Data is not a gold rush, as it is often mischaracterized.
Gold can be exchanged for value in its raw form, as soon as it has been extracted from the earth. More gold is inherently better than less gold, and while what you will receive in exchange depends on the buyer, the carat, and market fluctuations, it’s hard to imagine a context in which gold cannot be traded for significant value. Gold is relatively rare, and difficult to extract. Lastly, gold is not perishable (sure, it has a half-life, but we’re not talking geological time here).
Unlike gold, data’s worth is almost entirely extrinsic and contextual. Data sets are not interchangeable on the basis of volume. Data itself is abundant, yet the right data is harder to come by. Its value is radically variable. A set of data that, say, a company in the IT sector might consider the holy grail – the cell phone numbers of the 500 top-spending CTOs in the world – would be practically worthless to a toy company (unless they chose to sell it to an IT company). And, while data itself is not exactly perishable, data that reflects the world we’re interested in now is more helpful than data indicative of the world as it was – hence the excitement over real-time data and real-time marketing.
Data is a space race.
If brand equity speaks to the advantages of having a familiar brand name, “data equity,” coined by The Economist, is the advantage the right data gives businesses. In the space race, the US and the Soviet Union raced to reach and explore outer space, and famous milestones like Sputnik and the moon landing created ripples of innovation that benefited society in numerous unanticipated ways. Shoe insoles, for example, first appeared in space suits designed for Neil Armstrong and his fellow Apollo astronauts.
The race for data equity may not be as heroic, but it makes a decent – and motivating – analogy.
Businesses are acquiring data that can give them the edge in areas like product innovation, media efficacy, and share of conversation. They are constantly developing means of separating signal from noise, relevant from irrelevant, accurate from inaccurate, authentic from inauthentic. As they break down silos within their organizations, and as data is shared cross-functionally, its value increases by leaps and bounds. And as businesses hire more and more data scientists and analysts (such as Ford’s Michael Cavaretta), and allocate more resources to their important work, their insights improve across the board – timelier, more reliable, more predictive, and more actionable.
The space race was guided by a commitment to a then-radical achievement. On May 25th, 1961, President John F. Kennedy declared:
“I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.”
In the race for data equity, what is your company’s moon landing?
It should be audacious enough to alarm your skeptics and budget hawks, and inspiring enough to motivate your visionaries to do the best work of their lives. I hope you’re as excited as I am.