Social Graph Banking

This weekend I found a gem highlighted by Abnormal Returns. It was Big Think‘s piece: Is Personal Data the Next Killer App for the Web?  The answer to me, is a clear & resounding yes.

So, while the answer is clear to me– what is not clear to anyone is what exactly it will look like. Right now our personal data is a bunch of pretty pictures, like this…

My Social Graph at LinkedIn

And interesting statistics, like this:

STAT 1: 53% of people on Twitter recommend companies and/or products in their Tweets, with 48% of them delivering on their intention to buy the product. (ROI Research for Performance, June 2010)

STAT 2: The average consumer mentions specific brands over 90 times per week in conversations with friends, family, and co-workers. (Keller Fay, WOMMA, 2010)

STAT 3: Consumer reviews are significantly more trusted — nearly 12 times more — than descriptions that come from manufacturers, according to a survey of US mom Internet users by online video review site EXPO. (eMarketer, February 2010)

STAT 4: According to one estimate, by 2020 the global volume of digital data will increase more than 40-fold. (IDC. “The Digital Universe Decade”, May 2010)

So, it looks really cool & sounds pretty mind blowing, right? Even bigger in my mind is the fact that the word Social Graph didn’t really exist BFB, circa 2007. {that’s: Before FaceBook}

For those of you that don’t know, your social graph is basically the science behind mapping your connections. The LinkedIn map (above) was a fascinating exercise because I could see people who served as gateways to multiple clusters of relationships. Amazingly I learned that 3 or 4 real people, that I personally know (not people who just link to everyone) were huge influencers of my entire LinkedIn world. And I honestly didn’t know this information before I’d done the mapping. Oh, and it took two mouse clicks.

But the ramifications of this power aren’t just limited to my social circle– crowdsourced (also known as: hive mind) opinions are becoming hugely relevant too. Example: the other day our rental property needed an electrician– my wife handles these things– here’s the order in which she looked for an electrician: she emailed her friends, reached out to her online mommy friends & Facebook friends, then she searched Yelp. Notice, she did not go to the Yellow Pages or even search Google. And get this– the #1 Yelp local electrician we opted to use (with 20 thorough, thoughtful positive reviews), did the job for $100 dollars vs. the electrician a friend recommended who wanted to charge $7300. It’s a brave new world indeed.

Here’s the thing– this stuff is all new, which means no one really knows what they are doing– we are all making this up as we go. What I do know, and everyone else sees too–it’s going to result in a huge shift in consumer economics. And with near field radio communication on the horizon, we are about to remove even more friction from consumer transactions.

Things are about to get really interesting.

Now, look at this graph– this is you — online. And these are the areas of your life about to be monetized. Now imagine a world so connected that money moves in & out of products and services just because of relational/online recommendations, all tracked, and money/credit divvyed up according to one’s influence on the purchase. Weird, right? You are starting to see this movement begin with companies like Klout.

The world is about to become a giant affiliate.

Some would look at this development & say it’s petrifying. I understand. And in the wrong hands damage is going to be done, no question. But with the proper controls: smart, transparent permission/sharing/disclosure, trustworthy security, etc.– I think this is absolutely exciting from an economics standpoint. A giant shift is occurring. Optimistically, the middle class is going to be positively revalued as a result. Why do you think Google wants to be a player in social? Revolutionary is probably an accurate descriptor of this movement.

To me, the biggest opportunity for someone to monetize my needs online is going to be an online fiduciary. None of these Dropbox shenanigans though. I want my data super secure– a swiss bank for my online data.

This is going to take someone who truly cares about getting it right for the consumer- and someone with style, please — I can’t handle a 21st century dominated by Microsoft & the investment banks of yore. Or a super sweaty Zuckerberg.

You want to learn more about the brave new world being explored?

This is your guidePersonal Data: The Emergence of a New Asset Class – World Economic Forum


Also Relevant:

The Birth of A Word – I heart Wall Street

Wall Street 2.0: Trust Me – I heart Wall Street

The Joneses – Netflix


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