Alternative Data Weekly #162
December 1, 2023
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Theme that emerged in this week’s email is … the importance of understanding your customer’s problems and how your solution will deliver value.
QUOTES
“The cycle repeats. The business becomes more efficient and better at delivering value to customers. Most businesses go through improvement cycles, but data, analytics, and advanced models increase the cycles’ speed. Each iteration happens faster, and solutions are more effective. The business that improves the fastest wins.” – Vin Vashishta
News Articles
Podcasts
Cool Charts
Final Thoughts (Munger-isms)
#1 – Alex Izydorczyk published in InsideBigData The Government Needs Fast Data: Why is the Federal Reserve Making World-altering Decisions on Stale Data?. November 2023.
My Take: Hugely important and impactful decisions are being made with data that is out of date. The data made available to policy-makers should be the most timely available, and this goes far beyond the traditional survey data currently used.
#2 – A group of authors published on Databrick’s Platform Blog the article Data Intelligence Platforms. November 2023.
My Take: The authors share their viewpoint on how AI will fundamentally change data platforms and how data will change enterprise AI. These data platforms are becoming much more powerful. In layman’s terms, the data platform will be the centralized hub for all an organization’s data assets, both internal & external. Once in the structure, anyone will be able to ask questions of the data and get a trusted answer. It seems we are a long way from there, but like a lot of tech, this use case will happen suddenly and then we’ll all wonder how we ever did without.
#3 – Alex Izydorczyk published How to do Alt Data Research. November 2023.
My Take: Lots of good nuggets of information in this article. One that resonated with me was Alex’s commentary about salespeople (that includes me!). My take is that it is essential for data salespeople to be “in the weeds” with the data. I have found it useful to share interesting SQL queries or see if I can replicate the output about which my clients are asking. The better answers you can provide increases confidence in the engagement and gives you (as the salesperson) more information for the next sales cycle. You’ll be ready to impress as often data buyers will approach the same data the same way and have similar, if not the same, questions.
BONUS: Vin Vashishta’s Advanced AI Literacy: Getting Business Leaders To Think In Terms Of Cause And Effect. November 2023. “Business leaders must see the benefits first and feel the improvement themselves. That’s why the early phases are critical. No one asks for more until they have a compelling reason to.”
What else I am reading:
Matthew Bernath’s Data Constellations: Unveiling Insights From Data Collaboration. November 2023.
McKinsey’s The data dividend: Fueling generative AI. September 2023.
AltHub’s How Alternative Data Began. November 2023.
Benn Stancil’s Tribal Accelerationism. November 2023.
Pierluigi Vinciguerra’s The true costs of a web scraping project. November 2023.
Source: Auren Hoffman’s World of DAAS interviews Jeff Lawson, CEO of Twilio. November 2023.
My Take: I generally enjoy Auren’s World of DAAS podcast series, learning something new with each episode. In this Jeff Lawson episode, of most interest to me was Jeff’s thoughts on the three developer business models that scale.
Biz dev as a service
Op Ex as a service (most common … but not too many billion $$ market caps)
Algorithm as a service
In particular, what caught my ear was Jeff Lawson’s thinking about #3 the algo as a service. One big headwind for the data industry is that it is hard to work with data…once the tools improve, the owners of unique data assets will benefit.
Auren notably has said that data businesses are hard (I agree). I think data businesses will get much easier to build once #3 algorithms as a service matures around data … I have described this as the tools to engage with data are improving, but this is hard & will take time. Once the data “iPhone moment” happens, value will flow to the owners of unique, robust, insightful data sources. I like to think everyone will have a dashboard like Stripe’s Black Friday weekend dashboard, or everyone will have a Spotify Wrapped-type data product for anything you’d like.
Lastly, I liked the conversation around sales incentives. Who is the check-signer? And do we have a good relationship there? Is the person buying & using the product different than the person signing the checks. Make sure sale incentives are appropriate.
Last one … the importance of really understanding your customer problems & listening to them.
Highlights (56-minute run time):
Minute 01:00 – Jeff’s thoughts on Twilio founding in 2008
Minute 05:30 – creating new buying class; developer could now be the buyer (Stripe similarities)
Minute 11:00 – change happened ~2010; every company became digital company
Minute 15:00 – capex moving to opex
Minute 17:00 – three types of scalable developer business models
Minute 21:30 – customer concentration (happy, happy, happy … then it’s a problem)
Minute 24:30 – when to get human sales rep involved in PLG scenario (product led growth)
Minute 29:00 – Jeff’s learnings about acquisitions; most M&A fails to deliver value
Minute 36:30 – how have things changed in tech? ... other than everything is bigger
Minute 40:00 – “LAMP stack” & how that relates to current morass of SAAS vendors
Minute 42:30 – opportunities to collaborate with customer data
Minute 46:30 – changing attitudes about privacy & regulations
Minute 50:30 – advice from the internet; niche vs broad; the power of experimentation & pivoting
Source: McKinsey’s The data dividend: Fueling generative AI. September 2023.
BONUS: Forrester published Automate And Optimize Data Engineering To Accelerate Time To Value With External Data Sets. December 2022. Sponsored by Crux.
Charlie Munger
I am fascinated by common wisdom passed down through the ages. For me, it clearly demonstrates humans have many of the same feelings, emotions, & struggles across history. Timeless wisdom is timeless for a reason. It helps to be curious, have (financial) independence, record your thoughts, and live to be 99.
I’ll jump on the bandwagon memorializing Charlie Munger with a few of my favorite Munger-isms.
“Remember that reputation and integrity are your most valuable assets—and can be lost in a heartbeat.”“Those who keep learning, will keep rising in life.”
“You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.”
“We (Warren Buffett and I) both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.”
“There is no better teacher than history in determining the future… There are answers worth billions of dollars in a history book.”
“Invert, always invert: Turn a situation or problem upside down. Look at it backward.”
“A majority of life’s errors are caused by forgetting what one is really trying to do.”
“Acknowledging what you don’t know is the dawning of wisdom.”
“Live within your income and save so that you can invest. Learn what you need to learn.”
“Don’t drift into self-pity because it doesn’t solve any problems. Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought.”
“Just the discipline of having to put your thoughts in order with somebody else is a very useful thing.”
“The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.”
“There is no way you can live an adequate life without making many mistakes.”
“I would argue that passion is more important than brain power.”
“When you borrow a man’s car, always return it with a tank of gas.”
“The big money is not in buying the selling, but in the waiting.”"