Data Insights from Bitsight

A Boston-area start-up called Bitsight is pulling in investor money so quickly, a total of $95 million, that it doesn’t know what to do with it all … yet.

And what does Bitsight do, to justify this level of investment? It examines company websites, evaluates them for the quality of their website security, and assigns them a rating, much like a credit score.

How do they do it? There’s a bit of proprietary secret sauce in how the company evaluates the security of a website, but what’s particularly interesting is that they do it all with publicly available information. And that raises another fascinating aspect of the business: the companies that Bitsight rates are not its clients. Bitsight is not an online security consultant with an automated assessment tool. Indeed, it has evaluated over 60,000 websites to date, and ultimately may evaluate tens or even hundreds of thousands of websites.

Why would anyone want this information? The uses for this data are surprisingly numerous. You can sell it in the form of a benchmark products to the companies you have rated. What IT manager wouldn’t want to know how their company stacks up against its peers? A better opportunity is to help insurance companies properly price data breach insurance policies.

But perhaps the best opportunity is to help big companies evaluate and manage risk with their vendors – a huge issue as a number of headline-grabbing recent data breaches resulted from a company’s network being penetrated via one of its vendors that was connected to it.

While Bitsight may look like a cutting edge analytics company, what’s significant is that so much of its business model is drawn from very basic approaches used by many other data publishers. It is aggregating publicly-available data into a database. It normalizes this information, then applies an algorithm to assess it and produce comparable company ratings. It sells this data product for internal benchmarking, risk management and due diligence applications.

In short, despite its high tech trimmings, Bitsight very much has data publishing DNA. It is also a great example that data products don’t have to be perfect right out of the gate. By relying on public information, Bitsight can’t possibly know everything about the security of a company’s website. But by relying just on public data, it can quickly build a large database of comparable company ratings using a credible methodology and solve market needs that require a certain scale of coverage. If you’re the first data provider serving a serious market need, you can launch with good-enough data and improve it over time. Trying to perfect your data prior to launch can mean missing the opportunity entirely.

Time to Get a New Address?

I’ve long been fascinated by unique identifier systems, because while often hard to implement, they can provide enormous value and constitute a great business opportunity. We’re all familiar with the D&B DUNS system, but there are far more identifier systems in use in vertical markets than you might expect. Don’t, for example, try to publish a book without an ISBN number. Similarly, don’t try to get into the advertising specialties business without an ASI number.

Identifier systems are not just for companies. They exist for people too. Physicians in the U.S. have government-issued unique identifiers. LexisNexis has implemented a similar private sector solution for lawyers called the International Standard Lawyer Number (ISLN). And we’re all of course familiar with Social Security numbers. For geographic locations, think about such identifiers as ZIP codes and their value in identifying specific geographic areas.

The power of unique identifiers is that that they serve as a sort of numeric lingua franca. Everyone agrees that a specific company, person or location is identified by a single permanent identifier. This removes ambiguity. It makes all sorts of transactions easier and more efficient. It allows for better and more precise record-keeping. And in this data-centric age, it makes matching of datasets easier and more precise. If everyone can agree on a unique identifier system, all sorts of things happen more easily and smoothly. Needless to say, the operator of the identifier system is in a powerful and lucrative position.

But how ambitious can you get with a non-governmental unique identifier system? After all, if you can’t mandate adoption of your identifiers, you’ve got to build voluntary participation. That’s tough in a narrow, vertical market. Imagine trying to build participation on a broad-based, global basis.

That’s why we were intrigued to run across perhaps the most ambitious attempt at a unique identifier system we have seen. It’s operated by a company called What3Words. Its goal is to assign a unique identifier to every inch of the planet, in 3 meter square blocks. Further, much like the Internet’s Domain Name System, What3Words assigns each block a three-word name instead of numbers, believing the system will be easier to use with words rather than hard to remember random numbers or latitude and longitude coordinates.

You may be saying, “cool, but who needs this?” Well, start with obvious examples of aid agencies trying to serve areas of rural Africa, where no neat systems like ZIP codes exist. Indeed, the founders of Just3Words are quick to note that 75% of the population of the earth essentially don’t exist because they have no physical address. Similarly, hikers and travelers will benefit from being able both to find and describe remote areas. And with much talk of delivery by drones in the near future, a uniform global geo-identifier could be very useful. A consistent system also benefits government administration, development of consistent and comparable statistics, and much more. Those of us who regularly deal with international addresses know they are an inconsistent mess, and these are addresses in advanced, developed countries. There are vast swaths of the planet that still lack addressing systems at all.

It’s a big project, but there’s a big need. And hopefully this brief overview inspires some big thinking about the potential of unique identifiers to make all kinds of activities take place more smoothly and efficiently, with some of those productivity savings accruing to the operator of the identifier system.

Monetizing Information Flows

StreetContxt is a hot, Canadian-based start-up that just raised $8 million from A-list investors, including a number of big banks and brokerage houses. Its mission is simple: to maximize the value of the mountain of investment research that gets generated each year. But what really makes StreetContxt stand out to me is that it offers a very compelling business proposition to both those who create the research and those who use it.

For the sell-side (those who create the content), it’s currently difficult to measure the impact much less the ROI on the huge volume of research they create annually. They send it out to presumably interested and qualified recipients, with no way of knowing if it is acted on, or even viewed.

For the buy-side (those who receive and use the content), it’s impossible to keep up with the blizzard of information being pushed out to them. Even more significantly, some of this research is very good, but a lot of it isn’t. How do you identify the good stuff?

StreetContxt offers the sell-side a powerful intelligence platform. By distributing research through StreetContxt, research producers can learn exactly who viewed their research and whether it was forwarded to others (multiple forwards are used as a signal to suggest a timely and important research report). What naturally falls out of this is the ability to assess what research is having the most market impact. But StreetContxt also helps research producers correlate research with trading activity to help make sure that their research insights are being rewarded with adequate commission revenue. Even better, StreetContxt helps the sell-side by providing insight into who is reading research on what topics and with what level of engagement in order to help power sales conversations. In short, StreetContxt tracks “who’s reading what” at a very granular level both to measure impact but also to inform selling activity.

On the buy-side, StreetContxt helps those who use research with a recommendation engine. Research users can specify topical areas of interest that get tuned by StreetContxt based on who is reading and forwarding what research reports. In other word, StreetContxt has found an approach to automatically surface the best and most important research. StreetContxt also helps research users by monitoring relevant research from sources to which the research user may not currently subscribe. And since much research is provided in exchange for trading commissions, StreetContxt can help research users get the most value from these credits.

The magic described here happens because the content creators post to the central StreetContxt portal, and research users access content from the same portal. This allows StreetConxt to monitor exactly who is using what research.

Why would research users allow their every click to be tracked and turned into sales leads? Because StreetContxt offers them a powerful inventive in the form of curated research recommendations, a better way to manage research instead of having it flood their in-boxes as it does now, and most importantly of all, a way to ferret out the best and most important research.

The big lesson for me is that with a sufficiently compelling value proposition on both sides, smart companies can position themselves in the middle of an information flow and monetize the resulting data in powerful and profitable ways.

Data With Backbone

You may recall a political dust-up this summer when the Clinton campaign accused the Sanders campaign of gaining illicit access to its voter data. How was this even possible? Well, it all traces back to a private company called NGP VAN.

NGP VAN, which works only with Democratic and progressive candidates for office, maintains a central national voter database that it regularly updates and enhances. Providing campaigns with convenient access to enhanced voter data is a good product in and of itself, but there’s a lot more going on in addition to that. Each campaign uploads its own donor files to NGP VAN, where they are matched to the central voter database. In a sense, NGP VAN offers a comprehensive backbone file of all voters, and each campaign attaches its transaction history to that backbone file. If a single voter gives to two campaigns, the voter will have two records attached. Critically, campaigns can only view their own records, or that’s the way it’s supposed to work. A botched software upgrade apparently gave the Sanders campaign the ability to view records from the Clinton campaign.

This software snafu notwithstanding, this “backbone” data model is an interesting one. Because NGP VAN only works with candidates blessed by the Democratic Party, all the activity by all the campaigns is viewable in the aggregate by the Democratic Party, providing real-time insight into campaign field activities nationwide.

In addition, by matching to a dependable backbone file, each campaign has unduplicated access both to known supporters in addition to everyone else in its area, all in a single, normalized dataset The matching process also helps campaigns identify and eliminate duplicate records. As NGP VAN identifies new third-party data elements that might be helpful to its campaign clients, it appends them to its backbone database, making them immediately accessible to all its clients. NGP VAN also supplies a sophisticated user interface to its clients, including door-to-door canvassing tools that operate on an iPad. Finally, NGP VAN makes it easy to export client data to any of a number of analytical tools and services used by the campaigns.

The basic idea of building a comprehensive industry database and software platform, and letting clients deeply integrate their data into it, so that all their customers and every possible prospect reside in one place in one format – that’s deep embedment. A number of data companies are backing into this model, albeit slowly, but SaaS really opens up the prospect of everyone in a vertical industry sharing the same data without giving up any confidential information. Could your market use some backbone?

2015 Models of Excellence: Bucking the Disruption Trend

With the deadline for the Business Information & Media Summit fast approaching, here are four excellent reasons to look forward to your trip to Ft. Lauderdale (or to sign up if you haven’t already).

Trucker Path – Trucker Path is laudable from several perspectives. First, it developed a useful, much-needed and very successful app for truckers to use to find gas, food and even rest stops while on the road. It’s all neatly executed, utilizing GPS to pinpoint the nearest amenities, crowdsourced data and even user reviews. Even the advertising in the app is driven by proximity to the advertiser. This would be a nice business in itself, but Trucker Path has gone further. Leveraging the 300,000 users of its app, it is now launching a matching service to connect truckers to those who have freight that needs to be shipped. Marketplaces like this can be tough to launch, but Trucker Path took its time, and built not only a loyal following, but a trusted neutral brand, all key elements to succeeding with a new industry marketplace. All of this hard work is driving it towards a billion dollar valuation.

Parking Panda – Parking Panda was originally envisioned as sort of an Airbnb for parking spaces. If you lived near a stadium, for example, and wanted to rent your driveway, Parking Panda would connect you to those looking for parking.

The concept has evolved quite a bit since then. Parking Panda has now allied itself primary with parking garage operators, an industry badly in need of a technological assist. Now a consumer can specify a destination, and Parking Panda will identify available parking garages – all with guaranteed availability – provide rates and allow for online booking. Increasingly, Parking Panda users are even able to enter and leave the parking facility using only the Parking Panda app.

For garage operators, there’s also a payoff. They get greater operational productivity, a way to market themselves to better sell available inventory, the ability to vary prices in real time to respond to demand, and powerful customer analytics tools. High profile partners the Horseshoe Casino Baltimore, Tampa Bay Rays, and the Washington Nationals.

PeopleTicker – PeopleTicker is a classic, ground-up data play. Numerous systems already exist to help companies compare and benchmark full-time jobs to help them select the correct salary level. But what about the burgeoning contingent or “gig” economy? PeopleTicker saw a need to develop comparable benchmarking tools. It now draws on feeds of data supplied by major employers, augmented by web harvesting and other data sources, to build this unique dataset. Moreover, it’s made a significant investment to build more precision around job descriptions for greater comparability.

Quorum – Quorum is a data analytics company founded by two Harvard school buddies who went from mapping proteins to mapping relationships between members of Congress. Barely a year old, this startup is an online legislative strategy platform that provides legislative professionals access to the world’s most comprehensive database of legislative information, unique quantitative insights, and modern project management tools. With Quorum, users can easily search, save, comment on, and receive email alerts for all bills, votes, tweets, press releases, floor statements, caucuses, committees, and staff contact information from the U.S. Congress and all 50 state legislatures.

Quorum’s advanced quantitative analytics provide information on each legislator’s top issues, most frequent collaborators, ideology, voting history, and legislative effectiveness. By enabling users to easily log meetings, clearly highlight differences between bills, create legislative spreadsheets, and quickly email multiple legislators and congressional staff, Quorum’s productivity features save users valuable time.

Quorum’s comprehensive data, quantitative insights, and 21st-century productivity tools are changing the way people track legislation, build support, and take action – and it just might change the Beltway’s influence peddling industry for the better.

Bucking the Trend

As with all of our Models of Excellence, these are clearly all very different businesses. But all four are trying in different ways to enhance the efficiency of the markets they serve. In the case of Parking Panda and Trucker Path, their solution was to actually build online marketplaces. For PeopleTicker, it’s putting information infrastructure in place to make the market run more efficiently. With Quorum, the goal is to help organize and manage the process of creating and influencing legislation.

Perhaps more significantly, all four companies didn’t feel they had to disrupt their markets to make a place for themselves. Trucker Path’s new marketplace doesn’t try to cut out the freight brokers; indeed, it welcomes their participation. Parking Panda isn’t trying to find an alternative to parking garages; it’s helping that industry operate more conveniently and efficiently. And PeopleTicker didn’t try to become a recruiter or job site; it simply provides the critical data needed to make the existing market more efficient. What we see with Quorum is a sophisticated effort to organize a complex and unwieldy process for the benefit of those working in that industry. So while disruption is all the rage these days, there are still plenty of strong opportunities to bring what I call “innovation overlays” to markets.

You’ll have the unique opportunity to learn from the innovators behind these fascinating companies at BIMS 2015 in Ft. Lauderdale, See you there!