For the past several years there have been 'wild' predictions on how quickly the alternative data market will grow. So far, all of these have been not wild enough - growth has outpaced even these aggressive predictions.
We have touched in the past on the rise of traditional market data and the long slow burn before the inflection point was reached in the mid 1980's. The alternative data space feels very different. It is already large and acknowledged across industry sectors most significantly within financial services. It also feels much more democratic. The vast majority of companies large and small are creating and storing data that could be considered alternative data.
Marketplaces and marketplace tools are proliferating and giving companies an increasing number of go to market options. It is still a confusing landscape though, as new buyers and sellers are entering the market daily through this myriad of pathways.
So, where do we go from here?
There are four important aspects that any aspiring or growing data business owner needs to watch and manage:
Let's take these in turn.
Know what you have (and as importantly what you don't have)
Often, we are approached by people with a familiar mantra: 'I have tons of data, it must be worth a lot of money'. The answer is always yes, maybe. Provenance, ownership and licensing rights are often overlooked when companies start collecting and storing data on their operations. It is important that these are in place prior to the data collection to ensure no issues down the line with monetisation.
Beyond these principles, simple things like data dictionaries with detailed descriptions, an understanding of the coverage, uniqueness and use cases or applications for the data make it much easier to plan a go to market strategy.
Have a coherent plan on how to take your data to market
This again seems fairly obvious, but it is more nuanced than it appears at first thought. Do you want to own your own private online web-store, or would you rather be on several public marketplaces? How will you run sales efforts / drive demand for your data? How should you best productise your data to maximise the value?
These and other similar questions are important to decide on key organisational and operating principles around your burgeoning data monetisation business.
Vet potential distribution partners carefully
Partnerships take a lot of time and resources to nurture. And yet, successful partnerships are built on working together over time and understanding each other's businesses and propositions thoroughly.
With the growth in innovative technology and marketplaces that are all keen to add datasets to their offering, you need to make sure the approach to market is a shared vision and will be key to unlocking the value of the partnerships you do enter.
Review your data business periodically in light of emerging trends
Ultimately, this is a fast-paced market that continues to go through rapid structural and functional changes. It is very different to what it was 6 months ago, let alone two years ago. As such, there is no one size fits all approach to the market. Rather, a tailored approach that is reviewed periodically, based on market feedback, is the way to maximise the monetary value of the data companies are collecting.
In some ways the past 18 months has emphasised how connected the world is, and how data is the thread that is woven into the fabric that connects us all. We are here to help understand that global data fabric, and to maximise your specific benefits, whether you are on the supply side or the demand side of the data equation.