A recent article in the Harvard Business Review, entitled “To Get More Value from Your Data, Sell It,” jumps on the data bandwagon, arguing that many companies own valuable data that can be monetized through sale to third parties. The authors do a good job pointing out that many companies don’t realize that the data they generate as a by-product of other activities has value. Even more usefully, they point out that some companies automatically treat all their data as top secret, and lose revenue opportunities as a result of this lack of discernment.
But where the article goes a bit off the path is its implicit view that almost all data are valuable. They’re not. As I pointed out in a post just a few weeks ago, there are a lot of reasons any given dataset may have little or no commercial value. And sometimes company data really is too sensitive to be resold.
Later in the article, the authors laud Cargill for building and selling a database of seed information. While the authors correctly note that getting into the data business is a risky move for most companies, the authors felt this was a low-risk move for Cargill because Cargill had “already developed a database to support seed development.” As every data publisher knows, having a database and being in the data business are two very different things. To create a saleable product, there is a lot of investment and work to develop a user interface. Then there’s the challenge of bringing a data product to market. Cargill knows farmers and Cargill knows seeds, but Cargill knows very little about subscription data products. It’s extremely rare when a non-data company, however good its data, suddenly decides it wants to be in the data business and finds success.
We can expect the idea of companies monetizing internal data to become mainstream. But once the hype settles down and reality kicks in, these companies will be very receptive to working with data publishers to optimize the value of their data, because they’ll see both the opportunities and complexities involved in monetizing it.
The flipside is that data publishers should start to look to non-data companies as potentially rich information sources. Many companies do indeed have valuable datasets built as a by-product of other activities. Finding and licensing these datasets could be a quick way to market for a data publisher, and can also yield that rarest of things: a high value dataset with none of the traditional compilation hassles and the possibility of licensing on an exclusive basis.
Finding internal company datasets isn’t easy, but as the concept of turning internal data into dollars gets more visibility, companies will start to actively look for potential licensees. Stay alert for these opportunities, and be prepared to move quickly because licensed internal company data could be the next data gold rush!