Last summer in this blog I posted a calculation of the monetary value for our typical personal data. It came out with 10 Euros per year for most of the large Internet companies and up to 40 Euros for the most successful ones.

Continuing the thread, we should ask once again if those data have a greater value when we use them ourselves. My first idea was to simply look at time savings, which resulted in several hundred Euros a year benefit for those who analyze themselves to understand their work and personal life habits.

Now I think that is probably correct, but oversimplified. Most of the true innovations change the nature of what we do, and this goes well beyond the simplistic concept of having lower cost of doing the same things as before. Take the classical office suite (Word, Excel, PowerPoint, Outlook) as an example. Would you be typing slower on a typewriter? Probably not. An overhead projector slide is quicker to draw with a felt tip pan, and Excel is useful only if you invest your time in learning how to build formulae and scripts. Outlook would be worst of them all as e-mail is now universally described as a productivity killer and bookstores are full of tutorials explaining how to send and receive less e-mails. And what comes on top of this all is that paper consumption has dramatically grown in the process of replacing old office techniques with the new electronic tools.

So why would large companies and private persons keep using all those “productivity tools” and keep paying for them, if they do not produce more output in the same time but only consume more resources? The answer is simple: because they make a difference in experience.

It is not “more of the same in less time” that we get with these products, but rather a different sort of things that we can now do. The whole thing with e-mail is not that it would let you write more person-to-person messages in a given time. It is about sending your message and having it received everywhere in the world within minutes. That was not possible before, and it is possible now, and this is why we are willing to pay.

Some numbers: regular mail is still quite popular in Germany, and Deutsche post makes about 9,5 billion Euros in annual revenues with the traditional postal service. If we ignore the questions of methodology for the sake of making a simple argument, that would be 115 Euros per person per year or less than 10 Euros per month, with the profit margin of 5 %. You would actually pay more for an Office 365 subscription, and Microsoft would make a 15 % margin on this business. From this perspective, e-mail looks like a luxury version of traditional mail, so people are willing to pay more and the makers of it can generate more profit. Despite of the broad criticism of the concept itself that e-mail distracts you and is ultimately evil.

The same logic applies to measuring yourself and analyzing your work and life habits. This is a new sort of technology product, and it gives you something you could not have in the past. In the past, you would not really know how you spent your yesterday. And you would not really know which people take most of your time. Neither would you be really sure that you have been working on that important presentation during all that long intercontinental flight last week (probably this is what you want to believe, unless you know that you actually watched three movies on that same flight).

Does this knowledge make you more productive? Maybe, if you are capable of changing your habits once you know what they really are. But one way or the other, it makes a difference.

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