Web3.0: All about Data, says Reid Hoffman

In recent interviews, Reid Hoffman, the founder and Chairman of LinkedIn, angel investor and partner at Greylock, the venture capital fund, has thrown his hat in the ring for defining web 3.0.  This term, which everyone and their dog has an opinion on, will be all about accessing, analysing and using the masses amounts of data that each and every one of us produce.

Ever since web 2.0, the collaborative net, defined by players such as blogs, Wikipedia, Facebook and Twitter, we all produce masses of data every day.  This is set to increase exponentially as the internet becomes closer and closer integrated in our everyday life, through devices such as smartphones, TV boxes, cars, fridges, etc.

At this point, Hoffman makes a useful distinction between explicit and implicit data.  Explicit data is the data we explicitly provide - e.g. I have provided information about my age, sex, job and friends on Facebook.  Up til now, much of the information we leave behind, falls in this category.

However, perhaps the most exciting opportunities originate from what Hoffman refers to as implicit data.  This is data that we do not explicitly provide, but implicitly leave behind from our actions, e.g. geo-locational data and payments information. 

As more and more of our lives become connected, this category is likely to explode in the next few years, and will create amazing business opportunities that we can already see companies positioning themselves towards, but also many opportunities that we can not yet predict.  Essentially the type of black swans that Facebook, Twitter and LinkedIn have been  over the last 5 years.

Of course there are also massive privacy issues associated with this data.  Over the last 5 years, we have all become accustomed to sharing more information that would have been conceivable before.  And, despite minor setbacks, we have generally been happy to make this trade off so long as online networks enabled us to better connect with the world around us, primarily used data that we explicitly provided and gave us a high degree of control over how the data would be used and shared.

However, with implicit data, this trade-off becomes far more complex.  Firms that are to succeed in this new paradigm must therefore develop entirely new and more powerful value to their users, while they ensure that the users' data is stored, used and shared in a responsible manner.