The Growing Demand for Alternative Data
Or Lenchner, CEO of Bright Data - an industry leading SaaS platform for online data collection and structuring, talks about why transparency is a mission-critical element to data-driven organisations, the increasing importance of alternative data, and why he credits surfing to helping him guide his decision-making through erratic market shifts.
Tell us about your journey in the tech sector and how you ended up at the helm of Bright Data?
I began my career initiating and founding several web-based companies, but once I met the founders of Bright Data, I was so intrigued by the company and its web-transparency goals that I had to join them. They really spoke to my ideas, so I quickly sold all my companies and joined them as a product manager. I then advanced to become the vice president of the product department before becoming their CEO. For the last couple of years, the company and the data domain have grown exponentially. We had a singular goal – to make the largest database source accessible to all.
In fact, during the past year, public online data has proven to be the only source of information that is fast and flexible enough to provide a reliable market, industry, or consumer-based snapshot. For example, we ran a survey together with Vanson Bourne, and found that nearly one in four financial services professionals use insights from external data sources every day. This is a huge testament to the role online data plays even in one of the most traditional market sectors.
What does Bright Data do? Why is transparency core to what you do?
Simply put, the Internet has become the world's largest database. To tap into it, companies and organizations use Bright Data's SaaS platform to collect large amounts of unstructured data and transform it into structured data. This data allows business decision makers in various sectors to get up-to-the-minute data that leads critical strategic planning and mission-critical moves. Bright Data has thousands of customers, including most of the large online commerce, finance, security and travel firms that benefit from near-live data insights, allowing them to understand and act on the latest decision-making factors. As we all know, the Internet is not transparent to all in the same way. We provide that vital transparency.
Moreover, when it comes to running and managing such a mass-scale operation, transparency must be at the core of what any data company does and must lead it in every aspect of its business. Transparency must be well imprinted into an organisation's technology, methodology as well as the company's DNA and culture. Our customers and market expect us to always demonstrate trustworthiness, and transparency is the only way to do so.
We need to talk about alternative data. What is it and what role does it play in the tech space?
Alternative (alt) or external data is a subset, driven by the growing demand for real-time, on-the-spot insights. While all industries can benefit from analysing alt data, tech startups really have a heightened need for it, since their decisions and future innovation involve product development and future market trends. Startups by their very nature are structured in a way that disrupts a market. But to really bring something unique and disruptive to saturated markets, entrepreneurs must perform comprehensive market research.
Alt data can help examine USPs, for example, by aggregating similar solutions in your industry that are currently being invested in by Venture Capitalists (VCs). Finding similar companies trying to solve similar consumer pains can allow you to see who you will be competing against in the future. Alt data can also help in making the right kind of investment-focused decisions. During the past year, more and more hedge funds have increased their use of online data to anticipate future market shifts as well as tune their investment strategies accordingly. Our latest survey with Vanson Bourne, which I mentioned earlier, clearly reflects this. In fact, 64% of organisations that rely on alternative data sources when building business strategies say that alternative data impacts their investing strategy. To stress this point further, 80% of those surveyed expressed that they require more competitive insights from alternative data, and 79% hoped to get information on customer behaviour from the data. So, the need and the demand for alternative data is definitely growing, and rapidly so. I expect that to continue.
How would you suggest to any organisation from any sector wishing to start collecting online data to go about it and build their data-driven strategy?
Like with everything in our operation, I advise companies, enterprises or strategic startups to start small and then expand. Make sure the data you wish to reach will precisely address your goals, validate it and then expand. Yes, today's online data collection relies on smart automated tools, but you want to make sure you get it right manually first before automating it.
We're intrigued to find out more about your other big passion besides data, surfing. How has that helped you react to major market shifts?
Any CEO of any company faces unexpected challenges. In my experience, surfing helps with sharpening your ability to deal with the unpredictable. In surfing, you always need to be aware of rapidly evolving changes in the ocean. It also helps in forecasting and forcing you to form a new plan of action to be on top of them. Before hitting the waves, surfers check synoptic maps, the wind direction and power, swell direction, and more to increase the chances of finding that perfect wave. I find that this method of macro thinking also applies to the business world.
And, lastly, to successfully deal with changes in the ocean that are sometimes life-threatening, you need to remain calm. This situation is very similar to business disruptions we're seeing in today's erratic market – we have all been there. The only way you can ensure that you stay on top of such a situation and make the right winning decisions is by remaining calm, sharp, and collected and by following a well-defined strategy. This may sound clichéd, but it always works.
Lastly, what is a start-up segment / company that you are focusing on following in 2021?
I'm a big fan of the platform Twitch. Their clear and responsible guidelines are a true source of inspiration for me. They recently took on the fight against ‘fake engagement pandemic' and realised that this source of activity generates significant amounts of fake views and other types of engagement, which also causes AI machines to be fed with the wrong type of data. I think they are on the right track, and I wholeheartedly support and follow their direction of comprehensive, responsible conduct.
To learn more about why Bright Data (Formerly Luminati Networks) is taking the next step in its journey to deliver valuable online data to organisations and further support the data collection industry, click here.