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Theme that emerged in this week’s email is … there are a lot of resources available to those firms wanting to explore data monetization.
QUOTES
“So the role of an exchange or the role of market infrastructure is try to bring as much information. How much information can we bring to the market to get that true price assessment? So market infrastructure is all about trying to create transparency in information” – Josh Crumb
“I think there’s a lot more that can be done around data assets and actually tax streams off of say the attention economy that right now is completely being collected by companies like Meta and Google. But I think there could be data assets that become collateral. So I guess my point is I think the collateral system is constantly changing. It’s important to understand scale, and it’s important to understand where those shifts could happen.” – Josh Crumb
News Articles
Podcasts
Cool Charts
A Word From Our Sponsor: Data Commerce Cloud
Final Thoughts (The First 90 Days)
#1 – Institutional Investor published Unlocking Alpha With Alternative Data. July 2023.
My Take: This article was sponsored by Capital Fund Mgmt (CFM). This is a bit of a “how to” article for the buyside. The good news is they focus on the important part, which is answering the question “does this data add value?”. It is also good to see long-term investors putting alternative data to use. It seems most assume alternative data is only used for day trading or calling quarters. In fact, the highest value use case is seeing new trends develop and monitor big picture happenings. It is all about how you engage with the data.
#2 – Sven Balnojan’s How to become a data business. July 2023.
My Take: My warning … the data business is hard. That said, those companies that do it well are really valuable (ie NFLX, AMZN, SPOT, ZI). And, as the saying goes, all businesses will eventually be data businesses.
The six typical use cases shared by Sven are as follows:
Improve business decisions
Understand customers
Create smart services
Create smart products
Improve processes
Monetize data itself
His argument is you should focus on PRODUCT (#4 above). This gets you closer to your customer & erects barriers to entry for would-be competitors.
#3 – Matt Ober’s Consumption based pricing for data. July 2023.
My Take: This is the SnowFlake model and, in theory, buyers would like it as they would only pay for what they use. This still leaves open the different levels of value data provides to different types of buyers. The same data can be used by a HF to make billion-dollar decisions as a corporate buyer for whom the data is only “nice-to-have”. The key to pricing data is to capture that value difference. Very tough.
BONUS: Data Commerce Cloud’s (this week’s sponsor) 5 steps to building the optimum data monetization strategy “Long story short, data monetization is important for any business in the age of analytics and AI. And to do it correctly, you need a strategy.”
What else I am reading:
Matt Ober’s Sponsoring the non-athlete. July 2023
Press Release: Glacier Launches Platform for Data Vendors to Unite Emerging Data Risk Standards and Accelerate Data Adoption by All. July 2023.
Fable Data Delivering Real Time European Consumer Spend Data. July 2023.
Vin Vashishta’s Data Engineering Is Evolving, But Most Data Engineers Aren’t. July 2023.
Bonus: The Grant Williams Podcast: Shifts Happen, Episode 06. July 2023. Paywall (worth it). Note the Josh Crumb data quotes above were taken from this episode.
Source: Neudata’s How Can Data Monetization Generate Growth. July 2023.
My Take: Neudata is a great source for anyone in the alternative data space (buyers, sellers, technical people, etc). This webinar provides a great overview for data owners covering the benefits of data monetization. I have talked to many companies about monetizing data. Monetize externally or not, most companies would benefit from just getting their own internal data better organized. If decision is made to monetize externally, best to partner with a party with domain expertise to minimize risk, provide validation, and maximize revenue.
Highlights (50-minute run time):
Minute 01:30 - intro & Neudata background
Minute 08:30 - the data monetization opportunity (new rev, offset cloud costs)
Minute 10:30 - benefits (1- organize data, 2- understand data, 3- new insights)
Minute 12:45 - AI (of course, must mention topic!); garbage in = garbage out
Minute 18:00 - the three main groups of organizations that offer alt data
Minute 20:00 - where does data come from? Pro tip: do not erase your data
Minute 22:00 - data buyer categories & market growth
Minute 25:00 - Henry Scherman takes over to cover a few case studies
Minute 28:00 - The data monetization process
Minute 32:00 - discussion of risks
Minute 36:00 - webinar Q&A
Source: This chart is from the above July 26 Neudata Webinar.
Bottom line … data inputs for AI will be increasingly valuable. Public data now … Alt Data in the future.
Source 2: Data Boutique’s How to Price Web Scraped Data. July 2023.
5 factors that drive pricing:
DCC is the easiest way for data providers to build an omni-channel data business. With one DCC account, you can publish data products in your selected data marketplaces and channels - instantly. Reach in-market data buyers from across the globe and grow your revenue.
Visit the Data Commerce Cloud™ website to learn more.
Source: Michael Watkin’s The First 90 Days.
I picked this book up recently and found it helpful. Certainly if you are starting somewhere new, but also a framework for breaking down your strategic plan into 90 days increments. Good to consistently step back & review progress. 90-days seems like a good time frame.
The steps:
prepare yourself
accelerate learning
match strategy to situation
negotiate success
secure early wins
achieve alignment
build team
create alliances
manage yourself
accelerate everyone
It's fascinating to see how data monetization is evolving and how companies are leveraging alternative data for long-term investing and smart decision-making.