June 5, 2012

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I was interviewed for a story recently. (It’s still in the mill.) In the correspondence that followed, the reporter asked me to clarify a statement: “that the idea of selling your data is nuts.” I didn’t remember exactly what I said, so I responded,

I think what I meant was this:

1) The use value of personal data so far exceeds its sale value that it’s insane to compare the two.

Especially because …

2) There never has been a market for selling personal data, and to create one now, just because marketers are sneakily getting that data for free, doesn’t mean there should be one.

Especially because …

3) The sums paid by marketers for personal data are actually tiny on a per-person basis.

4) Selling one’s personal data amounts to marketing exposure of one’s self. It’s like stripping, only less sexy. And for a lot less money.

And added a pointer to For personal data, use value beats sale value.

In When bubbles burst…, Dave writes,

When any hamster-based startup can raise $50 million on a $1 billion market cap, there’s not much market for new ideas. Why bother, when the same-old-stuff can make you rich. But when the bubble fades, it’s time to get creative. Because techwill reboot. The question is, what’s the next wave.

I followed the link to FACEBOOK FALLOUT: Y Combinator’s Paul Graham Just Emailed Portfolio Companies Warning Of ‘Bad Times’ In Silicon Valley, in which Nicholas Carlson begins,

Facebook has flopped on the public markets, and now we have vivid evidence of how badly Silicon Valley is reeling in the fallout.
Paul Graham, cofounder of Silicon Valley’s most important startup incubator, Y Combinator, has sent an email to portfolio companies warning them “bad times” may be ahead.

He warns: “The bad performance of the Facebook IPO will hurt the funding market for earlier stage startups.

“No one knows yet how much. Possibly only a little. Possibly a lot, if it becomes a vicious circle.”

Among the comments is this one:

Adam Lavine:

One dinner with a dour VC does not a Silicon Valley liquidity crisis make.

With that said: would be nice for all of these startups to find CUSTOMERS willing to PAY for their services. The fact that startups that have “easy money built into their models” is an obvious bubble sign in itself.

To which I replied,

@Adam Lavine:

Exactly.The tightening of VC sphincters is an issue, but it’s a lesser one than the paucity of VC-funded business models that make companies accountable to users as customers.

Facebook, Google and Twitter have consumers and customers that are different populations. Users are the consumers, and advertisers are the customers. This does work as a business: for commercial broadcasting it has worked for the duration. But it works at the cost of having minimized accountability to the millions of individuals who use the service but pay nothing for it. Ever tried to get personal service from Google or Facebook? Good luck with that.

Our dependency on Google alone today verges on the absolute. Facebook envies operating Google-grade user containment systems (e.g. Gmail, Google docs, etc.) on the same scale. But neither company is financially accountable to their users (only to their advertisers and stockholders), and neither have worthy competitors, and that’s not good for the markets they contain either.

The whole ad-supported commercial Web we have today is a collection of monocultural silos, each of which is a bubble in itself. (Think of every giant silo as a single point of failure and therefore a giant bubble.)

Another angle: every company deals with two markets — one for its goods and services, and one for itself. In Silicon Valley the latter has overrun the former, time and again. Now is no exception.

Bonus link: http://www.linuxjournal.com/magazine/eof-google-exposure

Just wanted to share that here, and not just there.

The hard drive is crapping out on my main laptop. I’m backed up, so that much is cool. Installing a Seagate Momentus XT 750 GB drive later today. We’ll see how it goes.

[Later...] Lot of dependencies and such to clean up, but performance-wise, it’s like a new computer.