To date, data is being valued and priced by everyone EXCEPT the creators of that content — YOU. If we want to change that many things need to happen, but it begins with taking the time to figure out how a person values their own data. So let’s dissect and see if we can shed some light on this idea.
First, this process is VERY unique, because for the first time EVER, every single person on the planet has the potential to sell a product. Second, instead of being a “consuming” culture and propelling the corporate world forward, human beings are the ones in a position to profit. Third, everyone’s value judgement on data is unique, personal and unquestionable. Fourth, the opportunties for people to enrich themselves in a world of possible technological unemployment is tremendously important to the welfare of society. Finally, on top of the social ramifications, there is the obvious moral ramifications. As highlighted by the misuse of your data by corprorations, this idea of individual data ownership is morally correct.
Now we are not talking about ALL data. If you use Amazon’s services to buy something. All of the information that you create by searching, browsing and buying on the Amazon site, also belongs to them. So while I can opine on the “value” of individual data, I am certain that the legal questions around data are just beginning to be sorted out.
So with all of that in mind, let’s examine how each individual person may value the data that they can provide. Noteworthy to this discussion is that every individual has a different value function. Different people will value different things about their data. So it is vital that we appreciate that each person will price things uniquely.
However the parameter that they weigh can be summarized in a few key variables which are covered below. So lets create a list and explain each one:
- Risk of Breach — Each data item, if fallen into the wrong hands can cause harm. This is the risk of breach. This risk will be perceived differently based upon the reputation for safety of the data user, a perceived sense of associated insurance and the context of the data itself. For example, let’s consider 4 tiers of risk of breach. Tier 1 ( HARMLESS) — the contents of my dishwasher. This data might have value to someone and could not harm me if used nefariously. Tier 2 (LKELY HARMLESS)— the contents of my refrigerator. Still like to be unable to hurt me, but since people may know what I consume, one could they possibly tamper with it. Tier 3 (HARMFUL — ONLY INCONVENIENT) Examples here might include, financial breach. Where often the risk is not only yours, there is a form of insurance (bank insurance or other similar example), but it is dangerous and painful when it occurs. Tier 4 (HARMFUL — PERSONAL SAFETY) Examples here might include your exact location, your health records, access to your cybernetics and/or your genetic code.
- Risk of Privacy — How sensitive or personal do we view the data items. On this risk, I beleive that pricing is rather binary or maybe parabolic. Many data items which we can produce do not make us concerned if made public. That is, until a line is crossed, where we consider them private. My pictures, fine. My shared moments, fine. My bedroom behavior, private. So when that line is crossed, the price of the associated data rises substantially. To continue the example, a manufacturer of an everyday item, such as pots and pans, may not have to pay a privacy premium for data associated with our cooking habits. However, a manufacturer of adult toys, may have to pay a substantial premium to gain access to the bedroom behavior of a meaningful size sample of data. This is a good time to remember that these pricing mechanisms are personal, true microeconomics and everyone will value the risk of privacy differently. Even to the point where the example I just gave may be completely reversed. Bedroom behavior, no problem… but keep your eyes of of my cooking.
- Time — how easy is it to generate the data. Can I generate the data simply by existing? That data will be cheaper. Do I have to engage in a use of my time to create the data, that data will be more expensive. Would you like me to watch your commercials? more expensive. Would you like me to fill out your survey? 2 questions is cheaper than 20 questions. Time is also a function about the entire mechanism for creating, monitoring the data.
- Applicability — is the data being asked of me relevant to me. This is a question of “known” versus “unknown”. If I regularly drink a certain type of coffee, I am more likely to accept coupons, ads, sales and promotions from my coffee shop than I am from the Tea emporium around the corner. The function here is inverted, as the applicability decreases, the value of access to “me” increases from my perspective. That is not to say that it also increases for the data consumer, so with respect to applicability we have typically juxtaposed supply and demand curves. Also, if you only value data based on the supply side (what I am willing to give), then you miss out on revenue opportunities by allowing people access to your attention to “broaden your exposure”.
If the world changes to a personal data driven model, then the corporate world and the artificial intelligence world, will have to learn how to examine these key variables. The marketplace where these transactions will occur MUST be a robust mechanism for price discovery whereby many different bids and offers are being considered on a real-time basis to determine the “price/value” of data This is why I have proposed the Personal Data Exchange as a mechanism for identifying this value proposition. Exchanges are in the business of price discovery, on behalf of their listed entities, in this case, “you”.
In the end, this is the morally corrected position. For a variety of reasons it a justifiable and necessary change to a marketplace that was created largerly without your consent. Recent changes to the law, such as GDPR in Europe have begun to claw back the rights of the indidivual. But if we can get this done, it becomes a complete gamechanger. Please… get on board. Your thoughts and critiques are welcome and encouraged, ForHumanity.