What’s the Right Model for Personal Data Stores?

This post was originally published on Ctrl-SHIFT

Last week the US based personal data store Personal announced it was moving from a free to a paid for service. We caught up with co-founder and CEO Shane Green to ask him about the background.

1. What does this move from Personal suggest about the evolution of the PDS market as a whole?

I think it signals the emergence of a robust, stable business model that both consumers and companies already understand – you pay for a service or product that is valuable.

We believe the heart of the current PDS or personal data vault market opportunity is around productivity and convenience, in the vein of Evernote or Dropbox. While we see incredibly interesting VRM-type opportunities on the horizon, we have found that people immediately understand the value of a PDS if their lives are made easier and more convenient by it.

For that reason, we’ve priced our core service – $29.99 per year – at a price point that individuals are already paying for similar type services. And given the sensitive and private nature of certain data in a PDS, we have also found that people have more confidence in the privacy and security protections offered when there is a cost associated. And, of course, they don’t have the lingering suspicion about “being the product” that is being sold as can be the case with a free service.

I would add that we have also found a meaningful appetite among companies in certain verticals, such as banking, insurance, health and education, to help pay for such a service if it brings value to their customers. The fact that they are willing to pay for the service while respecting the integrity and sanctity of an individual’s control over a PDS is a huge step forward for the industry as a whole.

For more background on our announcement, please see these two links:
http://www.bizjournals.com/washington/blog/techflash/2013/06/personalcom-is-now-charging-but-its.html?page=all http://blog.personal.com/2013/06/leaving-beta-becoming-a-paid-service/

2. What are the particular things that you think people will be prepared to pay for? (is it safe storage of my data, easy form filling etc.)

As I mentioned, it all starts with productivity and convenience that is demonstrable in their lives. Our paid service will give the user a number of benefits: secure storage of and constant access to important data, notes and files; secure sharing of this information with other people, apps and organizations; easy reuse of data through automatic form-filling; and easy imports of information and documents from companies and organizations they do business with. In addition, we will charge for additional services and benefits around security and other functionality. Stay tuned for details.

While our initial go to market partners see this as more of a value added service to offer their customers, what will take the paid service to the next level is evidence that connecting with customers via a PDS and private network can impact both their top and bottom lines.

3. It’s often said individuals are not prepared to pay for services like these. Is this conventional wisdom wrong? If so, why?

I think conventional wisdom reflected a certain reality that is changing. Quite simply, PDS services have not delivered enough tangible value to date. They have been too limited in the benefits they delivered, and most have been quite a lot of work to make useful.

But all of the hard work by the current wave of PDS providers is paying off, both because the products are delivering more value, and the macro trends could not be coming together more powerfully, whether it is the pervasiveness of smart phones in our lives, the explosion of connected devices and the data they generate, or the privacy and security discussions now dominating headlines.

Organizations like Ctrl-Shift, the World Economic Forum and the Aspen Institute have all been documenting this shift recently, including focusing on big companies and governments (such as the US and UK) that are innovating around ways to give data back to people. It all points to the fact that the concepts of data vaults and individuals gaining greater control and value over their information is becoming mainstream. Previously, people didn’t have the technology to properly leverage that information. That has changed with the emergence of a number of start-ups, including Mydex, Paoga, Qiy, Respect Network, and Personal. But this trend is not limited to start-ups. The World Economic Forum’s recent report highlighted Fortune 1000 companies that are also providing products and services that empower people with their information.

4. What areas will Personal be looking to develop with this new investment?

Our main focus is on making our PDS available when and where it is needed in a person’s life. We are super focused on the different contexts where people need data – or are creating data – and how to make the PDS seamlessly integrated while maintaining user control with privacy and security.

Ironically, many of those contexts involve companies, organizations, schools, hospitals, government agencies, apps, sites, etc. – third parties of all kinds. There is just no reason people need to manage such data interactions separately across what we call their “personal data graph.”

Just as the Bring Your Own Device (BYOD) movement was inevitable, we believe the Bring Your Own Data movement is just an inevitable. But a BYOD world requires new kinds of permission and trust, and as that happens, I think you are going to see a wave of BYOD apps that are a magnitude better than current apps that either track us or require social data sharing. We are excited to help catalyze that ecosystem.

Note

Ctrl-Shift’s Personal Data Store report analyses the growth of the PDS market, while our Breakthrough Efficiencies research look at some of the benefits organisations can reap by linking to new personal data management services.

Data Vaults Go Mainstream at World Economic Forum

This post was originally published under the same title on the Personal blog, A Personal Stand and can also be found on the World Economic Forum Rethinking Personal Data website 
WEF.v1

In the last six months, a fast growing and somewhat unexpected chorus has emerged around the need to give people greater control over their personal information.

Mainstream think tanks are now focused on it – see the recent Aspen Institute report, which focuses extensively on “the new economy of personal information” and the central role of individuals in it.

Governments are also catalyzing this new model. The Midata initiative in the U.K. and the Open Data initiative in the United States are giving back government-collected data to citizens in organized, reusable form.

But what’s most interesting is the growing realization among companies that their futures are tied to building new relationships with consumers who are increasingly empowered with and savvy about their digital data, and who have growing concerns about how their data is captured and used.

That’s why a new report released today by the World Economic Forum, whose membership is made up of Fortune 1000 companies, is so important. “Unlocking the Value of Personal Data: From Collection to Usage” is a product of the Forum’s multi-year Rethinking Personal Data Project, and was led by Forum official Bill Hoffman (see his blog today on the report) and a steering committee of the Boston Consulting Group, Kaiser Permanente, Visa, Microsoft, AT&T and VimpelCom. Personal also participated, and is a member of the Forum’s Global Agenda Council on Data-Driven Development.

When you consider the organizations behind the report, its major conclusions are all the more dramatic:

    • Companies and governments need to put people at the center of their data, empowering individuals to engage in how their data flows through technology. This means giving consumers greater access to and control over their information as well as the tools to benefit directly from it.
    • We need to move past old notions of privacy that revolved around simple notice and consent. Instead, companies should adopt Privacy by Design principles that address every stage of product, technology and business development. This would ensure, for example, that apps feature user-driven permissioning of data and have greater transparency and control over how it’s used and valued.
    • The report blows a hole through the canard that e-commerce and privacy cannot peacefully coexist. It’s not a zero-sum game. Instead, it’s a win-win for businesses and consumers where even more data can flow between trusted parties.
    • Perhaps most exciting, the report detailed a number of use cases in which companies are helping consumers to leverage their personal information to improve their lives, ranging from health care (Kaiser Permanente) to financial data (Visa) to automotive price transparency (Truecar) to online reputational information (Reputation.com).
    • Personal was also profiled to demonstrate how personal data vaults can make the time-wasting tradition of form filling obsolete, saving literally billions of hours annually, and greatly improving the delivery of public and private sector services. Check out www.personal.com/fillit to see how your company or organization can participate.

We’re excited to see the model we have been building over the past three years start to catch fire, and we expect to see a lot more progress in the next six months.

Data as a Human Right

This post was originally published on the World Economic Forum Blog.

WEF-logo

Data has the power to transform our lives – collectively and individually. What is needed to unlock the profound opportunity data affords to improve the human condition – and to defend against a multitude of threats – is not technical, but an ethical framework for its use by and beyond those who initially collect it, including providing access to individuals.

At its most fundamental level, data about individuals represents a new kind of “digital self” that cannot be easily distinguished from the physical person. Some consider it a form of property; others a form of expression or speech. Those working in the area of genomics often view personal data as the DNA sequences that make us truly unique. Whatever lens one uses, it has become increasingly clear that the consequences of how personal data is used are every bit as real for people and society as any material, physical or economic force.

Properly harnessed by ethical practitioners, the principled use of “big data” sets can improve our economies, create jobs, reduce crime, increase public health, identify corruption and waste, predict and mitigate humanitarian crises, and lessen our impact on the environment. Similarly, empowering individuals with access to reusable copies of data collected by others, also called “small data”, can help them drastically improve the quality of their lives, from making better financial, education and health decisions, to saving time and reducing friction in discovering and accessing private and public sector services. Evidence of the positive impact of leveraging data, by both institutions and individuals, abounds.

However, data, like the technology that generates it, is in and of itself neutral. It can be used for good or ill. With a proper, ethical framework, data can – and should – be leveraged for the benefit of humankind, simultaneously at the societal, organizational and individual level. Misused, its power to harm and exploit is similarly unlimited.

In fact, what raises the ethical use and respect for data potentially into the realm of a fundamental human right is its ability to describe and reveal unique human identity, attributes and behaviors – and its power to affect a person’s, and a society’s, well-being as a result. Just as in the physical world, basic rights and opportunities must be preserved.

Indeed, it is already well recognized that invasions of our digital privacy can be exploited for repression, and that technologies for sharing data can be harnessed to support freedom. More fundamentally, though, we need to extend our core rights themselves into the digital world. For example, we must adapt our notion of freedom of thought to account for the new reality that much of our thinking goes on in digital spaces – as does the management and sharing of our most private information. Preserving individual freedom will now require protecting autonomy with respect to our own data.

Clearly, cultural and regional differences regarding human rights in the analog, physical world are sure to arise in this digital, data-oriented world. We do not seek to resolve those issues, but to develop a clear framework of principles to help provide data, data access and data use the protections they deserve.

A Digital Bill of Rights By the People, For the People

This post was originally published under the same title on the Personal blog, A Personal Stand.

The Obama Administration unveiled today its long-awaited framework for online privacy, Consumer Data Privacy in a Networked World. The result is a bold and thoughtful step in the right direction, and it will make an impact, regardless of whether Congress acts. It’s another sign that power on the Internet is shifting toward individuals and away from companies.

There’s still much more to do:

1.  In talking about reform and creating a new model, we must put individuals firmly at the center of the framework. This means giving them the tools to drive demand for their valuable data resources to transform the current model into a “user-centric” one. With individuals truly in control – and looking out on the world from their perspective – every other principle and right about privacy falls into place.

2.  While the framework will require companies to re-evaluate their data practices and conform to new standards, what about our government’s obligations in handling our data? The Obama Administration has been impressively forward-looking in this arena – particularly with veterans, education and health record data – but it seems that individuals care as much about what the government knows about them as they do about companies.  We need rules for government, too.

3.  Actual citizens need a seat at the table alongside the privacy advocates, law enforcement representatives, companies and academics that will help establish codes of conduct.  If the framework is being constructed for the benefit of individuals, don’t we deserve a say in the matter, too? Perhaps the final say?

To make the last point a reality, we’re taking matters into our own hands.  In a few weeks at SXSW in Austin, Texas, I will join my friend, Anne Bezancon, founder and CEO of Placecast to create – with other SXSW attendees – a Bill of Rights “by the people, for the people” that we would expect both companies and the government to respect. If you will be attending the conference, please join us for our interactive Sunday afternoon session, We the People: Creating a Consumer’s Bill of Rights. Please also check out the session by our CTO, Tarik Kurspahic, on building a “privacy by design” company.

What is your personal data really worth?

This post was originally published under the same title on the Personal blog, A Personal Stand.

New York Times reporter Joshua Brustein provides a great introduction to the model that Personal and companies like us are developing in “Start-ups Aim to Help Users Put a Price on Their Data.” However, a central question remains unresolved: what is the true economic value of personal data?

No one knows the answer – yet – because no fair market exists for individual data.  The question raises the possibility that, if it’s not very much, people are unlikely to care enough to change their behavior. We believe there are a host of non-economic reasons that people will want to proactively manage their data (time savings, greater privacy, less friction, making better, faster decisions, etc.), but the question of determining economic value is critical.

New York Times photo of Personal team

The current model is built for companies, not people

Some look for clues to the average annual revenue per user for Google and Facebook. These “free” services, whose advertising revenue is based largely on personal data, earn $24 and $4 respectively per person every year. But is $28 enough to motivate people to change their behavior and do a lot of work? Maybe not.  But it is the wrong question. Properly used, we believe companies like Personal will be able to prove your data, when tied to a single purchase, can create 10-20x the value that Google or Facebook can over a year.

The current paradigm is entirely dysfunctional and inefficient from the perspective of the individual. For example, the Direct Marketing Association says over 97% of online advertising fails to reach the right person at the right time. The pennies from the 3% success rate may add up for companies exploiting data across millions of people, but it requires a number of unsustainable practices, such as the increasingly invasive and sometimes unethical tracking of people. It also requires that they co-opt your attention and time and resell that along with your data to others trying to reach you.

The emerging user-centric marketplace

What might a user-centric marketplace look like and how much economic value can a person realize in a year?

First, you need a marketplace that respects the sanctity of one’s data, time (time is money, after all), privacy and identity (anonymity is the default). The technologies, business rules, and legal and privacy protections must be created nearly from scratch to protect the individual. (Our CTO, Tarik Kurspahic, will present at SXSW on building a privacy-by-design platform).

Second, the marketplace would focus on commercially relevant data such as your brand, travel or clothing preferences, along with data about your intent to buy something (also known as purchase intent).  These two types of data alone can fundamentally change data economics when combined with a controlled marketplace to reach you when and how you want to be reached.

This last point is key. We do not support the idea of people “selling” personal data. Rather, we believe such data can be used in a safe environment to connect people with companies with highly relevant products, services and even content and information. Doc Searls and others have referred to this idea as Vendor Relationship Management (VRM). Companies that play by these new rules will have the most direct and positive channel ever created to reach people, including their existing customers.

People can realize thousands of dollars per year

Finally, we believe companies that earn your business (and those who don’t) will be willing to compensate individuals for having the chance to interact with qualified buyers of their particular good or service.  This far more efficient marketplace can easily add up to thousands of dollars annually as people realize the full benefit of their data, time and purchases. That should move the needle for just about anyone.

We appreciate the serious attention being focused on this emerging space by the New York Times, as well as The Wall Street Journal, The Economist, AdAge, AdWeek, Forrester Research, MIT Tech Review, The Washington Post, TechCrunch, Mashable, the Harvard Business Review and others. It is an idea that will ignite untold innovation and benefits for each of us.

Seeing the Forrester for the Trees

This post was originally published under the same title on the Personal blog, A Personal Stand.

As recently as a year ago, many of my colleagues and friends told me they just didn’t understand what Personal was trying to do. What did it mean to own and control your data? Why was data even important to a person? Why would companies, particularly marketers, ever embrace transparency and empowering individuals with their data when exploiting that data is at the core of their business model?Forrester logo

What a difference a year makes.

Amid the many positive developments and increasing coverage of this issue, such as The Wall Street Journal’s courageous “What They Know” series, comes the excellent new Forrester Research report Personal Identity Management by Fatemeh Khatibloo, which was released this past Friday.

The report is not only a must read for those who want to understand the complex dynamics at play in this space, but it provides an accessible framework that will help companies prepare for the transformational empowerment of individuals that is already underway. Download the report.

You can also read Khatibloo’s blog on the report at Forbes.com.

Early Concerns about Being Defined by Others (1992)

I would probably be too embarrassed to mention my graduation speech at the University of Michigan in May 1992 had it been a glorious success. As it were, gathering storm clouds over Michigan Stadium forced school officials to rearrange the program, pushing commencement speaker Carole Simpson of ABC News and other dignitaries in front of my speech. In addition to being the opening band trying to follow the main act, I was further thrown off when the wind blew off my my graduation cap as I was about to stand up, putting an exclamation point on the fact that we were all soon to get soaked. I rushed through the speech amid cat calls and growing restlessness. I remember my international affairs professor, Raymond Tanter, telling me later that I had a hard lesson in the fact that timing is everything. Yes indeed.

I only recently realized how much the speech suggested themes of Personal after digging it out of a box in my basement. I was outraged at the time that the label “Generation X” had been so successfully tagged to us by the media and others. At best, we were “materialistic and apathetic”, as I wrote; at worst, we had no name whatsoever. The speech was titled “On Defining a Generation”, and was a call to arms to my peers to take control of their identities and not let others define them individually or as a group. Here are a few excerpts that are eerily relevant to how I believe we are being represented by others who capture our data and define us by it, as well as the value of your intent data (your future behavior) vs. your historical data:

“…Until now, we have been shaped and defined by our parents, our schools, and the media. Today, it is our time to bring together where we have been with where we want to go, and in so doing, to define ourselves.

“…It is a dangerous thing to let others tell you who you are. No one can understand the complexities that make up the mind and soul of another individual. Such attempts to define a person usually fall short; they limit rather than capture essence…Do such attempts to simplify our diverse character affect us?

“…These diverse experiences are all part of our generation, and they show the impossibility of arriving at singular conclusions about our character. We should not attempt to stereotype ourselves, rather, we must reflect on these shared experiences and begin to understand and thoughtfully define our generation.

“…[I]dentity is not simply a composite of the past. We can be identified as much by where we are going as where we have been. This may be the more important task in this process, because it is the part over which you and I have control. What problems are we committed to solving? Are there goals and ideals that the majority of us share that give us distinction from other generations? Or maybe the discipline, will power, and most importantly, the tolerance, to accomplish our goals is what will set us apart.

“I encourage you to be active and thoughtful in defining our generation. Because if we do not define ourselves, experience has shown us that someone else will.”

I was obviously referring to the traditional “media” at the time, and not Google, Facebook or any of the data and technology-driven media companies of today who are defining us digitally by capturing all that we do on their sites and others. Little did I know that one of the co-founders of Google, Larry Page, was just behind me at Michigan and was soon to envision one of the greatest data collection and organization tools in human history, or that the quality of our lives would be increasingly shaped by our identities and reputations in the online world.

In his far happier commencement speech at Michigan in 2009 (as the main act, not the student warm up band), Page shared one of his favorite quotes, which I had not heard but really like: “Always work hard on something uncomfortably exciting.” Amen.

I think this would qualify by his definition: Help people understand how incredibly limiting and inefficient it is to be defined by companies using data they surreptitiously capture about us, and instead provide individuals with the understanding, tools, transparency and incentives to take control and do it themselves.