Thanks for being here & Merry Christmas!
Announcement(s):
Our transaction data is now available at a more granular “row level”.
Contact me to learn more.
Theme that emerged in this week’s email is that data vendors that own the sales process end-to-end are in the best position to succeed (& there are lots of year end lists).
QUOTES
“Selling data is all about finding the match between use case and data product. Data vendors sell their most valuable data products where they own the customer relationship, because this is how they can get the deepest understanding of the customer’s use case.”
News Articles
Podcasts
Cool Charts
Final Thoughts (The End of the Hoodie?)
Appendix
#1 – Harbr_ published The one thing every successful data vendor is doing. December 2022.
My Take: Successful data vendors own the means of distribution (“core channel”). This allows the seller the ability to control the customer experience, have a feedback loop, control governance, and upsell. Placing your “core channel” at the center of multichannel approach is best. My experience has been that data sales can be an opaque process and you need to understand your offering better than anyone. Be clear about the biases in your data and share best practices. All of this is only an option if you control the sales cycle (“core channel”) & customer relationship.
#2 – Doug Laney published in Forbes Leveraging Data as Collateral Starts With Knowing Its True Value. December 2022.
My Take: The time is ripe for a fresh look at data as an asset. While we are seeing big companies (like the airlines) are able to use data as collateral, the path for small business to use data as collateral is less clear. Valuing data is tough. The author describes several valuation methods & highlights companies in the space that are attempting to formalize the process of valuing data. My experience is the value of data differs widely based on the use case. A large hedge fund using the data to place trades might be willing to pay a lot, while an academic might love the data, but not have that same budget. From the vantage point of the lender accepting “data assets” as collateral for a loan, it is important to understand how the market might value the data, but also understand how the value of the data changes if the company producing the data ceases to exist.
#3 – Elana Iskowitz published Cooking Up a Storm: How The Right Data Ingredients Lead to Next Best Actions for Your Advisors. December 2022.
My Take: I enjoy the ingredients analogy with regards to data. No matter how pretty the cake, if your ingredients are low quality, the cake won’t be any good. One bad experience and your customers won’t come back. Ho to avoid that fate with data?
BONUS: Mikheil Shengelia, Research Analyst at Eagle Alpha published in Integrity Research Alternative Data M&A is Heating Up: Looking Back and Ahead. December 2022.
BONUS 2: The Economist Magazine reviews two books. The Equality Machine & Escape from Model Land. December 2022. Both books are said to offer a more optimistic view of big data & artificial intelligence.
BONUS 3: Compilation of lists & predictions for 2023
Two Sigma’s 10 predictions for 2023.
ThoughtSpot’s 9 data and analytics trends for 2023.
Eckerson’s What To Expect in 2023: Ten Predictions to Ring in the New Year.
Raconteur’s 2023 trends – finding upsides in a downturn
CDO Magazine’s Global Data Founders' List 2022.
Seattle Data Guy’s Where Is Data Going In 2023 - 3 Trends I Am Seeing In The Data World
#1 – Mark Fleming-Williams (now powered by CFM!) interviews Marco Jean Aboav of Etna Research. December 2022.
My Take: I’ve come across more than a few firms like Etna in recent months. They are solving a real problem in the market. There is too much data, tools, vendors, marketplaces, tech … & the clients (data buyers) get overwhelmed trying to figure out how to best approach it all. Etna will handle it for you. They can customize products (“indices”) that will, in the language the Portfolio Manager, allow the client to get value from these new alternative data offerings (incorporating traditional data as well). It sounds like this is simply that quickest & easiest way for a HF to start catching up in the world of using data to inform decisions.
It will be interesting to see the growth here. There is a need for this type of “outsourced data” support in the market. These bespoke offerings can add a ton of value, but every HF client wants to have some proprietary edge in their use of data & method of driving value…this is tough to do and really tough to scale.
Highlights (34-minute run time):
Minute 01:00 – interview starts; Marco’s background & Etna Research background
Minute 02:20 – how & why was Etna formed?
Minute 08:00 – different data for long-term horizons vs short-term focus
Minute 10:00 – client problem and how Etna solves the problem (generally working with data is hard)
Minute 12:00 – buyer’s cost more than just the fee for the data
Minute 21:00 – the difficulty of launching a new fund with this data; also ability to serve other end markets
Minute 23:45 – pull approach vs push approach…
Minute 31:00 – how to sell their offering to prospects
Source: Eagle Alpha published their 2nd Annual Alternative Data Report. December 2022.
Tremendous content from the perspective of both the data buyer & the data vendor.
Check it out!
Chart from slide #14
BONUS: SigTech’s 2022 Institutional Investor Report. December 2022.
The results in this report are from an online survey fielded from Oct 28 to Nov 12, 2022. There were 119 respondents from 16 different countries. The survey spanned the institutional investor segments, including family offices, endowments, foundations, insurance, sovereign wealth funds, pension funds and defined benefit plans.
Bottom line: 2/3 of investors expect to increase their allocation to hedge funds. HF’s that work with data are in a better position than those that don’t.
Source: The End of The Hoodie?
The rules for attire have changed dramatically in recent decades. If you look at an event from 75-100 years ago, whether it be a baseball game, school function, a barroom, or a dance, nearly every man is wearing a suit, often with a hat. The women would likely be in a dress that would be considered formal by today's standards.
Comfort was secondary.
This has changed as people now dress almost exclusively for comfort (me included).
Form & function has swapped positions in the rank of importance.
Why is this?
Status at one time was demonstrated by how well you dressed. People aspired to be considered high-class & high-class people were well-dressed.
Today, sloppy attire signals that you have enough (money, fame, time, etc) that you don't have to care. In a professional setting, perhaps sloppiness signals that you are too busy building your business to find time for personal grooming.
Steve Jobs famously wore jeans and a black shirt every day. He wanted to reduce the number of decisions he made. Not having to think about what clothes to put on eliminated a decision.
For those paying attention, the company FTX just blew up in dramatic fashion, fraudulently taking billions of dollars from millions of people. The Founder & CEO, Sam Bankman-Fried (SBF), was the poster child for sloppy dress and substandard personal grooming. His poor dress, intentional or not, signaled that he didn't have to care. As his star was on the rise, everybody wanted to be near him, everybody wanted his attention, everybody wanted to invest in him.
With his spectacular fall from grace, norms should start to shift. I don’t think we will ever get back to suits & ties, but I do think there will be increased focus on dressing to demonstrate a certain level of maturity. It is also a signal that you have respect for the people & institution with whom you are meeting.
In SBF’s case, his wardrobe choice will be easy going forward…prison stripes.
SBF sitting with two former Heads of State.
.