A Big Data idea without a Big Data customer is not an innovation, it’s a hobby. Although fancy technologies and sophisticated analysis may be fun to some, strategists don’t concern themselves with hobbies–they concern themselves with innovation. As discussed earlier, offerings and markets are dichotomous components of the same strategic seed. When both are nurtured properly, your strategy obtains abundantly. For your Big Data strategy to be fruitful, you must pair your offering with the right market geography and/or segment.
The big question about markets
In business, markets are primary elements of consideration. Peter Drucker, legendary thought leader on management and leadership, said the two fundamental functions of business are developing products and marketing. As an information strategist, everything else in my mind is a derivative of these basic functions. As information strategy–Big Data strategy to be specific–applies to market determination, we must once again revisit our definition of Big Data as it is applied for competitive purposes: Big data is the massive amount of rapidly moving and freely available data that potentially serves a valuable and unique need in the marketplace, but is extremely expensive and difficult to mine by traditional means. When formulating a strategy driven by Big Data, it’s important to tenaciously adhere to this operational definition, because it’s far too easy to get distracted and pursue a tangent that does not have a competitive purpose. For the purposes of establishing a strategic market segment and/or geography, focus on the valuable and unique need in the marketplace.
When trying to understand the markets to establish for a strategy, the best companies focus their resources on answering the question of valuable and unique need. Although Big Data’s has recently surged in popularity, it’s actually been around for more than a minute, with nascent explorations primarily in the area of marketing. Unfortunately, these initial expeditions have left a tart aftertaste with some early adopting top management. We’ve learned a valuable lesson about Big Data from these early trials. Successful companies let business questions drive big data discoveries; unsuccessful companies ask Big Data to uncover business insights (does anybody remember unstructured data mining explorations?) Don’t fall into the same traps as your predecessors. Begin by asking your Big Data resources to help you understand what is valuable and unique to your markets.
Serving a primary market
Some companies specialize on serving a specific market geography or segment, and build offerings (products, services, and relationships) that meet the needs of their market. For example, as an information strategy consultant, my primary market is strategic business unit leaders of large companies who are struggling to find good information to make solid decisions. This is a very tight market segment, from which I develop intellectual capital, which develops into consulting services and related intellectual property. Markets can also be specific to a geography. Many years ago, my wife and I opened a travel agency in Foster City, California. Like most travel agencies, the vast majority of our business came from locals, so our strategy at that time was to understand the travel needs of the community and focus our travel products accordingly.
For a company that serves a certain market geography or segment, Big Data opens up terrific opportunities to gain insights your competition doesn’t have. There’s never been a better time in history to leverage technology to understand a market. In fact, if your company centers on a specific target market, I strongly suggest you extend your Big Data capabilities beyond strategy, and embrace it as a core organizational competence. As a leader, you don’t necessarily need to understand the details of how Big Data technology garners insights about a specific market; you just need to design the right organization, and ask the right questions.
Start by asking, “What does our market value?” It seems like a simple, fundamental question–because it is. The power of the question lies in its simplicity. Every market has a personality, with a different set of values and beliefs. Market specificity reveals peculiarity: a breeding ground for specialized value. For instance, knowing the wind conditions of Lake Michigan tomorrow is of little value to almost everyone in the United States; however, this information is very valuable to a mariner who lives in Green Bay, Chicago, or Benton Harbor.
Follow up by asking your analytic team, “What is something unique that our market values?” Many people value information; however, a lot of information is easily accessible and free. In the 1980s, stock traders paid an exorbitant amount of money for key financial data on companies–now, anyone can access the same data with an Internet connection and a few keystrokes. When you have information that is valuable and unique, you control the market. You must know your target market intimately and Big Data analytics is an extremely powerful tool for making this happen.
Offering a primary product or service
If, instead of focusing in a primary market, your company focuses on a primary product or service, then the approach for using Big Data is a bit different. Gripcase is an example of a product-focused startup company. Their innovative product design adds great utility for future and existing iPad owners. Although the product was originally designed with two-year olds in mind, the company is constantly looking for new markets that struggle with the same issues (like people with special needs), and can benefit from its innovative design.
Big Data market discovery becomes a purely strategic competence for these companies. The approach is similar to the reverse lookup phone directories that were popular before the Internet age. Instead of innovating for a particular market, your company finds markets for its innovation. As such, the question to ask your Big Data analytic team is, “what kind of people value my offering in a unique way?” As before, it’s not necessary to know how Big Data is able to accomplish this; what’s important is to harness the right talent and skills, then pose the right questions.
The answers your team comes back with give you the opportunity to experiment in markets completely invisible to your current purview. The power to illuminate these blind spots is one of the most exciting rewards of building competence in advanced analytics. Imagine opening up new revenue streams on existing products and services without a day spent on product development. The key lies in developing completely unique and breakthrough products and services, and voraciously searching for razor-thin markets that perceive them as unique and valuable.
An innovative information product, service, or relationship without a market is about as useful as a lawn mower in the desert. To complete your strategic vision, you must identify your markets. Regardless of your driving force, Big Data can play a significant role in synchronizing your offerings with your markets. Take some time today to assemble an analytic team and start finding the answers to critical strategic questions. Once this final stage of your cinematic visionography is complete, you’ll be well poised to accelerate far beyond your competition. Kareem Abdul-Jabbar, world champion basketball player, said the most important lesson he learned from his world famous coaches was–preparation. Intimately knowing your markets prepares you for world-class competitive standing.