The Era of Small Data Begins

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

This is the first post in a series on the rise of “small data” and the new platforms, tools and rules to empower people with their data. It was written for “The Rise of Big Data” panel at the Stanford Graduate School of Business E-Conference on March 6, 2012.

Big data is big business

More data is created every year or so than has been created in all of human history. In this always-on, always-connected world, where even things are being plugged into the Web, the amount of data is growing exponentially.

The collection, storage, analysis, use and monetization of all that data is called “big data.” Corporations and governments are hyper-focused on becoming big data experts to avoid being permanently left behind. The first movers to master the art and science of big data are already changing the way we live, while disrupting industries and amassing fortunes at speeds never before seen.

Given the stakes, massive investments are being made every year to build the technology and expertise required to succeed in big data, optimized, of course, around the needs of companies and governments, not individuals. Industry experts have likened this big data boom to the early days of “big oil,” and refer to data as the “new oil.” Just as oil was essential to building the modern industrial economy, data has become the lifeblood of the new digital economy.

Companies must learn to compete in big data regardless of their industry, or else face obsolescence. This is a tough challenge and touches all aspects of the operations, strategy and culture of companies. At the same time, opportunities abound as entirely new industries are emerging around data as they did around oil — sourcing, extracting, refining, mining, analyzing, distributing, and selling large sets of data.

Big data creates big problems

With its insatiable appetite for digital bits and bytes on each of us, big data is driving a virtual arms race to capture and exploit information about our every move. Big data will log the life of a child born in 2012 in such a way that the person’s activities will be able to be reconstructed not just by the day, but by the hour or minute. In the hands of bad actors, the potential for wrongdoing with these permanent and growing archives of our lives is real and rightfully concerning.

Yet, until recently, people had virtually no idea of big data’s existence as its tools and marketplaces remained largely hidden. The next generation of tracking and data mining technologies are being created based on the assumption that individuals do not care enough to change their online and mobile behavior, which confuses lack of interest with the current lack of alternatives.

But with privacy and security concerns now front-page news, and the financial triumphs of companies built entirely from personal data such as Facebook, Google and LinkedIn, people are waking up and starting to ask tough questions. While companies and government regulators negotiate over how to curb the most egregious risks and abuses, a new and more powerful model is emerging that is designed around the needs and interests of people, providing them a far better, more sustainable alternative to the status quo.

Enter small data

Small data puts the power and tools of big data into the hands of people. It is based on the assumption that people have a significant long-term competitive advantage over companies and governments at aggregating and curating the best and most complete set of structured, machine-readable data about themselves and their lives – the “golden copy”. With proper tools, protections and incentives, small data allows each person to become the ultimate gatekeeper and beneficiary of their own data.

Built on privacy by design and security by design principles, small data can help people become smarter, healthier, and make better, faster decisions. It can help people discover new experiences more easily, reclaim time in their busy lives, and enjoy deeper, more positive relationships with others.

Small data can also greatly improve the capacity and performance of governments and non-governmental institutions, from eliminating time-consuming forms and other inefficient data practices, to improving public health and education by leveraging the power of more accurate and complete data provided with an individual’s permission. Such institutions can also help share important data with individuals, allowing them to have a copy for their own use.

Applied to commerce, small data holds the promise of connecting people with the best and most relevant products and services in a safe and anonymous environment. It can transform advertising into a more respectful, less disruptive industry that rewards people for their time and engagement with their messages and for their purchases. Small data offers customers the opportunity to better balance and assert their interests with companies (some have called this model Vendor Relationship Management (VRM)). Companies who play by these new rules and earn the trust of individuals will be rewarded with access to rich and robust data otherwise unavailable, giving them instant competitive advantages over companies who choose to go it alone.

The first small data platform – a data vault, private network and apps

Personal has spent over two years designing, building and launching the first scalable small data platform. At its core is a secure data vault to aggregate and store structured and unstructured data from just about any source. A private, personal network sits on top to set permissions for data to enter or exit the vault. People are able to connect with other people through the network, and soon with companies, apps, and private or public institutions, and decide which, if any, of their data they are willing to grant them permission to access.

We have put equal weight on privacy and security, and on helping people leverage their own data in exciting, new ways. These concepts are inextricably linked in small data, which requires a high degree of trust to function properly. Similarly, we have rewritten the legal rules of data ownership to protect and empower users, who we call owners. And, because we know relationships can sometimes end, we have built what we believe is the most complete data portability and deletion capabilities in a data platform. Trust doesn’t work unless you are truly free to leave.

In addition to launching our own apps in the coming months, we are inviting developers to apply for early access to build apps on our platform to show off the power and benefits of small data. Individuals have never imagined the magic of running apps on reusable, structured data about the most important things in their lives, while developers have never assumed having access to such high quality data on which to innovate. The possibilities are limitless.

We are excited to help usher in this new era where permission, transparency and privacy become the norm, and where companies and governments have to align around new rules and provide clear and compelling benefits in order to earn access.

At Personal, we see the future through the lens of small data — and we think it will change everything.

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.

A World Without Borders – Customer Data in Bankruptcy

Here is the link to my post in the Personal company blog on how customer data should be treated in bankruptcy: http://blog.personal.com/2011/09/a-world-without-borders-–-customer-data-in-bankruptcy

We don’t have this issue at Personal as individuals own their data from the start when using our data vault service (thus there would be no “customer data assets” for us to sell were the company to go out of business), but I expect it to become a bigger and bigger issue in the coming years.

The Data Wars Begin

In a week where President Obama and the White House announced their intention to enter the fray over consumer data and privacy, the most interesting recent news has actually been the rapid escalation between Google and Facebook over data ownership. Framing it in terms of a trade war, TechCrunch declared the beginning of true data protectionism, and has been highlighting the almost daily back and forth between the two biggest aggregators of consumer/Owner data in the world.

This fight over the right to export email and contact data from one service to the other is shining a bright light on the much larger and more important issue — how critically dependent they both are on owning and controlling your and my data. No matter their rhetoric, their actions cannot hide the fact that the they look at our data as theirs. Pretty hard to start a trade war if you don’t have some kind of good or service to withhold. In both cases, the only thing they have to hold hostage is our data. That’s it.

Most trade wars are bad for everyone involved. This one, however, might end up helping Owners. Unlike privacy, which has proven harder to understand and to motivate people, data ownership is far more tangible. Either you can do what you want with your data or you can’t. There is not much room for either of them to sit on the fence. If Google and Facebook continue to retaliate, which I’m betting they do, they will do more to show their true colors around data ownership than anything the White House or Wall Street Journal could do combined. Should be fun to watch.

S.

Owners, not Consumers or Users

Consumer — an individual who consumes something made by someone else, usually with some kind of direct and clear payment. The most common name used by companies to refer to individuals.

User — an individual who uses something made by someone else, usually with some kind of payment, although not frequently direct or clear. The most common name used by web and mobile companies to refer to individuals.

I’d like to propose a new word for the new media lexicon: Owners. Companies are very clear on who their “owners” are, and they go to work to pursue their interests every day. When it comes to our data and time, we should start thinking of ourselves as a little enterprise organized for the express benefit of ourselves. We have tools never before imaginable to build a far more favorable model for ourselves.

But what do we, as enterprises, do?

What product do we make? What service do we provide?

What marketplace are we in? What forms of payment do we accept?

How do we calculate our bottom line?

In the multi-hundred billion dollar industries funded by advertising, the first answer is quite simple: we make data. Data has become a new form of currency in the connected world (joining money and time), and we, as individuals, have an unfair advantage in creating, aggregating and owning the best data about ourselves as Owners.

We also provide the critical service of our time and attention and deciding to whom to give this finite resource. Our marketplace is one where we allow others we trust, companies or individuals, to find us or know us better through our data and to eliminate huge inefficiencies and costs in our lives — and theirs. This marketplace applies to any industry that uses data today — advertising, media, entertainment, retail, health, travel, etc. As payment, we accept cash, discounts, special personalized offers, time savings, mind blowing relevance and discovery, improved safety and security, and guarantees of privacy.

Our bottom line is the most interesting of all to consider. Given the many forms of payment, each of us can choose which of these benefits to emphasize. And unlike most businesses, we can decide on a case by case basis which is most important. Sometimes I might like to maximize my economic benefits (like most traditional companies), but at others, mind blowing relevance and discovery may be most important (such as my upcoming vacation with my family). In a rush, convenience and time savings are probably most important. None of the forms of payment are mutually exclusive, but trade offs will need to be made for the good of our enterprise — just as any great manager has to do.

I hope you will consider using Owner when referring to yourself in the context of using services that require your data or time. Names matter.

S.