Thinking Through How We Handle The Internet of Things Data Exhaust, And Responsible API Monetization, With Carvoyant

I'm very fortunate to be the API Evangelist, as I get to spend my days discussing, some very lofty ideas, with extremely smart and entrepreneurial folks from across many different business sectors. An ongoing conversation I have going on with Bret Tobey (@batobey), the CEO of Carvoyant, is around the big data generated around the Internet of Things. Many companies that I engage with are very closed about their big data operations, where Carvoyant is the opposite, they want to openly discuss, and figure it out as a community, out in the open--something I fully support.

In reality, the Internet of Things (IoT) is less about devices, than it is about the data that is produced. If someone is exclusively focusing on the device as part of their pitch, it is mostly likely they are trying to distract you from the data being generated, because they are looking to monetize the IoT data exhaust for themselves. Carvoyant is keen on discussing the realities of IoT data exhaust, and not just from Internet connected automobile perspective, but also the wider world of Internet connected devices. If you want to join in the discussion, of course you can comment on this blog, and via Twitter, but you can also come to Gluecon in May, where 3Scale, API Evangelist, and Carvoyant will be conducting an IoT big data workshop, on this topic.

If you aren't familiar with Carvoyant, they are an API-driven device that you can connect to your vehicle, if it was manufactured after 1996, and access the volumes of data being produced each day. Carvoyant's tag line says "Your Car, Your Data, Your API" -- I like that. This is why I enjoy talking through their strategy, because they see the world of APIs, connected devices, and big data the way I do. Sure there is lots of opportunity for platforms, and developers to make money in all of this, but if there is user generated content and data involved, the end-users should also have a stake in the action--I do not care how good your business idea is. 

Carvoyant does a great job of acknowledging that the car is center to our existence, and the data generated around our vehicles is potentially very valuable, but it is also a very personal thing, even when anonymized. Here is how they put it:

Connected car data tells the repair industry when a vehicle needs service – the moment it happens.  Connected car data tells an insurer how a driver actually drives and if they are eligible for a better priced policy.  Connected car data tells gas stations if a vehicle is low on gas.  If a vehicle has not been to the grocery store for a while, than it may be time to make an offer.

The difference in this conversation, is Carvoyant isn't just making this pitch to investors, the automobile industry, and developers, they are making it to the automobile owners as well. They are working to establish best practices for gathering, accessing, storing, and making sense of Internet of Things data exhaust, in a way that keeps the end-users interests in mind. Every platform should think this way. There is too much exploitation going on around user-generated data, and Carvoyants vision is important.

Monetization Via Classic Affiliate Program
When it comes to figuring out a healthy monetization strategy for the Carvoyant platform, and resulting data, the company is starting with a familiar concept, the affiliate program. Establishing potential referral networks, where end-consumers, and developers of apps can refer potential customers to businesses, and when there is a successful sale, an affiliate commisison is paid out. This is a great place to start, because it is a concept that businesses, developers, and consumers will understand and be able to operate within, without changing much on the ground behavior.

If you identify a customer in need of vehicle servicing, and successfully refer them to a local service center, you can be paid money for making the connection, something that when done right could also be applied to the end-user in form of credits, discounts, and other loyalty opportunities. An affiliate approach to the monetization of data via the Carvoyant API makes for an easy sell, but one that can be applied to a myriad of business sectors ranging from automobile services to food, shopping, travel, and much, much more. While an affiliate base is being established, Carvoyant can also begin to look towards the future, and shifting behavior.

Monetization Beyond Affiliate
While I'm fine with Carvoyant kicking off their monetization strategy with a calssic affiliate program, I feel pretty strongly there are many other opportunities for monetization, something that Bret agrees too. When you think about the central role cars play in our lives, the opportunities for inciting meaningful experiences, are endless. While the real money is probably around the mundane realities of the average car owner, the chances for serendipity, beyond these known areas is the exciting aspect. How do you not just help users find the best time to get their oil changed, but also take that side street, instead of freeway that might involve a chance experience that could range from dinner, to concert, or just find that right sunset location.

There is a pretty clear conversion event involved with the affiliate model. A user clicks on just the right deal, a sale is made, and revenue is kicked back from the business to the platform, developer, and is something that hopefully reaches the end-user in meaningful way. What other types of "conversion events" (man I hate that phrase) can we identify in car culture. How do we encourage people to take public transit, share vehicles, or how do we make large fleets operate more in harmony? With the right platform, I think we can quickly go beyond the traditional affiliate transaction, and develop a new wave of monetization around IoT data, that goes beyond just eyeballs, and links, and is more about engagement and true experiences.

Experience Credits Not Just Sales 
Just like moving beyond the affiliate conversion event, I think we can go beyond the transaction also being currency or sale based. How do we create a more experience based currency or credit system that can be used equally to help businesses generate sales, and establish loyalty with customers, but also allow developers and end-consumers to exchange units of value, attached to valuable automobile data? If a $20.00 deal on a $30.00 oil change, results in a $2.00 affiliate revenue share, what would the value of pulling off the freeway, taking the side road and catching just the right sunset picture be worth? How do we incentivize experiences, not just sales? If we are continuing to weave data generated from our physical worlds, it cannot always be about money, there has to be other value generated, that will keep end-users engaged in valuable, yet meaningful ways.

Sharing Economy
As our worlds continue to change, partially because of technology, but also because of other environmental and societal pressures, what value, sales, and experiences can be generated from the data exhaust produced as part of the sharing economy? If its our car, our data, and our API--does this apply when it involves our ZipCar usage, rental car, or possibly Uber? How does the sharing economy impact data generated via connected cars. When the end-user is the center of the conversations, these alternate use cases have to be included, and make sure privacy is protected, but also opportunities around that data to be securely shared with users. This isn't just a shared automobile data conversation, it is potentially applicable to any other objects we rent and share like tools, equipment, supplies, and anything else we may use as part of our business and personal lives.

Commercial Fleets
Just like the data exhaust from personally owned vehicles, or automobiles used as part of the sharing economy, the opportunities, and patterns available for commercial fleets will look very different. How do we incentivize efficiency, cost savings, and safety in fleet operations? What do the affiliate deals, and experiences look like for fleet vehicle drives, and the companies that own and manage them. Think of the implications of big data exhaust from vehicles in heavily regulated industries, and public service entities like police, and fire. We will also have to think very differently about how revenue is generated and shared, as well as look at privacy and security very differently. This doesn't reduce the opportunity in the area of fleet management, it just needs a significantly different conversation about what we need for this class of automobile.

Establishing Common Blueprints 
Beyond the individual conversion events for individual drives, or the wider opportunities for sharing economy companies, and commercial fleet operators, where are the opportunities around identifying common patterns of vehicle usage at scale? How does the vehicle usage of the LAPD differ from NYPD? What does the average residential vehicle owner in San Diego look like, versus the rental car tourist for San Diego? Using connected vehicle technology like Carvoyant opens up a huge opportunity for better understanding car culture at a macro level, beyond what the auto industry, or maybe Department of Transportation sees. How do we begin having honest conversations about our vehicle usage, and allow drivers to be educated about larger studies, allowing them as a company or individual to opt in, and share data, to participate in larger studies? We have to make sure and consider the bigger opportunities for understanding beyond any single endpoint on the connected car network, and look at entire cities, states, countries, and other meaningful demographics.

Lots More To Discuss, Something That Needs Transparency
This is just the beginning of these types of discussions. I have a handful of companies, like, who have access to huge volumes of extremely valuable user-generated data, who are trying to figure out how to developer useful tech, make money, all while doing it in a healthy way that protects end-users privacy and security. I am not opposed to companies making money off their API platforms, and user generated data, I just insist that APIs always be used to make it more transparent, and technology such as oAuth employed to give end-users more control, and a vote in how their data is collected, stored, shared.

This post is about me working through my last conversation with Bret, and hopefully will result in several more stories here on the blog. I also want to prime the pump for the APIStrat IoT Big Data Workshop at Gluecon in May, and make sure my readers are aware the workshop will be happening, and if you want to join in the conversation. This is just one of many posts you'll see from me discussing the big data exhaust generated from Internet connected devices, but also the potential for transparency and healthier platform operations when APIs and oAuth are employed. These types conversations are only going to become more critical as more of our physical worlds are connected to the Internet.