Remember that kid in school who thought collecting every Pokémon card would make them rich? Turns out, having a single holographic Charizard was worth more than a mountain of common cards. Welcome to the world of data company valuations, where bigger isn’t always better, and sometimes less really is more.
Size doesn’t matter (at least not as much as you think)
After shepherding multiple companies through successful exits, I’ve learned that data is a lot like your grandmother’s antique collection – it’s not about how much you have, but whether anyone actually wants it. The “bigger is better” mantra that once dominated big data discussions has aged about as well as MySpace.
Let me share a tale of two companies that perfectly illustrates this point:
- Company A was the data hoarder, proudly sitting on 500 million patient records (think a digital version of that neighbor with 50 cats
- Company B was the specialist, focusing on just 50,000 rare disease patients (think curator of a boutique collection)
- Plot twist: Company B sold for 3x the multiple of Company A. Talk about David beating Goliath!
The “Will anyone actually use this?” Framework
Through years of watching companies navigate the data marketplace (and occasionally crash into the walls), I’ve developed what I like to call the “Will Anyone Actually Use This?” framework. Here’s how it breaks down:
Strategic alignment score (or: does anyone care?)
- Does your data solve real problems, or is it just digital hoarding?
- Are you riding the wave or missing the boat on industry trends?
- Can you explain your unique value without putting people to sleep?
Operational readiness (or: is this data a hot mess?)
- Is your data clean, or does it need a digital shower?
- Can your systems handle growth, or will they crash like a computer running Windows 95?
- Are you privacy compliant, or are you one news story away from disaster?
Monetization potential (or: show me the money!)
- Can you turn this data into dollars, or is it just taking up expensive storage space?
- Have real customers actually opened their wallets?
- Is there genuine market demand or just wishful thinking?
Common pitfalls (aka how to avoid face-palming later)
The storage fallacy
Just because you can store it doesn’t mean you should. Your data lake shouldn’t look like a digital episode of “Hoarders.”
The integration oversight
Raw data is like uncooked ingredients – there’s a big difference between having them and being able to make a gourmet meal.
The privacy paradox
Collecting sensitive data without proper governance is like juggling nitroglycerin – exciting until it goes wrong.
How to actually make your data valuable (no magic required)
Start with use Cases, not collection
Before you start vacuuming up data like it’s going out of style, ask yourself: “What am I actually going to do with this?”
Invest in data architecture early
Think of it as building a house – it’s better to have a solid foundation than a fancy roof that might collapse.
Quality over volume
Would you rather have a thousand pennies or a $100 bill? Exactly.
Create clear monetization paths
Having data without monetization plans is like having a car without gas – you’re not going anywhere.
The Future of Data Valuations
The market is getting smarter (finally!). Companies are realizing that having the biggest data pile on the block isn’t as impressive as having the right data in the right place at the right time.
The bottom line? Stop trying to be the Wikipedia of your industry and start being the specialized expert your customers actually need. In today’s market, being a data hoarder is about as attractive as being a regular hoarder – it’s time to Marie Kondo your data strategy.
Remember: If your data doesn’t spark joy (or revenue), it might be time to let it go.
Need assistance doing a deep dive on your data strategy? Reach out