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The Business of Data -- A First Example… or Two
Who is the original, quintessential, data-driven business? A number of candidates come to mind. But two of the most obvious, with very different models of how they use data, are Google and eBay. I’m not suggesting that you should be like either company; we’ll come to more everyday possible role models in a later post. I want to illustrate that, despite their reputations as “big data” companies, it’s not the size of their data that matters, it’s what they do with it that drives the business.
Google, as we all know, started out to make searching the Internet work. They were so successful that “to google” was added as a valid verb to the Oxford English Dictionary in 2006. In order to make search faster for users, they began to collect data on who searched for what. And suddenly, a new business opportunity emerged, one that has made Google the most successful Internet business: targeted advertisements. Data collected for one purpose was monetized for another. This is a common pattern in the Business of Data.
But, it’s not the only one. eBay knew exactly how they were going to use data to build a business. Data was the scent that led potential buyer to seller that tracked the purchase price offered through the auction process to the selling price asked. It was this data that enabled a brand new business model in 1995. Of course, a lot more data has been gathered and the model much refined since. But, the model remains largely the same.
And the first Business of Data principle also remains the same. Success comes from novel ways to drive business with data, irrespective of its volume, variety or velocity.