The car in your driveway and the smartphone in your pocket. Both are transformative technologies, with wide ranging consequences for individuals, businesses and governments alike. The widespread adoption of each has and will continue to have lasting impact on the structure of the world around us and our daily lives. But while high level comparisons are easy to draw, the similarities continue to a surprisingly granular level. This discussion will focus on one in particular: exhaust.
Just as the cars we drive leave behind them a trail of exhaust, so too do the internet connected devices we use everyday. In this case, though, we’re no longer talking about carbon, sulfur and other chemicals — we’re talking about data.
‘Data exhaust’ is the information created as a byproduct of digital activities. The tweet, the blog, the web application — all of those are the meat of our digital activity, but along with them comes a trail of information about our behaviors online. And while more than a century has yielded no productive use for the byproduct of the combustion engine, companies are actively taking advantage of digital exhaust to create positive value.
One such company is Slice (acquired by Rakuten). The byproduct in this case is more tangible than the cookies, log files and other often-hidden embodiments of data exhaust: email receipts. A user grants Slice permission to monitor his or her email inbox for e-receipts from online retailers. When Slice finds a receipt, it pulls tracking numbers, order numbers, item descriptions and other information onto its online platform. In exchange for this access, Slice provides to users automated shipping updates, price monitoring, recall notices and spend analytics, all for free.
With access to actual e-receipts, Slice gains a valuable cross-retailer view of shopper behavior. Unlike other services with access to credit card information (think Personal Financial Management applications like Mint, or even credit card companies themselves), Slice gets this view down to the item level. So, not only can Slice then tell retailers where else their customers shop and how they divide their spend, Slice can give them insight line by line to help them understand and market to their customers more effectively.
When seeking to create value with ‘data exhaust’, a critical decision lies in how to collect it. I propose three primary approaches: 1) consuming your own proprietary exhaust, 2) consuming publicly-available exhaust, 3) consuming someone else’s proprietary exhaust. Slice has chosen option #3, and as a result, they must spend considerable resources creating consumer-facing features to entice users to share their data. To offer contrast, BuiltWith has opted for #2, using publicly-available information. BuiltWith analyzes websites to expose the technologies used to run them. For example, using BuiltWith to look at Slice’s website tells us that it is hosted on Amazon, uses Optimizely for A/B testing, Segment to consolidate usage statistics, and Sendgrid for email infrastructure, among others. By collecting the data exhaust generated by the website and its underlying services, BuiltWith can create a picture of technology adoption across the web, particularly useful for example for companies and investors trying to understand trends in technology procurement.
BuiltWith can focus on its paying customers without needing to develop features for companies in order to access to its bread-and-butter data set; however, this also means that the data itself is much less of a competitive barrier for the company. BuiltWith must out-analyze other potential competitors with equal access to its data set, while Slice can instead compete on the data set itself. Of course, this means competing with other e-receipt aggregators for access to a consumer’s inbox.