Why Wall Street Loves Data Startups

Are the data startups chasing rainbows? Laurent Ohana, chairman of Parkview Ventures, a merchant bank focused on technology ventures, doesn’t think so, and neither do many of Wall Street’s biggest venture capital firms. According to Ohana, whose company is presently facilitating funding for several data-driven startups, the ubiquity of personal data through social media has created a new landscape for American business, forged as much by consumer-data optimization and insights as ROI.

“We’ve reached a point where it’s extremely cost effective to listen in on social media conversations, analyze them for a commercial purpose, and then extract and distribute the inherent value,” stated Ohana. Operating on this data-driven landscape, American business is beginning to hold consumer insights as not only currency, but as the architecture of commerce itself: defining product lines, digital campaigns and the public identity of the brands themselves, according to Ohana. Consumer segments are now defined by their digital conversations, such as as online brand-consumer interactions, social media posts and online affinities, rather than their demographic categories.
Data now serves as “essentially digital paper, with the ability to record, share and present analysis on consumer insights” to brands willing to “pay a premium for  data-driven insights,” stated Ohana. Data startups, Ohana believes, are the equivalent of paper manufacturers in the pre-digital age, providing the basic tool that enables virtually every aspect of modern commerce. The ability to provide granular consumer insights is the digital ink providing meaning to vast quantities of raw data holding virtually no value, like blank paper, without an effective mechanism to interpret insights.
Ohana believes many startups will fail, but those succeeding will manifest an ability to “create a derivative product of consumer data aggregation offering original and truly enlightening insights” not simply another take on data mining. “Companies providing rare, actionable insights not found on every other platform will grow and corner the market, ‘me too’ companies will implode,” said Ohana.
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