Data Play

You might have seen in the news that Spotify is giving away a free Google Home Mini to all their premium subscribers through November 15. But before you run out to get yours, at least finish reading this blog post. With the Home Mini listing at $50 per unit, one might be forgiven for wondering how Google is able to afford that outlay of free product. We certainly did. As it turns out, data collection can be a long term source of value for companies like Google and Amazon worth a minimal short term investment; more data means more value, and Google (like other tech behemoths Facebook and Amazon) places a high value on user data. The data comes into play both in their marketing and in training their own AI systems to give users a more personalized experience.

Hyperpersonalization

Indeed, the more data Google collects via various digital touchpoints, the better they will be able to personalize their offerings to us in the future. As our CEO David Friend put it in his book, The Bottomless Cloud: “hyperpersonalization is the ability to understand the digital behaviors not only of ourselves but also of the devices, objects, and institutions with which we interact. The complex patterns of interactions among these objects may appear invisible or obscure to us, and radically different than the biases we have of how the visible world operates, but algorithms and AI can easily understand the patterns they form and then predict future behaviors.” In this case, if Google knows what we’re likely to do before we do it, they can predict our needs and market relevant products to us, driving more revenue.

Sit Google, Sit

Another important piece of the Spotify/Google partnership puzzle is how Google will use the recordings to train their AI in order to recognize and understand human speech more effectively. The training process involves feeding large amounts of data (in this case the Google Home user’s voice) to the algorithm and allowing it to learn from that data and identify patterns. As a result, these algorithms continue to get smarter over time. It’s in Google’s best interest to get its speakers into as many homes as possible so its AI assistant can get as much data as possible. Their partnership with Spotify makes this possible.

The Software/ Hardware Comparison

It’s a fact that Google’s entire business model from its inception in the 90’s has been about collecting information in exchange for a service then leveraging that information for profit. Google’s search engine, Gmail and Google Maps for example, have always been available free of charge. The development and iteration of that software has been a loss leader that captured valuable data. The Spotify/Google Home Mini partnership is only different in that Google is actually giving away hardware in this case. Like all of their other free-to-use products, Google is betting that this promotion will pay big dividends a few years down the line.

Learning Google’s Lesson

So how can you effectively leverage customer data in your own business? The sky’s the limit, really. But it’s absolutely critical for you to answer this question as soon as is possible. It’s become increasingly clear over the past decade that the more data you save, the smarter your business will become. So make sure you can afford to keep it all because businesses that fail to make that transition will be left behind in 2020. There are many ways to store your data these days; just be careful to not become hostage to your data storage costs and the company you choose to store it. Data is indeed the future of business, but first there must be an affordable and simple way of storing it. Enter Wasabi.