Companies Replacing Gut Feelings With Big Data

NYC-based fund IA Ventures just announced that it raised a $105 million fund focusing on “companies that create competitive advantage through data.” Startup Visual Revenue, which uses data to predict how long an article should appear on the front page to optimize performance, is one of the companies IA Ventures has already funded. Visual Revenue is only one in a wave of new startups that are aiming to solve the problem of managing these huge data sets, and providing it at a price even small companies can afford.

Most business intelligence solutions require large IT teams, clusters of servers and costly databases to organize and analyze the data they gather. As more data accumulates, more problems can arise and costs increase. Walmart may be able to process its one million transactions per hour and spend millions to analyze the data to predict trends, pricing, repeat customers and more, but not all small businesses have the resources to do the same. Analyzing that data gives companies a serious competitive advantage, but requires a hefty budget. The problem certainly isn’t generating the data, but transforming the data into a digestible form. By the time many of these large data sets are distilled, the data isn’t relevant anymore.

Groupon recently acquired e-commerce startup Adku, which provides more relevant and personalized shopping experiences. It personalizes a users’ experience by providing product suggestions from Zappos, eBay, and Amazon using data such as location and shopper trends. Adku was launched at an AngelPad Demo event in 2010 by three former Google engineers. The startup, which has funding from Greylock Partners, Battery Ventures and True Ventures, hasn’t quite made it clear how Groupon will utilize the targeting technology. Groupon has a large user base and Adku has the tech. With Groupon expanding into selling goods with Groupon Goods in addition to Groupon Now!, Getaways and the popular group buying deals, utilizing big data will help them tailor deals to their audience.

Victoria, B.C.-based Terapeak recently recruited Kevin North as CEO to help the company establish a strong presence in the Bay Area with the ever growing market for big data analysis. Terapeak exclusively provides insight on a company’s competitors on eBay. Using data aggregated from eBay, Terapeak was able to determine in an example its capabilities by showing that a pig figurine would sell for 360% more in the Pottery & Glass category than Collectibles. Companies can get a look into the last 365 days of their listing data including selling prices, the best pricing, time of day for sales as well as additional features. Terapeak also offers data of a competitor’s selling prices, the average selling prices, and performance. The analysis is provided for under 30 dollars, while only years ago it would have cost thousands from a high-paid consultant or expensive proprietary system.

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