Successful business people are successful risk managers. They identify the weak spots in their market, value proposition and solution (be it a service or widget), and triangulate the best path forward.
Not enough sales coming in this quarter? Perhaps your price point is too high or your marketing is not resonating with your target customer. Margins decreasing? Perhaps your COGS is growing disproportionately fast compared to revenue, or customer churn is hurting your lifetime value assumptions.
Leaders constantly ask these hard questions, and they know that the key to answering them is good data. Whether it be proprietary data, external data, or informal data gathered from interviews and mentors, the answer to any business question is ultimately dependent upon data being available, reliable, and properly contextualized.
So, when new data comes to light, you can imagine how business people near and far jump at the opportunity to understand their business anew, and find new opportunities and new success.
“Open data” represents just this opportunity. Open data is standardized, publicly-available information that a recent McKinsey report suggests will unlock $3–5 trillion in annual value.
That’s the equivalent of adding an economic engine the size of Japan, the world’s third largest economy, into the global mix. That’s transformative, particularly for entrepreneurs who are building businesses based on “big data” and “open data.”
What’s more exciting, particularly for social entrepreneurs, is that this data enables new questions to be asked, new businesses to take root, and new solutions to be found to old problems.
One of the best examples of this phenomenon is a San Diego company called Measurabl (full disclosure, I’m an advisor to, brother of, and believer in the founder, Matt Ellis).
Measurabl helps companies quantify their exposure to climate change using a TurboTax-style online reporting wizard, allowing operators, investors, and consumers to make informed decisions. Open data and data standards power their platform—without this data and these standards, Measurabl would not be possible, and firms like Nike and Coca-Cola would be at a loss for how to manage their environmental risk. Instead, using services like Measurabl can help them understand risk and turn it into opportunity.
Open data represents a sea change of opportunity that creates new ways to build businesses, redress pressing global problems, and democratize problem-solving worldwide.
As world leaders internalize the accelerating threats of climate change, pandemics, and other global risks, they are quickly realizing that disseminating information is one of the best ways to combat them.
In doing so, they are not only acting in their own self-interest and better managing these risks, but demonstrating that sharing information can create enormous economic opportunity for all. It’s a classic “win-win,” all made possible by open data.