Data Startups and the future
For Techstars Paris, I’ve been looking for amazing startups who focus on the data-driven transformation of entire industries, to join the second class this year.
In the last months, I spent a lot of time talking to startups using data in their products and services with a different variety of technologies to process it, and I have some thoughts about it that I want to share.
After several meetings with companies from France, Spain, USA, Eastern Europe, Italy, México… It came to my mind that the future of startups working with data will fall on three things:
- How quick would the startup be able to create a massive amount of relevant information?
- How insightful and fast will the reports be created after analyzing all the information?
- How is the company disclosing the use of data and how are they protecting it?
Most of the startups I talked to, will follow the business model in where the offer is “free” services/ products in exchange for users’ data. The expectations are set in to get a massive database, that will turn in a highly relevant analysis, made with fancy, techy tools to later be for sale.
But, how data is obtained and how often, is structural in any data-driven startup since the objective is to create a critic amount of metrics and constant reporting at any cost, to keep clients happy. Data has an expiration date, which means it needs to be captured frequently to get the new, refreshing, updated insights and by consequence be ahead of the competition.
Time is insanely relevant.
Following that thought, the user gives away data in exchange for “free’ services/products, but this exchange happens not only when the user checks the option “Yes, I accept the terms and agreements” but anytime there is an active account (contract).
When users are accepting the contract, they are not only providing information but also granting permission to be stalked and analyzed by any movement users do at any time.
Also, how far can companies go to get data? In a lot of startups, data collection processes include access to photo galleries, camera, microphone and a ton of other features far beyond from name, mail and birthday.
Most of the time the users are not even aware of being monitored so closely, less understand the profundity. So then, how is the company disclosing the matter to the final user?
Collecting data seemed to be a “secret mission” that is now turning into an open conversation due to the General Data Protection Regulation (GDPR), at least now users are aware that someone is handling their data, but still feels very unclear on the details.
The responsibility falls now into the users, on how much they actually care about their information to go through the current agreements and read all the text wrote in tiny letters. Let’s face it, in 2018 that is not enough disclosure to actually understand the price paid for the “free” services.
I truly believe that the most successful startups on the field, will be open and really transparent about what, how, why, how much, and how often they are getting data, not only because they are trying to be compliant with regulations such as GDPR in Europe, but because they want to communicate the advantages and disadvantages of either hyper-personalization, curated services, curated advertising, or any other benefit result from gathering data. Finally, give the option to the users of paying, with money, for the services and products.
I’m very interested to see the business models for data-driven startups in the coming months, considering not only the ethical choice but the creativity to obtain all the information they need, which is a whole other topic.