Selling data to people who think they have data

Four months into selling Internet Research Unit, the objection I get is never "we don't have data." It's some version of "we already have data."

They do. Every brand has analytics, every agency has reporting, every app developer has a dashboard, and every investor has a data room. The market is saturated with numbers and nobody feels short of them.

So the sale isn't about supply. It's about a distinction that takes about two minutes to explain and that I keep getting wrong in the first thirty seconds.

First-party versus market data#

Everything a brand has is about itself. Its own revenue, its own conversion rate, its own customers. That data is complete, accurate, and answers exactly one class of question: what happened here.

It cannot answer the question every operator actually wants answered, which is compared to what. Your conversion rate is 2.4%. Is that good? Your growth is 18%. Is the category growing 40%? You're losing on a product line — to whom, and are they winning on price or on distribution?

Those are the questions that change decisions, and none of them are answerable from inside your own numbers no matter how good your dashboard is. It's the difference between a thermometer and a weather report.

What each buyer actually wants#

The four groups buy this for genuinely different reasons and I spent the first couple of months pitching all of them the same way.

Brand owners want to know whether their problem is them or the category. That's the whole thing. A bad quarter means something completely different if everyone in your segment had a bad quarter, and right now most operators have no way to tell, so they attribute market conditions to their own decisions and vice versa.

Agencies want to be right in the room. They're selling judgment, and judgment backed by market-wide numbers is a different product than judgment backed by experience. It also wins pitches — showing up to a new business meeting already knowing the prospect's competitive position is a strong opening.

App developers want to size and target. Which merchants run what, how many of them there are, what's growing. I was one of these people for six years and I made every product decision on intuition and forum posts, which in retrospect is an insane way to allocate years of your life.

Investors want diligence they can't get from the company. When a fund is looking at a DTC brand, the brand hands them their own numbers. What the fund actually needs is whether those numbers are good relative to a market the brand has no incentive to characterize accurately.

Same dataset. Four different products, and the demo should be four different demos.

The thing that makes this hard to sell#

Nobody has a budget line for this. I've been here before — Exposely spent three years selling into a category that didn't have a name or an allocation, and every deal was somebody redirecting money from something else.

The difference this time is that "alternative data" is an established concept in finance. It has a name, a history, and a demonstrated willingness to pay. It's just never been applied to ecommerce in a serious way, which means I'm not inventing the category, I'm porting it. That's a much better position than the one I had in 2013 and I didn't fully appreciate the difference until I was in it.

What I still don't know#

Whether the brand-owner segment will pay enough. The instinct that this is most useful to operators is strong, and operators are the most price-sensitive buyer of the four and the least accustomed to paying for information.

The investor and agency segments have budgets, an existing habit of buying data, and much less resistance. If the business ends up mostly serving them, that's a smaller and more profitable company than the one I described in the first paragraph.

I'd like it to be the operators. I'm watching what people actually pay for rather than what I'd prefer, which is a discipline I learned the expensive way at a company that no longer exists.