We were recently covered, in MIT Tech Review, by well-respected tech journalist, and IT editor, Tom Simonite. Tom and I spoke on the phone the week earlier, and I walked him through our company’s history, the application/product and the longer-term goals and mission of our nascent startup.
Tom did a great job of presenting the premise and value proposition of the product, in addition to the challenges and hurdles that would come with increased individual control of data.
I was not interviewed, but we were similarly covered by Slate, the next day. There are 940k Twitter followers between Slate and MIT Tech Review. We also made it to the front page of Techmeme. Needless to say, there’s been an increased buzz about Datacoup since the recent press.
Like anything controversial, there was both positive and negative criticism of our platform. Giving transparency and money back to people for their data stands to disrupt a surreptitious $300bn market. The tip of that surreptitious spear being the $15bn data brokerage industry. We’re looking at you, Acxiom, Epsilon and Experian.
We are big boys (from a small startup) and don’t mind criticism- It comes with the territory. Perhaps less palatable, though, is confusion. Much of the conversation in our Twitter feeds, following publication of the articles, revolved around the $8 per month figure. Would you sell data for $8? I’ll take $8 and run! $8 is not nearly enough! I’m worth more than $8! Hooray $8 is way more than I thought I’d make!
All of the questions and sound-bytes about $8 misses the broader point of what we, at Datacoup, are trying to do. $8 was derived from a simple calculation: How many people do we want for the beta + How much can we stomach paying them out of our cash-starved bank account + How long can we pay these people until we get data purchasers/funding/something else lined up. We also did some survey work last summer, but $8 was primarily driven by our own constraints.
In sum, $8 has little relevance as a metric for the actual value of your data. Fast-forward five years: In a mature, robust, liquid, two-sided free market for personal data, could you make $8 for it? Maybe. Who knows.
The scale and liquidity of the market are certainly major drivers of personal data valuation in a marketplace. Equally as important is the type of compensation for said data. Is Gap motivated to pay you $8 for your data, without any assurance that you won’t take that $8 and shop somewhere else… like J. Crew? Nope. But they are motivated to give you $50 off a $100 pair of jeans at any Gap store. So in the blink of an eye, the value of your data just went from $8 (or less) to $50, based upon Gap’s desire to have you come in and buy something. Intent plays a major role in the value of personal data, as does context. Were you going to shop at Gap anyway? Did you need a pair of jeans?
Quite clearly, this illustrates the fact that personal data can and should be sold by individuals in a number of different ways. For example, commercial entities like brands, retailers and CPG’s are constantly trying to get a better understanding of consumer audience segments. For this, they may want a combination of social media + spending data across a subset of 10k females who live in New York and are between the ages of 25-30. For this, these females would agree to be compensated for being part of this segment, and in turn the commercial entity purchasing the data could learn more about this segment’s social media + spending habits. This would require absolutely no give up of identity, as the conclusive deliverable to the data purchaser would simply be a summary of what these “types” of people do.
Alternatively, as mentioned in the $50 off Gap example, if you are willing to part with your habits and have them be linked back to you personally, you could potentially earn $50 or more from just a single vendor. Extrapolate the same idea to a bigger ticket item like a car or mortgage and the value of “data” grows meaningfully.
As is hopefully becoming clear, what Datacoup is trying to achieve, in the long run, is a marketplace where individuals, controlling their data, are the arbiters of who receives access to their data, on what terms, and at what price. The first step forward is getting your data into one place . WIth our data currently spread across 10-20 different platforms and 5 different devices (and increasingly growing), it is nearly impossible to leverage and deploy that data in a coherent, and digestible way. The current environment also makes it far easier for others (data brokers, ad-stack companies) to stick their hands in your data cookie jar with impunity.
So, getting back to the original sentiment; don’t get tied to $8 as anything meaningful or relevant. In fact, that number could change very soon, depending upon how quickly we can close our next round of funding. In the long run, it will most definitely change when a robust, two-sided market exists. By that point you’ll be choosing between cash, products, offers, subscriptions and other forms of compensation for your data.
What Datacoup does want you to get tied to, is the notion that your data is a valuable asset. Start to harness its value by aggregating, understanding and deploying it as you see fit. Perhaps the most salient point is that you currently get nothing (or very little) for your data. And make no mistake, it is out there being mined, packaged and sold by both savory and unsavory actors. Any increase from the current nothing you receive for your personal data is a win. In time, with a more mature marketplace, your data will be an asset or currency that commands much value in return for dispensing it.