Claro Partners' project Changing Models of Ownership and Value Exchange sought to understand how the concept of ownership and its transfer have changed – and are changing – in recent years. This is one of three short articles which Shareable will publish this month, featuring content from Claro's latest work.
Following last week’s post about their study into changing models of ownership and value exchange, Claro Partners presents some business cases which illustrate ways in which companies are trying to provide solutions and capitalize on issues that arise from a world seeing changes provoked by technology and shifts in behavior.
Personal Data Ownership
Personal data ownership, both online and offline, is an area that consistently provokes discussion and thinking. Nick Noles, an expert in the field from the Department of Psychology at the University of Michigan, specializes in the psychology of property and ownership. He helped us to define the concept of ownership itself by explaining that two of the main, crucial conditions of ownership are the right to use and the right to control access.
If we translate this understanding into the domain of digital personal data, it’s clear that, until very recently, mainstream services like Facebook fell short on two of these accounts. Encouraged by discussion among users and the ongoing implementation of data portability standards in general, the right for the individual to use their personal data freely is being addressed, but the right to control access to it remains ambiguous. These concerns, in particular, form the basic premise of Diaspora*, an open-source social networking platform, initiated by a small U.S. team, but funded and developed by peers around the world. In places worldwide where Facebook has easily become the new standard for social interaction, Diaspora’s proposition is an important milestone in the ongoing debate of personal data ownership.
Since almost every move we make online generates rich, relevant data and content, it seems a natural step to look for ways to extract value from the information we produce and effectively own. Although companies today often do pay to have access to personal data of hundreds of thousands – if not millions – of web users, no financial benefit, as such, is shared with the true owners of the data: those who generated it.
Some embryonic businesses, such as MyDex, are exploring potential business models in this area, but one main problem remains to be solved: the value of one person’s personal data is much higher to the individual than it is to a company. For example, a company wants to add you to their big graph with the statistic that you watched two films online last month, but cares much less than you that those films were The Sound of Music and Tron: Legacy – a fact that you may only want to publish for a deal worth substantially more than the company is willing to pay. The value for a company resides in large volumes of data gathered from a cross-section of society, which subsequently makes it difficult for them to offer a fair price to the individual. The challenge remains in finding a transaction that satisfies both parties; perhaps such companies should be exploring non-monetary compensation that goes further than the current placatory personal customization of services.
Although still marginal and low-scale when compared to traditional banks, alternative finance schemes are another facet of ownership and network-enabled transactions. Let’s be honest: amidst the current fallout from Wall Street and surrounds, anything labeled as an alternative to the conventional banking system has an appealing ring to it. Peer-to-peer dynamics play an important role in these services and recent years have seen loan companies like Zopa and Lending Club capitalize on such strategies, rivaled since 2009 by innovative hybrids of social networking and banking like Yes-Secure. Given the nature of a P2P system, the development of Yes-Secure is an important step in the natural evolution of alternative business models in the financial sphere, where trust mechanisms are a crucial factor for participation and success.
Personal finance is not the only branch of the growing alternative finance tree. In the area of crowdfunding, for example, there are many startups joining the more established players like Kickstarter and Profounder. These businesses help entrepreneurs and creatives circumvent traditional loan-providing banks and receive the sponsorship they need through direct peer-to-peer channels. A notable success ($2m revenue/year), Kickstarter could be considered one of the leaders in the growing group of project donation platforms. (Diaspora* found its funding here.) Its accessible bubbly logo branding and creative online image encourage hype around the project, which relies largely on prestige as part of its value proposition since the dividends for funders are generally of low monetary value (peer recognition and credits). Profounder takes some of the risk out of the funding stage by allowing entrepreneurs to tap into the most loyal fanbase: their immediate circle of friends and family. Returns can be paid to funders through revenue generated by the startup, returning of the value of the loan or, presumably, providing years of carwashes and baby-sitting to family members.
Another set of businesses that grabbed our attention during our research was one which enabled startups and multi-nationals alike to tap into a large pool of workers without employing them in the traditional sense. These companies operate differently from crowdsourcing schemes in that, even though geographically dispersed and contributing en masse to common projects, those involved are provided with monetary compensation.
These businesses have a place in a future where the concept of work and the workplace will shift toward networks emerging from adhocracy, which are then assembled and disassembled dynamically on a constant basis – where your co-worker isn’t in an adjacent cubicle, but on another continent. Such networks are in line with predictions that the future of work will involve more freelancing, more decentralization, more outsourcing, and further global dispersion. The water cooler chat will be via Twitter or similar, needless to say.
Examples in this area can be placed along a spectrum, from businesses outsourcing simple repetitive tasks which require little qualification, such as CrowdFlower and Amazon’s Mechanical Turk, to those that bring together the owners of million-dollar ideas with billion-dollar multi-nationals, like Innocentive. Somewhere in the middle lie other platforms like Elance and more innovative companies like LoveMachine, which facilitate collaboration in a commercial environment.
Hyper-local and time-sensitive information providers
The businesses in this group are enabled by mobile phone technology equipped with some sort of location awareness, like GPS. Although still emerging, this area could be fertile ground for a number of breakthrough initiatives. Even if you’re not regularly broadcasting to the world in real time what you’re eating, where and with whom, you’re probably already somewhat familiar with Foursquare and its location-based check-in system. Google Latitude and Loopt are two similar examples which provide information of varying levels of usefulness to people located near you.
Searching an archive of information is one thing, but add a time/location-sensitive dimension and Google becomes even more useful when out and about than just resolving a dispute over the name of the lead singer of a one-hit wonder band whilst at dinner with friends. Google’s Open-Spot connects people looking for a parking spot with those vacating the same. While this application works via “karma points” and the simple thrill of not having to lap the car park for three hours, Spotscout, on the other hand, has taken a step toward monetization of the same task. It seems that the use of time, space and data in tech could open up many more opportunities for enhanced interactions with our environment.
In part three of the series, Claro Partners continue to share the information gleaned from Nick Noles as we look at ownership and curation of digital content.
Check out all posts in the series: