The data industry is shutting out start-ups from accessing rich information, but venture businesses may end up as the solution to their own problem
Although a divisive topic, to say the least, the gathering, buying, and selling of data has formed an industry with global staying power over the last few decades. Digital technology has allowed for the rapid expanse of data collection, making rudimentary pre-internet methods pale in comparison to the reach and staying power of even singular players in the data brokerage field.
It is no small truth then that the future of the data industry seems to be one of bountiful prosperity. With a cautious estimated global net worth totalling in at around 200 billion earlier this year. A figure that, if past trends are any indicator, will continue to grow exponentially as the world marches further into the 2020s.
Large corporations rely on data brokers to direct their sales campaigns and to dig deeper into what consumers want or don’t want from the products and services they engage with every day.
Which is why millions of highly sought-after digital profiles, all packaged neatly into ‘audiences’ change hands every year. Bought and sold between big businesses looking to take the competitive edge in their respective market by using the huge amount of sway that strategic data offers them.
And these same corporations are the reason why start-ups are struggling to get a seat at the data buyers table.
Lacking the buying power to compete in a market is something that start-up companies have always had to deal with, lest they cease to operate entirely. Traditionally then the onus for venture businesses was to innovate on what they can’t source in the same capacity as a large-scale organisation. Then, if that wasn’t possible, their focus would shift to capitalising on different streams of potential growth by taking the paths that bigger companies may have missed.
But the inconvenient truth of walking the road less travelled is that to make truly informed decisions before taking the plunge on an endeavour, venture businesses require that ever so desired commodity, data.
Which makes many start-ups vulnerable to changes in both the availability and cost of good quality data that they can act on effectively.
Data collection and refinement is neither a simple process nor an open book within the industry of data generation. In fact, the process by which data brokers create these audience profiles, and the way they are eventually sliced up for sale to individual clients is something the industry has kept mostly shrouded in shadow.
Therefore, the problem for start-ups looking to get the data they need to operate successfully is twofold.
Firstly, as laid out above, start-ups are forced to buy in an overwhelmingly competitive data market that’s ruled by big corporations with a stranglehold on the division of data. Which makes not only the process but also the price of acquiring data simply too high for many venture businesses to get a proper foot in the door.
Secondly and possibly most glaringly, the root problem is that start-ups are often looking for very specific audience data, and current data generation methods may not properly account for this need.
The start-up industry is the realm of niche businesses providing niche products and services, which places a necessity on the data they use to be both specific and of good enough quality to action with confidence.
This is something that larger corporations rarely think about, as broad scope data profiling is the bread and butter of mass marketing campaigns that seem a world away from the smaller operations of venture businesses.
The obvious and most commonly cited counterpoint to this fact is that start-ups should be generating their own data, but this isn’t always possible.
As already mentioned in this article, generating large audience profiles is no simple process, requiring specialised tools and methods to achieve even passable sets of data. However, the smaller scale and venture-funded nature of many start-ups make collecting large tracts of data nearly impossible to balance with the other demands of running a venture business.
But all hope is not lost, as the industry is becoming ripe to have its own venture founded data collection outfits soon enough.
As with all systems born in the digital era, the data industry is now decentralising, and with this changing structure comes the potential for start-ups to begin founding their own data collection industry.
Small scale data collectors are already beginning to pop up as businesses of all sizes begin to lament the influx or ‘poor quality data’ and express their want for downsized audience profiles that are tailored specific to their needs. Venture businesses are the perfect fit for this niche data revolution and no doubt as the tools and mechanisms for collecting data become more available, start-ups will begin helping other start-ups finally get their rightful seat at the table of data dissemination.
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