Boiling a Billion Frogs

Frog-in-Boiling-Water.jpg

Tracing the arc of Facebook’s user sharing model is to identify the biggest case of frog boiling in history. Contrast Facebook’s origins as a dating site limited to students attending a particular college to an exhibitionist’s dream syndicating every detail of a life across of 1000+ friend networks and potentially many more followers.

The question for users is: what is the quid pro quo? What value am I gaining in exchange for my data. Is it a fair swap or a bait and switch? What do you think? Message me on twitter with your thoughts

In my view, the data-by product created by users is enormously valuable and fuel for innovation. Facebook’s billions in revenue is the most direct proof and the ecosystems built around the data stream are at least as large. Max Levchin’s newest company Affirm, Kaggle, Lending Club, Lyft and others use social signals to build credit and trust signals for potentially billions of dollars worth of transactions.

Pointing to the revenue of these companies as examples of corporate raiding of personal data is flawed. Consumers benefit from new forms of credit and lending, market places with less friction and increased trust on the web.

All web services evolve, their value propositions will change and the use of user data will morph to rise to the demands of the users and customers. The challenges in privacy occur when a web service’s users and customers are different, eg the case of users and advertisers. We’re still figuring out to to properly handle those potential conflicts. It’s a work in progress.

For a compelling counterpoint, read Juile Cohen’s paper in Harvard Law Review called “What Privacy Is For?”. Cohen argues privacy is a fundamental right of a functioning democratic society and today because of our love affair with Big Data and innovation, we have cast aside any regulation or oversight of privacy. Nor do we have the tools to properly understand the type and extent of data usage.

This privacy/innovation debate is fascinating because it exists at the intersection politics, ethics, innovation and societal values. No one wants to be a frog, slowly boiled, who realizes one day all privacy is gone. But the value created by Big Data is unquestionable. There’s the rub.

Published 2013-02-27 in


I am partner at Redpoint. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 20,000 others receiving these blog posts by email.

Read this next: