At CoRise, we had our monthly board meeting last night and it’s always thought provoking.  We are lucky to have Jonathon Axelrod, Aleks Jakulin, and Andrew Sispoidis as our advisors – all are already accomplished entrepreneurs and they continue to keep their fingers on the pulse of emerging trends.

One of the topics we discussed was around data / privacy (which are inevitably intermingled), and the impending impact on business models.  Ironically, Nicholas Carlton of BI today published a Jeff Jarvis quote relevant to our conversation – he quoted Jeff as saying that the new No Follow agreements will make content more expensive to the consumer – you can see that article here.  I couldn’t agree more.  Let me explain.

Google taught the world that data has value – and the world reacted.  Facebook taught the world that Privacy has value – and the world reacted.  So as content or service companies think about the  evolving landscape, they can customize their offerings for their services.  For example, Company A can do a service for a client.  It can offer the service cheaply (or even for free), if the client permits Company A to see their data and there is enough value in the data for Company A.  Or, Company A could charge a fee for its service and NOT see the clients data (ie do the service / process on the client’s servers).  The great part about this is that Company A would likely price its fee so that it’s indifferent to whatever the client chooses.  The client also benefits as it can decide between a cheap fee (if its data isn’t that sensitive) or paying a larger fee to maintain privacy.

This “new” business model has been around for the ages and a simple analogy would be night clubs.  When I was younger, I would wait outside the nightclub to get in for the right to then pay a cover charge.  Yet, pretty woman were always allowed in without waiting and didn’t have to pay a cover charge.  The club saw the value of having pretty women in its club, while my value to them was …well…not worth much.

So, I expect that as the Gov’t, corporations, and consumers focus more on personal data and security, we’ll see many more business models develop, playing on whether the client minds sharing his data.  Several companies are already doing this, but I’d expect more to do the same – it’s likely the “new” business model…..

Robert Peck, CFA
President, CoRise Co