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The Challenge
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The
Challenge

Every move we make on the internet creates data. And each day we create more: in fact, about 90% of all data was created within the last two years.

But data is not just increasing exponentially in terms of quantity, but also in terms of value. In fact, data is now already the fourth largest resource on the planet with roughly $260 billion being spent on it each year. By 2022, it is expected to be the world’s most valuable resource.

The reason for the exponential increase of data is its fundamental importance to companies. In our online-first economy, data serves as the fuel for firms’ operations: it enables firms to understand their customers’ needs and allows them to build blockbuster products rather than waste billions on failed product releases.

But even though we create vast volumes of data every day, and it is being sold for hundreds of billions each year, we don't seem to own it. Instead, firms called Data Brokers scrape vasts amounts of our data and sell it without our consent. Data creators are entirely left out of the process: we don't now who is sourcing our data, what data they are sourcing, who they sell our data to and for what purpose. Most notably, we do not receive any part of the profits Data Brokers make by selling our data. By 2022, Data Brokers are expected to sell data worth $10,100 per American internet user per year, essentially absorbing around 19.2% of US household income.

The current data brokerage model also poses a severe risk for companies that rely on the data that they purchase: Data Brokers sell data that is either publicly available or licensed to them via third party agreements. On Facebook this data constitutes only around 7% of all data and encompasses largely demographic information. This Quality Problem leads to the supplied data sets lacking critical dimensions of information, thus leaving companies with insights that are highly generic and inaccurate.

Furthermore, data production by one single user is highly fragmented across multiple different platforms. However, there are no standardized identifiers that allow Data Brokers to link data from two separate sources to one specific user profile. As a result, Data Brokers employ probabilistic models to approximate the likelihood of data points belonging to a given user. These highly fallible models lead to systematic mischaracterizations of target audiences, inaccurate ad delivery, and billions of dollars of impression wastage.

But there is a way to fix the problems that plague this sector. And the solution is simple and beautiful: Put people in charge of their own data and empower them to control who they want to share their data with and for what purpose, and ultimately to reclaim the profits made with their data.

Powerful Data Exchange

Second, there is no compensation. Users are not included in the value chain and financially reimbursed for the data they created.

It also poses a severe risk for companies that rely on the data that they purchase: Data Brokers sell data that is either publicly available or licensed to them via third party agreements. On Facebook this data constitutes only around 19% of all data and encompasses largely demographic information. This Quality Problem leads to the supplied data sets lacking critical dimensions of information, thus leaving companies with insights that are highly generic and inaccurate.

Furthermore, data production by one single user is highly fragmented across multiple different platforms. However, there are no standardized identifiers that allow Data Brokers to link data from two separate sources to one specific user profile. As a result, Data Brokers employ probabilistic models to approximate the likelihood of data points belonging to a given user. These highly fallible models lead to systematic mischaracterizations of target audiences, inaccurate ad delivery, and millions of dollars of impression wastage.

But there is a way to fix the problems that plague this sector. And the solution is simple and beautiful: Put people in charge of their own data and empower them to control who they want to share their data with and for what purpose, and ultimately to reclaim the profits made with their data.