#8 The Big Data business model
Often one of a number of revenue streams, selling anonymised data can provide another way to monetise your customer base
It's famously said about Facebook that its customers are the advertisers while its millions of daily users are the product.
Decoded that simply means Facebook users don't pay. Instead they provide data which is used by advertisers to target their campaigns. The advertisers, in turn, cough up handsome sums for the privilege of addressing tightly defined audience segments.
The same principles can be applied in other sectors. For instance, MyHealthPal is a consumer-focused app designed to help its users control their medical conditions, notably Parkinson's disease. And while it's free to download and use, the data generated has a value. “We ask users to donate their data to us. This data is de-identified and monetised by selling it on to scientific research institutions and organisations,” says founder Mike Barlow.
And there is an incentive. A proportion of the revenue raised is directed back to users who can donate it to a charity or research institute of their choice.
It is of course a strategy that requires a buyer for the data and any company going down this route should probably also consider parallel revenue streams. The UK-based company is currently sending data to Mount Sinai Hospital in the US and UK hospital trials are to begin soon.
Another example of a technology start-up deploying this model include fashion and beauty promotions site SalesGossip which monetises its customer base via four different revenue sources, including data mining (the others are affiliate store commissions, online advertising, and custom marketing campaigns).
And OpenSignalMaps has created a database of cell phone towers, cell phone signal strength readings, and WiFi access points around the world. Users can work out which carrier is best based on where you are at any given moment. It then crunches this data collected from users of its Android and iPhone apps to produce heat maps, while stripping out any identifying information.
This is #8 out of 10 ways to make money from your tech business idea.
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