February 23, 2011
There is alot of hype swirling around these days about the big platform shifts: social, local, mobile, cloud, it’s all transforming the web as we know it, we hear just about every day now.
I buy into alot of the hype. Each of these is a bid deal in its own right, and the four together feel more like a tsunami than a wave.
But one trend that I don’t hear nearly as much about is at least as important as those four: the rise of data as the killer differentiator for Internet businesses. Sure, social/viral customer aggregation is changing the rules, and yes every web business needs a mobile strategy, and of course everything is moving to the cloud. But, if you ask me, the line between the winners and also rans of this generation’s startups is going to be drawn according to who really and truly understands data, and uses it to their own and their customers’ advantage, versus those who only give data lip service in fundraising pitches.
Most entrepreneurs we meet with these days are at least smart enough to pay homage to data being a key longterm asset. But I am not convinced many of them really are capable of executing on this. I’ve been fortunate to have a front row seat from which to appreciate both the challenge and power of leveraging data. For three of my current portfolio companies, data is the single most important strategic asset contributing to their success. And in each instance, major investments in infrastructure from the outset, a near maniacal passion for analyzing data, and some pretty crazy math chops, are key aspects of the companies’ culture and strategy.
While you should certainly include that data slide in your fundraising pitch, first ask yourself whether you’ve really made it a priority>