Imagine for a moment you’re a simple serf working a field somewhere in medieval Europe. You’re toiling away for the right to exist on the land you work every day. Ugh. Life sucks.
You look up from your back-breaking labor and you see a bunch of guys on horses ride by your land. You watch them come and go and note a few interesting details in your mind as you stretch your back and scratch your butt. Then you get back to work.
A few days later a wealthy looking man wearing impressive armor, strapped with a huge sword, on a massive horse, rides up to your home with a posse of intimidating thugs. He asks you, “Did you see a bunch of guys on horses ride through here the other day? And if so, what did they look like?”
You definitely have to answer him. You could say, you’re highly motivated to engage.
You tell him, “Oh yeah, I did see some guys!”
You wrack your brain for any detail that might be useful.
“There were about 20 of them. About 8 had armor and the rest wore clothes like mine. But better.”
“Shut up peasant! No one cares about your stupid clothes,” the wealthy man says, and rides off.
The wealthy man rides back to the King and says, “I have uncovered a plot to betray the crown!”
The King acts on this information, the plot is foiled, and the already wealthy man is heaped with more wealth and power. Like a Dukedom or something.
In the Data Economy, that’s what we call a really good deal. Or, a favorable data exchange. But notice, the serf didn’t get anything.
How the Data Economy Works
The Data Economy has existed as long as humans have existed. The Data Economy is the economy around the exchange of information (data). Value in the Data Economy is a byproduct of favorable data exchanges–good deals.
The internet has democratized access to the Data Economy so that anyone who can engineer a virtual context that results in a favorable data exchange can accumulate outsized amounts of wealth and power relative to the resources they’ve invested.
On the internet, attention and clicks on ads are exchanged for cash. An email is exchanged for a lead magnet. A commission is rewarded for providing a product endorsement that converts into a sale. A one-time or recurring fee is exchanged for data we deem more valuable than the cost of access.
Sure, there’s cash involved, but the most accurate way to describe the Data Economy is as a barter system.
In each example above, both parties believe they’ve struck a good deal and “value” is had by both. However, it is always the one who knows best what to do with that data exchange next, that profits the most. And that is always the person or company who knows how to increase the value of the data they’ve been given.
In this data driven economy, the people and companies that seem to be doing the best are the ones who find the most effective context in which to offer their data to others or to put their data into action.
For example, if I were to offer you a resource in a container right now–say, a bottle of water–whether that has any value to you would depend on the situation (the context).
In your home where you have access to whatever you want to drink, there’s probably nothing I could do to convince you to pay me any amount of money for the bottle of water I have. However, that doesn’t mean my product (resource + container) doesn’t have great value.
Think for a second about the most you’ve ever paid for a bottle of water. For me, it’s probably around $10. And it happened within one of a few contexts: a sporting event, a theme park, or a concert.
Same product, different context, more value.
On the one hand, the only reason my bottle of water example works is because that’s how business has always worked. But one of the effects on business in the information age is that the most valuable containers always have a data layer where the value of that resource has the potential to increase exponentially (in the Data Economy) compared to businesses, people, products, etc. who are stuck primarily IRL.
Sort of like how The Big Short explained the speculative aspect of the housing market called Synthetic CDOs:
So in practical terms, how does all this work?
A person or company begins by taking what they know (initial data investment, if you will) and they create a container for it. This container allows them to optimize the context in which others interact with that data for maximum value–like making sure that no matter what deal you’re trying to make, you’re the guy with water at the theme park. And similarly to speculative trading or betting, there’s a universe of additional value beyond the initial deal to be had, if you know what to do after it.
The Facebook Example of Data Economy Domination
Okay, let’s peel away some of the abstraction here with an example we should all be familiar with:
Mark Zuckerberg had–possibly stole?–an idea (initial data investment) about how to create a really engaging website (container). He created Facebook.
To access the engaging experience he designed, we have to sign up for a free account. We have to trade Mark a few pieces of information almost anyone in the world could figure out if they wanted to anyways (our name, email, etc.) to access this experience. That’s a deal billions of people have decided was fair.
However, it’s what happens after this initial data exchange that makes all of the difference.
Once I sign up, my primary objective is to engage. I do this by sharing more and more data about myself and completing actions that help me express myself to others on Mark’s platform.
This is not by accident. On Facebook’s end, their primary objective is to add layers of context to my account. That context is what makes the initial data exchange I made with them more valuable. To maximize that value they have constructed a container (or more accurately in Facebook’s case today, a network of containers we’ll call an ecosystem) in which they can refine their value optimization of my data indefinitely as long as I stay engaged.
In broad strokes, here’s how that works:
Design an onboarding process (another container) that captures more data with the promise that it will make the engagement I’m interested in that much better.
Then automatically connect me with as many people as possible, all the while providing interactions that generate meta-data that can be attached to all of our accounts simultaneously.
The longer I’m on the platform the more valuable I am to Facebook. The more accurate meta-data Facebook can add to my initial profile data, the more ways they can chop it up and sell it to interested parties (their ads platform being yet another container).
They are also able to manipulate behavior on their platform as a result of the deep insights they now own about every single user. Which they use to drive more of the behavior they’ve determined to be most profitable.
The entire apparatus of Facebook could accurately be described as a series of data containers designed to create as many favorable data exchange feedback loops as possible–for Facebook.
I’ll be publishing more content about “favorable data exchanges” and “favorable data exchange feedback loops” later, however I believe Facebook is a good example of a type of favorable data exchange I call a “negative data exchange feedback loop.”
This is a data exchange in which the container is designed to manipulate humans into making a near constant stream of terrible data deals. Deals they don’t even know they’ve made. Deals in which the platform is always getting the maximum value from those who exist on “their land” and sharing as little value in return as possible.
In Facebook’s case, they seem to do the bare minimum required in order to motivate their users to generate more data they can monetize–end of story. Even to the point of harming their users. It’s a version of something I’ve come to call Data Driven Serfdom.
How Data Driven Serfdom Works
Data Driven Serfdom occurs any time a person is either required or manipulated into virtually existing on someone else’s platform and they are not given a fair stake in the value generated from their data.
Let’s think back to our rich medieval asshole from earlier. Would it have killed him to give that serf even a modest 5% profit share on the Dukedom he won with a couple sentences of data? No, of course not. But historically, rich and powerful assholes are not good at sharing. Even if that would actually help them and the world in the long run. See: every revolution ever.
So excuse me if I don’t wait around on Mark Zuckerberg or Jeff Bezos to do the right thing before attempting to change my situation.
What I’m Doing to Resist Data Economy Serfdom
The more I think about this issue the more I think we need a data economy revolution. But there isn’t really a good model to refer to. Seize the means of production? I’m not sure I know what that means in this instance.
“Seize the data!” on the other hand, that makes a lot of sense to me.
Seizing My Personal Data
As a professional content marketer, I’m keenly aware of the value of specific types of data online. My entire job consists of arranging data into containers that at the end of the day convert attention into money for my employer.
I’ve never been interested in exploiting this knowledge for outsized personal gain in the form of excessive wealth, celebrity, or anything like that. My top priority has been to earn enough money doing what I do to lead a personally meaningful life. Part of that being that I use what I know in a way that makes me feel good about myself as a person and not to take advantage of people.
If you’ve been following along with my personal updates, then you know that in my last post I recapped the challenges my family and I have been through in the past couple years. I described how I’ve felt ground down by the state of the world and my powerlessness inside it. The strain of current events and current economic realities were affecting me and my loved ones in ways I’d never imaged before.
I was frustrated and bitter that I’ve been working my ass off to adapt to the insanity of the world today, do good work at my job, be a good partner to my wife, take care of our responsibilities, and try to have a fulfilling personal existence too. Yet having that goal elude me year after year due to circumstances and powers far beyond me–like a global pandemic, another recession, political gridlock, etc.
When I began to think about what I could do–what was and is in my power–I realized the solution might have been staring me in the face for years.
Personal Website = Personal Platform
In the Data Economy, platform is power. Power is used to leverage better deals in the data economy as a matter of every day bargaining–most of it automated and disguised as casual social interactions–reading an article, sharing a video, “loving” a comment, etc. Only right now, the only people benefitting from the data I create, generate, manage, and add context to are the platforms who’ve positioned themselves to do so. Therefore, if I want a stake in the value of my own data, I need to create a platform that captures at least some of the value my data is generating for others. And then leverage up from there.
Beginning a Tactical Retreat from Platforms I Don’t Own or Have a Personal Stake In
When it comes to social media or any data platform/ecosystem I interact with, I’ve begun to ask myself: how can I re-claim as much of the value I’m generating here as possible? If that’s not possible, how can I exit effectively? How can those platforms build my platform? Is there a balance to be found in which the data-value-exchange is actually in my favor? We’ll see!
How I’m Empowering Others to Resist their own Data Economy Serfdom
There’s a lot of experimentation and exploration going on here, but there’s also a lot I can do right now that will have instant value for both myself and others. I can share what I already know!
Starting with regular monthly updates on something I’m calling “data gardening.” My method of cultivating the value of my own data.
Would You like to Help Me?
If this whole Data Economy stuff is really striking a chord with you, I want to hear about it. More than that, I’d love to find a way we can work together to empower each other within the Data Economy. It seems to me that, when the state of the Data Economy is such that outsized value can be generated so easily, finding win-win relationships with collaborators you want to work with should be the name of the game. So let’s do it!
Stay Tuned, There’s a LOT More to Come!
It was roughly a month between my last blog post and this one. However, things are picking up steam behind the scenes here and I’m lining up a lot more content for publication. I hope you’ll come along for the ride! In the meantime, if this post has sparked any thoughts you’d like to share please do so in the comments below. Until next time!