The A.C. Nielsen Company was launched in 1923 with the idea of selling engineering performance surveys – giving birth to one of the world’s first data businesses. Today, Nielsen is still one of the largest data monopolies in the world and continues to be the primary source of audience measurement and business intelligence research across the globe.
What’s most interesting is that the way Nielsen (and other similar traditional data companies) tracks and aggregates data hasn’t changed significantly over the past few decades. At its core, this system relies on a panel-based method – specifically recruiting a large set of people to participate, monitoring their activities, and then weighting the sample to be representative of the broader population.
The result is data that is skewed both by human error (read as lying) and sampling error (who really has time to take surveys or wants to get tracked by Nielsen), but it was the best we could do in a world with limited technology.
With the growth of cloud computing and the resulting decline in storage and compute costs, in combination with the increased availability of passively tracked data – either by inexpensive sensor or API – we’re entering an environment ripe for disruption of these old line data monopolies, which not only includes Nielsen but also other companies such as Bloomberg, Dun & Bradstreet, and NPD (originally “National Purchase Diary”).
While there were a few early companies who decreased the cost of data collection via crowd-sourcing (Euromonitor, Mintel, Data.com, et cetera), we’re at the front of the next wave of opportunity in the space. Learning from the big winners of the past as well as some of our early investments in the space, these are the five lessons for the next generation data platform companies: