Regular readers know that I am focused (fixated?) on a concept I call “central market position.” I use this term to describe companies (typically media and data companies) that occupy a trusted, established and neutral position in the markets they serve. Central market position is important because it can be monetized.
Traditional data publishers collect data themselves, whether via manual or automated means. They scrub it, organize it and otherwise add value to it, then turn around and sell it This is a solid, established and successful model, but companies with central market position have a much larger opportunity.
With central market position, you have the potential to do things that nobody else can, things that would otherwise be viewed as impossible. You can, for example, ask all the companies in your industry to share their customer lists with you, their sales data, employee information, their prospect lists – practically anything. How is this possible?
Well, two conditions must exist. First, this privileged information will only be provided if it is directly used to solve a major need or problem in the marketplace. Second, the intermediary who will be handling the information has to be established, trusted and neutral. The natural intermediary is a company that has a central market position.
Consider a product called PeerMonitor, a Thomson Reuters product. PeerMonitor literally hooks into the accounting software of participating law firms and sucks out all their billing information, right down to line item detail. Why would any law firm allow this? Because the need to know the going market rate for, say, a bankruptcy attorney in Atlanta far outweighs the reflexive need to protect information like this.
Consider also a company called SQAD in the media world. Advertising agencies electronically submit their purchase orders to SQAD. Are they giving away key company secrets by doing this? Yes, but it’s worth it because the data that comes back to these agencies – namely the real prices being paid for television and radio advertising – is more than worth it. And SQAD, as discussed, is a central, trusted neutral player that normalizes, de-identifies and aggregates the data in such a way that companies can give away their secrets without giving away their secrets. It works for everyone involved. Another interesting company is MDBuyline. Here, participating hospitals submit price quotes for medical devices and other hospital equipment. MDBuyline aggregates the data so that all participating hospitals can see the true going rates for medical equipment, not the meaningless list price. Again, the benefit is sufficiently large to justify supplying confidential information to a third party.
What you need to do is recognize your central market position, and start identifying market needs you can address as the central collector and aggregator of critical industry data that would otherwise never be shared. Trust me, the opportunities are endless.