In recent years “Data is the new oil” has become a frequently used phrase in tech and investor circles to describe the incredible rise in the importance of data for today’s economy. Some of the world’s most valuable tech companies are built on tremendous data network effects and access to unique data: Google, Facebook, Amazon, etc.
For this reason, it should come as no surprise that many entrepreneurs are thinking about how to democratize access to data. This is partly because they believe that an individual’s data should belong to themselves, and partly because there might be a big business in this.
Previous attempts to democratize access to data have been rather unsuccessful. There have been attempts to build platforms for personal health data or exchanges for advertising data to compete with the big networks like Google or Facebook (e.g. BlueKai).
But to date, nothing has really scaled. Why? There can be too much friction – it’s not easy for consumers and enterprises to provide data into the network. There can be a lack of trust, particularly with healthcare data – what happens with my data and who will have access to it? And then, there haven’t been compelling financial and non-financial incentives to participate.
Over the past year, there has been renewed energy among entrepreneurs to figure out this problem, partly because of the promises of the blockchain. While using the blockchain to manage data networks might initially create even more friction, it can help address privacy concerns. It can also provide a potentially strong financial incentive as participants can earn tokens in the underlying network that appreciate over time as the data network grows and becomes more valuable.
It will be truly interesting to watch this space over the next few years and see how things play out. Will it be vertical (e.g. a platform focused just on genetic data) or horizontal approaches? Will exchanges be bootstrapped through data from individual consumers or rather large data sets from enterprises? What will be the financial or non-financial incentives to encourage participation?
If you are working on such a project, please ping Angela or myself – we’d love to hear from you.