How Big Data Has Changed Entrepreneurship
The latest industry piquing the interest of entrepreneurs is Big Data. It is the vast amount of information being collected, analyzed, stored, and monetized in a progressively digital world.
What has led to the emergence of Big Data, and what does it mean for entrepreneurs?
The rise of big data is mainly due to the amount of data being created at an exponential rate. The collective ability of systems, phones, and machines to generate data is greater anything the world has ever witnessed before. In reality, there will never be enough memory or a big enough server to store all of the data ever created. It will continuously evolve.
This data explosion has created an opportunity for entrepreneurs. Every time a new data storage platform is released, it’s typically marks the beginning of a new era. Following the launch there are always first, second, third, and fourth generation companies that mimic the platform and make it better in one way or another.
What trends define Big Data?
There are currently two major movements that have affected big data. First is the monetization of big data. Company’s now have access to massive amounts of differentiated and actionable customer data. However, there are some instances of businesses collecting the data that don’t realize it and don’t know what to do with it once they do. The next big trend for enterprise data could be how to maintain a competitive advantage and at the same time have access to data that no one else does.
The second trend to rise in the world of big data is the regulation of it. We have already seen it in part around privacy and security issues with GDPR and cookies.
Which industry does Big Data have the most effect?
There are very few industries that big data will not impact. However, the most effect has been seen in the advertising industry. Companies can gather real time customer data on purchasing habits and visual funnels to sales. This was never possible before the mergence of big data. Google has famously made its fortune doing just this.
How does Big Data have economic value?
A great example would be what we see a lot of in the insurance industry. Insurance companies have what is called an individual risk profile and it can be worth millions of dollars. The risk profile is essentially a collection of consumer data and carries such great value because those in the insurance world manage their populations according to risk levels. When they can navigate the data and know that a particular population carries more risk than another population, they can better control their pricing.
How can entrepreneurs assess the opportunities within Big Data?
A terrific way to understand big data is to compare it to big oil of a hundred years ago. Data is the new oil in the way that industries are evolving around it much like they did around oil. Personal data has become an economic asset class and businesses are learning to manage their data in the same way they manage their money. This is not a trend that is going to be here for a while and then disappear. Data will continue to grow, and the need to have all of these different kinds of businesses — including some that we’ve never thought of — will be born.