A lot of companies talk about the value of your data, and about helping you get more control over the information you share, but Toronto-based Delphia is unique in aiming to build a viable, sustainable and scalable way to take a person’s data and turn that into real monetary gain. It’s not aiming to do this by putting a price tag on your social graph – instead, Delphia wants to pool the resources of a large group of individuals to derive real economic power through collective action.
“If you’re going to create a solution that effectively captures the value from our data, then it has to be one where we are going to aggregate it together, act as an act as a collective,” explained Delphia CEO Andrew Peek in an interview.
Other attempts, Peek notes, have often focused on individual data in terms of its value to advertisers – and in that arrangement the value of an individual’s data is actually quite low. Delphia, by contrast, is looking to the capital markets, and hopes to replicate and improve upon a model that has and continues to work. Hedge funds and other large institutional investors use machine learning algorithms based on user data all the time, but users don’t have any active participation in this process, either in terms of the data they contribute or in terms of reaping any significant reward.
Delphia wants to change that, by launching an app that will allow individuals to opt in to doing this kind of investment themselves, working together with other users. Users will also go beyond what these hedge funds can accomplish by actively providing additional info on top of what’s available via their passive participation through traditional online signals, which should translate to an advantage in investments.
“We ask you a series of questions every day, usually pertaining to current events,” Peek says. “So, Apple puts up the new AirPods, or Nike puts up the Colin Kaepernick ad – something’s happening every day. For us, that’s an opportunity to engage. But once we do, like, we really want to learn a little bit more about you. So there’s a handful of questions, those generate points. And then there are also points that you generate from connecting accounts: That could be connecting anything from a Twitter profile, to a Venmo account, to your phone’s location history to your Amazon purchase history – YouTube, Reddit, etc.”
This data will help Delphia make strategic picks in the stock market on behalf of their overall user base. It’ll collect fees, but will redistribute half of those back to its users who are investing their data, something which Peek notes will allow people to participate without even putting in any money. Users can also contribute funds, however, as with a traditional investment vehicle – though Delphia will be strictly focused on retail investing at launch, while it works on the trickier issue of institutional investment with regulators. For now, operating in a retail investment environment means all of its users can participate without any special requirements.
As mentioned, Delphia’s model requires that there’s a certain volume of users on the platform participating before it can work as designed by the data scientists on the team, who have published academically regarding the company’s model. That’s why they’re kicking off their public launch today with a sign-up page, with the goal of achieving a critical mass of 100,000 pre-registered users before officially launching their app. They’ve also built the calculator below, which is designed to show how their model will work based on the volume of users they sign-up, as compared to more traditional retail investment advisor and robot-advisors.
Delphia’s model is definitely ambitious, and it also requires a lot of trust on the part of users, something Peek freely admits. The difference, he says, is that their model only works so long as they continue to earn that trust, since users have to continue to participate to ensure their advantage remains in place. It’s also worth noting that there doesn’t seem to be any realistic way of putting the genie back in the bottle when it comes to data generation and sharing, but Delphia’s vision does re-introduce an element of control, as well as a way for those who might be locked out of traditional stock market investing to participate in generating true economic power.