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Companies get smart on digital data

Marketplace Staff Nov 18, 2009

Companies get smart on digital data

Marketplace Staff Nov 18, 2009


Kai Ryssdal: The data trail that we create every day is only growing. Every time we go online, every time we use our cell phones, companies log our preferences. They make suggestions, and they remember what we do. Even though a lot of consumers have gotten used to that, a lot of businesses are still trying to figure out how to use our data to the best effect. One of the first companies to realize the social potential of consumer data was Amazon.com. And Andreas Weigend used to be the chief scientist there. Welcome to the program.

Andreas Weigend: Good to be here.

Ryssdal: This thing called the social data revolution, what does that mean really?

WEIGEND: Social data for me means sharing data. Sharing data means, when you think about Facebook, sharing data with your friends. When you think about Twitter, sharing data with the world.

Ryssdal: We all share data, and that’s fine, and we’re good with that, but your thesis here is that what’s happening is companies are getting smarter about how they use it, aren’t they?

WEIGEND: Yes, I think that we see a split in companies. That those companies, which genuinely embrace what the users can do for them — Amazon.com as an example, wish lists where you can actually recommend stuff to your friends. Facebook is a clear example, all these platforms. Versus those companies which try to define themselves as traditional companies. Unfortunately many airlines fall into that category, many banks fall into that category, and as a new generation in the social-data revolution draws up, the expectation towards the airline and towards the bank is precisely the same as the expectation towards Amazon or other good companies.

Ryssdal: Isn’t supposed to be about, though, not what users can do for the company but what the company can do for the users?

WEIGEND: No, I think it’s what users can do for the company because ultimately what users do for the company, they do for themselves. So if I tell Virgin America what kind of people I like to chat with — maybe implicitly by chatting them up on the flight between here and San Francisco — then they can do something for me by chance having that nice person sit next to me next time I take that flight.

Ryssdal: You actually, there’s a quote of yours that I read as I was preparing for this talk where you talk about this thing called explicit data creation. I mean that’s what these companies are trying to do, right?

WEIGEND: Yes, so implicit means that you sniff the digital exhaust, that you go behind them…traces. Explicit means that you create incentives for users to share stuff with you. And why do they do this? Well, on the surface because they want to get some value out of it. Maybe they want to get a camera which fits their needs better, or credit card that suits them more. Deep down, however, I think it is the need for belonging, for self-expression.

Ryssdal: Is there an element of this that is vaguely creepy, vaguely Big Brotherish?

WEIGEND: It is your choice what data about yourself you’re revealing. So as we move from the implicit data collection to a much larger percentage of what you create being explicit data, you are more in control than you’ve ever been of the bits that you generate. I asked my students at my Stanford course last quarter what was the most interesting experience you had on any social-networking site, and the answer was the fact that we can connect with anybody who we ever met in our life. So those were grad students at Stanford. If you think about people 10 years younger, in their early teens, they would say, what are you talking about, has it ever been different?

Ryssdal: Andreas Weigend is the former chief scientist at Amazon.com. He teaches data mining at Stanford University. Thanks so much for coming in.

WEIGEND: Thank you.

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