Posted on: Wednesday 25th of September 2013
Handshake is a new app and web service (in beta) that aims to help consumers to negotiate a price for their personal data and sell it directly to companies. Consumers create profiles choosing how much data they want to share. These are accessed by brands that contact individuals via the app and offer them rewards in exchange for their information. The offer to business is that they can benefit from real-time customer interactions creating opportunities to build more positive relationships with consumers. We spoke to Duncan White, a founder of Handshake, to find out more about the business.
What’s the big benefit your service is designed to offer?
The way brands use data needs a complete rethink. As consumers get harder and harder to contact, how can working with increasingly low response rates continue to make economic sense? Currently consumer data, sometimes of dubious accuracy, is traded without the person’s knowledge. We believe that consumers should negotiate a price for sharing their data with the brands with which they want to engage, and that’s what Handshake is here to achieve.
Handshake is about fairness, equity and reciprocity. We want to empower consumers and help brands build stronger individual relationships with their customers.
What inspired/motivated you to start doing this?
I’ve been involved with many businesses which have tried to understand the motivations, behaviours and habits of both customers and potential customers alike. When carrying out customer feedback in the past, low percentage return rates have been accepted as good. It’s not, and doesn’t give an accurate picture to take accurate decisions.
On the consumers’ side, businesses have been selling data and using it in many ways for their own gain – it’s not theirs, it’s the individuals’. So individuals should be the ones to determine what is done with it.
Handshake is about addressing these two problems by bringing consumers and brands much closer together to build, better, longer lasting, more profitable relationships.
What is the business model? How do you/will you earn your keep?
It’s simple. Brands pinpoint who they want to speak to, how, and why, and Handshake manages that communication with the consumers via an app or a website. The individuals contacted can decide whether they want to engage and on what terms and the whole process is powered by a powerful negotiation engine that helps strike a deal that’s acceptable for both parties. Handshake takes a nominal fee from the brand using the service for each deal struck.
Handshake is a truly innovative platform that has never been attempted before. We are beta testing all aspects of Handshake, from messaging and product features to the true impact of negotiation in defining the ‘just’ reward. In addition to straightforward survey-based activities, we will also be capturing new data classes – such as intent – and applying gamification principles to make the experience more fulfilling.
Where would you like to be in 3-5 years time?
We would like to be the recognised global information exchange where brands and consumers come to trade data.
What obstacles will you need to overcome to get there?
The existing model is well established and highly profitable so it will take time to show that there is another way to achieve better outcomes for all parties. If we can educate consumers as to the real value of their data and prove to brands that the old way of trading data is just not as effective or efficient, we can start to rectify the current unease around how personal data is currently collected and used.
How do you intend to recruit enough consumers to make it worthwhile for companies to join?
This is the problem for all new online start-ups – you need users to attract companies, but companies want to see users already populating the platform.
We have tackled this problem by launching a beta testing phase of Handshake. To attract beta testers, Handshake is offering a ten per cent equity stake in the business to the first 3,000 early adopters. During the beta phase, testers will be supplying data and information directly to Handshake. The amount they share will and the level to which they engage will determine the share of the equity offer they receive. On top of this, one beta tester will be given a further two per cent equity stake, equivalent to £30,000, in a prize draw competition. With these incentives, Handshake has already attracted over 3,000 beta testers.
From a client perspective, Handshake has also secured corporate beta testers who are interested in this early adopter community and eager to try out the platform.
Isn’t negotiating for access to data a very costly, time-consuming process? How will you do this in a way which keeps costs low?
Handshake is an online marketplace so we don’t yet know the exact value of the data that will become available. We do know that businesses will have access to a wide range of data classes from individuals, including intent and real time behaviour, which is far broader than anything existing databases can offer. Combine this with much higher response rates – traditional data purchase tactics deem two per cent a strong result for response rates; Handshake’s testing models receive between 50 to 60 per cent – and businesses should be able to obtain much more detailed and accurate data for their budgets.
For more information please see attached Handshake white paper.