Data, platforms and the money machine

Dear friend,

Let me start with a question.

What were you doing when you first came to know that Cambridge Analytica, a data analytics firm, had harvested personal data of over 50 million Facebook users, in a bid to influence their decisions?

If you were like me, and many of my friends, you were on Facebook or Twitter. In all probability, you learned about the breach there—one of the many ironies of our times. Then, probably, you went to Google to dig deeper into the story. While Google seems to have escaped the kind of scrutiny that Facebook had to face in the past two weeks, its business model is not too different from Facebook’s. They give us the right to use their platform in return for our data, which they process and sell to others who are interested in our money, votes, mindshare and so on.

It is tempting to think that the whole problem with Facebook arises only from its business model. It’s a two-sided platform, with (free loading) users on one side, and the (paying) advertisers on the other. If it changes its business model into, say, a freemium model as journalist Felix Salmon suggested, it can escape some of the ethical minefields it faces today. If it charges us for the use of the platform, there is a good chance that we will be treated as customers and not as products.

Reading Charles Assisi’s piece earlier this week—Big Data in the Age of Biology—it struck me that the problem is deeper. For one, taking this data sucking/analysing engine out of a two-sided platform will not solve all problems. The problem really is with businesses trying to extract more and more money out of the customers—even when their products don’t add value. Or worse, even when their products destroy value. All the data they take from us might end up empowering them rather than us. In the pre-Big Data world, one could have argued that competition will take care of such excesses. But, in today’s world, we don’t know what the switching costs to the customers are.

At the core of these debates is the question who really owns our data, and what we really mean by owning the data. That’s the question we are all struggling to figure out. The process so far seems to be chaotic, and often turns bitter and vitriolic. At Founding Fuel, we have been trying to seek light and clarity by talking to some of the best minds who have thought deeply about it. Our Slack community (http://bit.ly/FFPrivacy) is one such initiative. We will have more conversations there in the coming months.

Do join us and let us know what your thoughts are about these defining issues of our times.

Best,

NS Ramnath

On behalf of Team Founding Fuel

Featured Stories

Big Data in the Age of Biology

[Image via Flickr]

Facebook, Google, Amazon and Apple sound old. Investors have their eyes on startups invested into healthcare and personal medicine, says Charles Assisi (Read Time: 8 mins)

How gig talent can make HR agile

[By Gerd Altmann, under Creative Commons]

HR needs to adopt gig talent first and then scale it for the organisation, says Hari Abburi (Read Time: 8 mins)

Air India divestment: Why potential suitors will line up for the Maharaja

[By Steven Byles from Singapore, Singapore (VT-ESC A320-232 Air India) (CC BY-SA 2.0), via Wikimedia Commons]

There are at least six compelling reasons for rivals to consider making a bid for India’s flag carrier, says Indrajit Gupta (Read Time: 5 mins)

What we are reading

The workplace of the future

The Economist | As artificial intelligence pushes beyond the tech industry, work could become fairer—or more oppressive.

The Industrial Revolution left psychological scars that can still be seen today

Harvard Business Review  | The dominance of a certain industry or type of work can have unexpected, long-term effects on the personality structure of regions—and these can be felt long after they change.

Globalization’s backlash is here, at just the wrong time

The New York Times | The world economy became more interconnected in the 1990s and 2000s, delivering immediate pain to rich countries, along with benefits that only now are starting to be more apparent.

From Our Archives

Enjoy the data while it lasts. It won’t for too long

[By Gerd Altmann (CC0 1.0), Via Pixabay]

Behind your back, a fierce battle is being fought between actors of all kinds over who owns you. It will end soon. But a price will have to be paid. That includes our privacy, says Charles Assisi.

The altar of bigger

[Ferran Adria’s El Bulli restaurant. Photograph by Charles Haynes under Creative Commons]

Delightful insights from mathematics and biology are at the heart of something we seem bewilderingly ignorant about: Everything has an appropriate size, say Gourav Jaswal.

Ignorance and denial are the biggest risks

[By Peter under Creative Commons]

If we can handle these two, it is easier to deal with environmental risks, says Subroto Bagchi.