Data Dependency Risk

Anand Sanwal shares insights about data business risks and success factors, drawing from his experience building CB Insights. He emphasizes that data itself isn't inherently valuable - it's what you can do with it that creates value.

Key Points:

• Three Critical Factors for Data Businesses:

  • Edge: Define what competitive advantage the data provides
  • Collection Feasibility: How you'll gather the data
  • Opportunity: Size and potential of the market

• Common Mistakes to Avoid:

  • Don't assume data has intrinsic value
  • Avoid single-source dependency for data collection
  • Don't focus on "nice to have" benchmarking data unless it drives big decisions

• Building Sustainable Data Collection:

  • Start with manual "ground and pound" methods if needed
  • Develop multiple data collection methods over time
  • Avoid relying on "hacks" or single sources that could disappear

• Target Market Considerations:

  • Focus on industries that are big buyers of data:
    • Financial services
    • AI companies
    • Sales/marketing/ad tech

• Value Creation Principles:

  • Data must drive meaningful outcomes for customers
  • Customers don't care about how hard it was to get the data
  • Focus on the edge and outcomes you'll drive for customers upfront

• Business Model Evolution:

  • Start narrow and focused
  • Build multiple collection methods over time
  • Develop workflows on top of data to increase stickiness