Big data’s day has come: it dominates headlines and business conversations alike. As industries coalesce around it, the conversations surrounding big data (benefits, issues, challenges) are changing and maturing. Venture investors who typically look over the horizon for opportunities are accelerating their investments in big data. But there are a few considerations that must be taken into account before investing in startups that develop big data technologies and solutions.
Venture investors will analyze three considerations:
Consideration #1: Business is waking up to the value of data to solve strategicproblems. In recent years, publications like The Economist and The Wall Street Journal — even the BBC — have talked about data as “the new gold”. Corporations from many industries including consumer packaged goods, health care, financial services and retail have been collecting data for years and have developed an interest in data/analytics. Few companies in these industries were able to apply such analyses effectively, addressing some of the strategic problems they were facing such as fraud detection around new payment methods, supply chain optimization and yield optimization. More recently, additional industries like automotive, agriculture, pharma and logistics have started waking up to the importance of big data analytics in effectively addressing some of their vexing strategic problems such as autonomous driving, crop optimization and personalized medicine.