Big Data Helps Startups in Education, Health Sectors

Increasing consumer appetite for data expands business opportunities.

Steve Case, Chairman and CEO of Revolution LLC and co-founder of AOL, speaks at TECHONOMYDETROIT Sept. 12, 2012, in Detroit, Michigan.
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Increasing access to government data can help tech startups disrupt outdated business models in the health and education industries and offer personalized services to consumers, said AOL Co-Founder Steve Case.

The increased access to data about everyday life and trends made possible by cloud computing can help startups meet the consumer demand for personalized health care solutions, Case said on Tuesday during an event organized by the Aspen Institute and Bipartisan Policy Center think tanks in Washington, D.C. The education sector is also ripe for disruption by tech companies because that business system "has not really changed that much in 100 years," Case said.

Analyzing data about a student's habits and preferences can help craft lesson plans to teach topics in new ways, including with videos or with more personal interaction because "we don't all learn the same way," Case said.

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"Those are the areas where there is great growth opportunity for the next 25 years," said Case, who now funds startups as chairman of venture capital firm Revolution.

Health care startups marketing data services include 23andMe, which allows customers to test their DNA and family history to spot health risks. PatientsLikeMe is a Web platform where customers share health tips with others dealing with similar diseases and ailments, which also helps collect data to share with medical research groups and government health regulators. Education startup Coursera offers online courses and also partners with universities to brainstorm ways to improve tutoring and to help students gain employment.

The challenge to disrupting health care and education business models is decisions in those sectors are traditionally made by large institutions that fund those systems, which requires startups to partner with organizations and be patient with new ideas like personalized services, Case said.

Health care and education are becoming more consumer-driven businesses as people look more to technology for everyday solutions and as they become more comfortable with sharing personal data, said Esther Dyson, an angel investor in health care startups and chairwoman of the nonprofit Health Initiative Coordinating Council.

"People look at their phone records, they look at their financial records and they are starting to say, 'Why don't I have the same data about my body?'" Dyson said during the event. "The ability to see your own patterns is something that is now possible and consumers are getting used to it." But the increasing availability of data also raises civil liberties questions, including whether access to criminal records or personal habits will bias decisions about access to private sector services, Dyson cautioned.

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"We will have more social and political issues as we become better at predicting," Dyson said.

Government can enable startups to innovate new data services by carefully crafting privacy rules that protect personal rights but do not restrict entrepreneurs from accessing data on consumer trends, health records and other information that could help develop solutions for education and health care, according to Case.

"I think we are doing a pretty good job of putting that basic framework in place," he said. "One of the things that is really smart that government has done is open up it's own data. It's got tremendous data across different agencies of government and agencies themselves are never going to be the most innovative ones to figure out the ways to take that data and apply it."

The online service launched in May 2009 to provide public increased access to government data. If the U.S. fails to craft what Case called "an innovation economy" then businesses developing new data services will go to other countries, he said.

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