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?

Another Kind of Data Harvesting

I have written before about the data-driven revolution that’s taking place in agriculture today that will allow farms to radically increase their productivity and crop yields. Data collected from farm equipment and soil sensors allow farms to plant exactly the right seeds at exactly the right depth to maximize yields, all handled automatically by high tech farm equipment guided by GPS that can run itself autonomously. It’s an exciting future.

One of the key points of my earlier article is that a farmer’s data, by itself, isn’t that valuable. Knowledge comes from building a large enough sample of planting data from other similar farms in similar geographies in order to find benchmarks and best practices. Thus if you want data from your own farm to benefit your own farm, you need to pool your data.

But what if a farmer doesn’t want to make the needed investment to benefit from data-driven agriculture? Are there other markets for the data?

Well it turns out that there are. As an article in the Wall Street Journal makes clear, field level data doesn’t just benefit the farmer, there are others who will happily pay for it. For example, seed companies can get extremely detailed insights into what’s being planted and what’s growing best and where. They can use such data to inform both their R&D and their marketing and forecasting activities. There’s a Wall Street angle as well, with commodities traders looking for an edge by trying to get an early insight into what the forthcoming growing season will bring.

But even here, there’s a need for aggregation. The experience of one farm doesn’t help seed companies or traders very much. But the more farm data you can aggregate, the more valuable your dataset. The race is already on with companies such as Grower Information Services Cooperative, Farmobile and Granular Inc. are already duking it out to sign up the most farmers as quickly as possible.

The simple lesson here is that even though the same farm data can be monetized in multiple ways, there is a valid, indeed critical, role for an aggregator. We see also that first-mover advantage is critical in data plays like this. And as always, market neutrality is an important advantage: you’ll have a much harder time collecting this kind of data if you are a seed company as opposed to an independent information company.

Taking on LinkedIn

I read a fascinating blog post yesterday by  venture capitalist Hunter Walk musing how (or indeed if) there might be some way to compete with LinkedIn. In addition to Walk’s insights, the post attracted a number of comments from other venture capitalists and entrepreneurs. Apparently, taking on LinkedIn is a growing topic of discussion, at least in Silicon Valley.

The post discusses a number of different approaches:

·        Vertical Markets – could one create a better version of LinkedIn for specific vertical markets? The post doesn’t dismiss this as a potentially viable approach, but does correctly note that simply imitating LinkedIn isn’t likely to work.

·        Project Focus – LinkedIn is designed around the traditional resume and with that comes the expectation of fixed employment at specific companies for fixed periods of time. There are some who are speculating that the growing “gig economy” is creating a need for individuals to showcase what they’ve worked on as opposed to where they have worked. I would argue that Houzz, the wildly successful site for architects and designers to display their projects, is in effect a vertical and project-focused version of LinkedIn, optimized for a specific market and its way of doing business.

·        Data Verification – All the information on LinkedIn is user generated. That used to be considered a feature; now some are suggesting it’s a bug. My question here is how many people want/need verified data badly enough to justify ripping up the existing LinkedIn model?

·        Public and Private Data Control. There are some who suggest that there is room for a LinkedIn competitor that gives users more control over who sees their personal details, presumably at a fairly granular level. This is an interesting concept, but how much more personal information would people put online if they had more control? This new service would quickly start to bleed into Twitter and Facebook. That might sound like a big opportunity, but to me it sounds like a big mess, raising issues about separation of one’s business and personal life that I don’t think anyone has figured out yet.

·        Transactional. I’m a huge fan of B2B marketplaces, but the notion of essentially putting a “buy” button on people’s resumes strikes me as a limited opportunity. There are a very limited number of jobs where the work is project-based and people are hired strictly based on their skillsets. In addition, I think if you opt for this model, you necessarily have to fold in the data verification model as well because trust becomes paramount.

These are all interesting concepts, but they all come with issues. The biggest opportunity (and exposure) for LinkedIn is that it exists outside of workflow. If your job doesn’t involve hiring people, you likely don’t interact with LinkedIn too frequently. But what I’ve realized over time is that LinkedIn has become my Rolodex. If this is true for lots of other people (and I suspect it is), then LinkedIn needs to focus on better email integration and even more importantly, a light contact management capability. Why should I use a separate CRM system (which more likely than not is sucking limited data in from LinkedIn already), when I could keep all my contact notes in one central place in the cloud? This, by the way, is something that LinkedIn could sell as a subscription service.

Right now, all of this is just talk and conjecture, but it’s useful to note that in many respects, LinkedIn is no different from most other commercial data products.

Evolving From Data Providers to Market Makers

Trucker Path is a young company, founded only in 2013. Yet its mobile app, providing truckers with basic directory information such as location of rest stops, parking, diesel fuel stations, weigh stations and more has already attracted over 250,000 users. Its formula for success is a familiar one to data publishers: collect information that is really needed by a specific niche market but not readily available in one place elsewhere.

Another mobile app success story to be sure. And Trucker Path could have rested on its laurels. But just a few days ago, it signaled a much more ambitious vision with the launch of a new product called Trucker Marketplace. It is exactly what the name implies: a marketplace where truckers can find and connect with those who need to ship freight, either regionally or nationally.

It’s a simple concept, and it’s also not a new concept. Many companies have sought an intermediary role in this inefficient marketplace, particularly in the area of backhauls, where trucks often return home empty after delivering a load. And the opportunity is huge: more than 75% of all freight in the U.S. is delivered by truck.

Obviously, Trucker Path has a natural point of leverage in that it can offer this service to its existing base of satisfied directory users. But in another twist I find both significant and smart, Trucker Path is embracing freight brokers, not trying to disintermediate them. Rather than embracing the standard tech playbook of trying to blow up an inefficient industry in order to carve out a position, Trucker Path is simply trying to graft a new layer of efficiency onto an existing market. I would argue they’re trading a bit of potential upside for a radically increased chance of success.

Trucker Path does some other tried and true things such as providing credit, insurance and license data to its marketplace participants, a tested way to increase both value and trust.

Trucker Path is a case study for my long-held view that B2B data publishers in market verticals are well positioned to consider the marketplace model. They’ve got a brand, they’ve got the audience, and they know how to use data (e.g., license and credit information) to create the trusted environment that is essential to driving transaction volume. And despite their noisy collapse after the dot com bust (too much, too soon),  I am very optimistic about the future of B2B exchanges. We all now recognize the value of workflow integration: if you’re enabling the flow of work for an entire industry, you’re obviously in a very good place.

A Review of Reviews

Reviews are important. That’s no secret. Almost everyone uses them now as part of their pre-purchase research. We depend on them. We want them. And in the time and attention deficit world we all live in, we need them to help us quickly make smart decisions.

The basic premise of online reviews can be summed up as "in numbers, truth.” If you have enough people reviewing something, the real answer will emerge. And it will overwhelm all the cheaters, frauds and manipulators who are posting reviews as well.

But in order for a review site to build the volume of reviews, it needs to focus. If you want reviews on all the hotels in the world, you need to stay true to that mission. Same if you’re trying to be the authority on restaurants. There’s always time to expand your scope later, once you are established, known and successful. This is a simple, but key driver behind the success of sites like TripAdvisor and Yelp. If you want people to come to your site to read reviews, you better have reviews to read. And once they’re reading, getting them to post reviews is pretty easy as experience has shown.

That’s why I was puzzled to read recently that a Danish site called TrustPilot had just raised over $73 million in new funding. There must be innovation here, right?

Well, TrustPilot is indeed innovative, but not the way I had imagined. As far as I can see, TrustPilot wants to review every business in the world (and it’s already pushing into product reviews as well). Nothing wrong with being ambitious, but in this case is TrustPilot trying to be too ambitious?

Let’s look at the numbers: TrustPilot currently has about 10 million reviews of 90,000 businesses … worldwide. Further, it’s organized by overly broad categories such as “Services” and “Transportation.” In a nice feature, it ranks the top companies in each category based on their review scores, but in all the categories I examined, I had trouble finding any companies whose names I actually knew. TrustPilot is a great vehicle to post reviews, but as a purchase research tool, it’s a mile wide and an inch deep.

Sure, $73 million buys a lot of growth. But it seems like long odds against TrustPilot getting enough review volume across all its categories to reach critical mass. First they need enough companies to become a real go-to destination. Then they need enough reviews of each company for the truth to emerge.

My review: in a business that depends on volume, don’t start out by trying to be everything to everybody.