Today I was talking with a fellow entrepreneur who told me about a new class of web2.0 companies that I had not heard of before. Financial portal sites that you give your financial account login info to and then they screen scrape those sites to provide you a single portal view of all your information and then anonymously compare it to the community.
Are You $#@& Kidding Me? (Pardon my censored obscenity…)
That was my initial reaction when I heard this. Giving some 3rd party website my login to my social network or photo sharing site for data aggregation purposes is one thing (and that is scary enough), but who in their right mind would give some 3rd party website the login to their financial accounts?
And yet, that is exactly what Cake Financial, Covester (recently raised $6.5M in funding), and others are doing. Granted, I don’t know a lot about these firms at this point, I know Cake claims to integrate all your finanical data and Covester might be more of a money management social network (wasn’t this already tried with the messages on Yahoo Financials? I know insiders who leaked data and caused possible financial damage to their companies on sites like that). I am both surprised and not by the fact that these companies exist and are getting funding. I just hope that they are thinking of the long term and learning from the recent financial scandels and are putting real safeguards in place to protect themselves, their investors, and most importantly their communities.
Time will tell…
But I do think this just shows the real need for Open Data sharing access that is the corner stone to the new value proposition for most of the internet based services. This is an area that I have been doing a lot of thought and research on lately. First by building a proof of concept demo for SnapLogic that integrates an open with a not-so-open service to show the added value of the combination. And Second, leveraging that initial POC and my years of selling experience to come up with a number of interesting ways to leverage these two data types to provide disruptive changes in the sales process and possibly organization of sales teams (more on that later…). I have also been working through a number of real business differentiating photography sharing capabilities that use the same concept for FocalPower.
The need for services to enable their uses to access and share their data and metadata with other services/users is real and valuable. The real trick is choosing the right level of openness to make it usable by the masses and proliferate while enabling new revenue generation. You have to balance the openness with the protection of your users. How do you do that such that you don’t prevent the innovation that this type of openness allows? Look at all the innovative things that have come out of the open API on Flickr. Opening up your service via an API to share data and metadata has to be an all or nothing proposition with regards to who has access to that data. Placing too many restrictions just stifles the innovation. Note I said restrictions, not safe guards. There needs to be safe guards in place to protect the users. And the ability to users to opt-in to the open access or different levels of the access.
The key thing in all these integrations is for the users to read the terms of service! You may be invalidating your terms for using a service if you give your login information to a 3rd party. And, like the ownership rights grab that have been making waves in the photography industry, you might not own all the information that you expect to own if you use a service.