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The New Experience Economy: Activity as Currency
By Graeme Waitzkin & Laura Richardson, 07 May 2013
Whether in our client projects, our recent work on wearables, or even this year’s SXSWi Opening Party, we at frog spend a lot of time these days developing intelligent connected devices. From self-tracking equipment, to wearable computing, to ambient sensing and sensor-embedded environments, the Internet of Things was discussed more than any other subject this year at SXSWi.
Some of the best thinking on this subject was shared at a panel entitled How Self-Tracking Geeks are Shaping our Future, featuring Gary Wolf (Founder of the Quantified Self movement), Lisa Kennedy (CMO of GE healthymagination), and Sonny Vu (CEO of Misfit Wearables and creator of the world’s first iPhone connected medical device). The conversation highlighted emerging consumer wearable technology and health-related devices. As one would expect, the conversation eventually led the personal value of data generated by this equipment, but did not directly address the value of this data to the enterprise.
We all know our data has value. Why else would Google give me products, like search, Gmail, or Google Drive, to use for free? I know they are monetizing my data through advertising, but I don’t care because I get to use great products for free. Value exchange models like this abound in our digital experiences, from Google, to Facebook, to Foursquare (a company that has figured out, albeit indirectly, how to give me something tangible in return, in the form of that free slice of pizza I get from the pizza place where I am the mayor). To date, the digital experience economy has largely been a one-way economy, with those companies who attract our attention monetizing our digital activity with their ecosystem partners.
But the great equalizer to make this experience economy a true, two-way economy may be the simple sensor embedded in my clothing, car, or public space. Digital value exchanges are beginning to extend far beyond the screen of my phone or laptop. Embedded sensors will allow me to increasingly exchange my activity for currency.
Today, financial services companies and large employers are largely leading the push in this area. By putting a Snapshot device in their cars, drivers can lower their car insurance premiums with Progressive. Johnson & Johnson gives $500 to employees who will share their biometric data.
Soon, these value exchanges will not be limited to insurance companies or the like. Savvy consumer businesses will mimic online models by lowering the retail price of their sensor-embedded products in order to build up a devoted network of users. Gary Wolf hinted to the fact that companies may even pay consumers simply to learn about the patterns in their data and will explore necessary incentives to “share data coming off of wearables” as none exist today.
Let’s consider the T-shirt equivalent of Gmail, a theoretical Nike garment with embedded sensing technology. The sensors inherently increase the production cost of the shirt and it will carry an ongoing cost to Nike to track and store data over time. But Nike might consider giving a discount on that sensor-embedded shirt, if the buyer promises to wear it running everyday on the streets around town or in a crowded gym. Perhaps they would charge full price up front, but then reimburse the buyer for the shirt over time as the shirt is worn and tracked.
Gary Wolf actually called out Nike specifically at SXSWi, calling Fuelpoints, Nike’s digital metric for health, an “arbitrary” unit of measure. We agree that Fuelpoints may be arbitrary and Wolf is right to call out the great deficiency of today’s wearable devices streaming all their data to isolated platforms. But from a strategic perspective, has Nike established a model in Fuelpoints to create its own digital activity currency? We may reach a point someday where we can exchange Fuelpoints for additional products, or even trade them in for cash.
Recently, frog debuted a series of wearable technology concepts. One of these wearables, the Kinetik, could take personal reward a step further by integrating the energy we generate daily to power our personal devices with the option to further pool generated energy as a community.
Would the US be known as the most obese country if Americans got paid for our personal energy creation? We know that we would be creating energy (and burning it) whenever we could to make extra money. Who wouldn’t? This idea might extend to the connected home. What’s missing today is action and consequence. While we get a bill at the end of the month, it’s not clear when we make (or save) money in this old model. Connected home companies could start partnering with power providers to engage users in making money in real time.
As Sonny Vu indicates, the influences of the Internet of Things may not be as overt and explicit as the value exchanges bartered above. Instead, it may be more subtle cues that our body will learn to respond to automatically. Vu talked about wearable devices delivering “”eal time feedback at the edge of your consciousness to influence behavior change”. This leads us to consider the interaction between wearable devices and sensor-embedded environments. As we move about our world, the experience economy of the future could issue continuous invitations for value exchanges. Through the use of phatic technology, for example, a wearable such as the highly anticipated iWatch (better described as iWearable), could be the mediator of the value exchange. As you pass by an enabled retail environment, for example, a subtle phatic cue will tell you that an offer is waiting inside the store. Personal data won’t be mined. Instead, it will be our greatest consumer power, as we choose to accept the offer of a business relationship or not.
Some of Lisa Kennedy’s comments suggest that this model may be farther out than we think, saying, “A lot of people underestimate the value of information… Everything comes down to incentives,” and little is being done today to incentivize. But as the Internet of Things is becoming more prevalent on our bodies and in the spaces we occupy, tangible financial incentives will invariably follow and we cannot help but believe that a viable activity economy may be in our near future.
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