Officer, and as "that guy who found a security flaw in Intel processors a few years ago", I'm ideally positioned to show people what I'm doing right -- and what everyone else is doing wrong.

Is secure online backups a smaller market? Absolutely -- most people don't care about security. That's the price you pay for entering an arena where there are many established companies: The best strategy is to carve off a smaller part of the arena rather than trying to fight for the complete arena.

[Retric]

I am not talking about the size of the market, just pointing out there are already several companies that seem to do this. To be more clear: looking at idrives's home page's table iDrive, Mozy, and Carbonite all do "Security: Encryption on transfer, Encryption on storage" now I don't think these systems are going to be NSA level security but you now have to convince people you do security better than the existing players which tends to be hard.

In the end security is more about trust than the algorithm. I need to trust you not to log the password somewhere etc. Established players gain some trust because they have other things on their mind than your data and presumably they want to protect their reputation, so IMO the new guy is bester off focusing on something more tangible so you get a chance to build your reputation.

Which is why I suggest a free App that demonstrates you do security. You could build that relationship of trust and drum up some somewhat free press around how subversive your application was and turn that into a strong market.

PS: Good luck with your startup. I think you can make it work, but after considering the same idea and talking to people about what they trust I moved on to other areas .