Data Exhaust

One of the most powerful things I have learned over the past year is the immense amount of data that comes out of using a computer system, specifically some form an online web based experience. At Union Square Ventures, we refer to this as data exhaust, or sometimes called digital exhaust, because it is the excess valuable information that is left in the wake of using a service. The best services capture this information in an elegant and effortless way, without any barriers or friction.

This remains one of the core investment thesis ideas in my mind when I look at a company that lives on the web. In an inverse relationship to environmental exhaust where usually the more left behind the worse the system, the web works in just the opposite way. The more data left behind, that can be harvested, the better the underlying network. This process of collection can be done via a lazy login, a deliberate subscription, or a federated login system – in each case allowing the underlying infrastructure you are traveling across (or consuming) the ability to retain this data.

The data retained from data exhaust can be use for many different things. The first and most obvious is to make your experience better. Your profile and activities give off information that can be used and processed with a system, making your experience better the next time you arrive. This presents a sparse data problem for new users and new systems, but once the data asset is in place you have more of an incentive to return.

This dynamic behind a new web service shows the importance of allowing users to traverse across an already present data asset.

Many services do this well today, while others built up this asset of data over time. Being a new user on a service is tough, but the opportunity to grab the data exhaust of each of those new users to turn around and use of for the betterment of the system and other users is great.

Federated login systems such as Facebook Connect and Google Connect enable you to bring your data with you, something that I think will become common place over time. As these paradigms solidify in peoples minds, and the value of such activity becomes apparent I think you will see demand increase to bring a customized set of decisions, opinions, and “personality” with you whenever you sign up for a new web service.

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