Kirk Klasson

Big Data: Sis, Boom, Bah!

Time for More Predictions…

Well, it’s that time of year again, Q4’s are closing, burn rates are burning, time for more predictions.

One of the biggest trends in 2015 was collectively referred to as Big Data, Business Intelligence and Predictive Analytics. The analysts love this space and some have called it the biggest thing since the Internet. Makes sense since most of the data they plan on analyzing is sourced from, wait for it, yep, the Internet. Page views, click streams, social media chatter, twitter feeds, telemetry from kitchen appliances, a veritable tsunami of data is pouring over the gunnels of the modern enterprise. Even as I write this, your very own data scientists are busily modeling the motion of a starling murmuration even before it happens. Simply amazing. You gotta see this stuff to believe it. Odds are you’re gonna be buying some birdseed.

I’ve always found the venture community’s fascination with Predictive Analytics to be somewhat curious. Ever wonder how those seed round conversations go?

MoU Venture Capital: Could you summarize for us your value proposition?

Acme Predictions: Sure. We have perfected an algorithm that can ascertain with 99% accuracy what you are about to buy and when you are about to buy it.

MoU Venture Capital: So, without sharing any trade secrets, exactly how do you propose to do that?

Acme Predictions: We have developed a proprietary neural network that can analyze over a thousand copy-righted variables.

MoU Venture Capital: That’s impressive. Do you really need a thousand variables to make an accurate prediction?

Acme Predictions: Not always. Most of the time it just boils down to your birth order and your zip code.

MoU Venture Capital: I see. Well, since your business model is predicated on making predictions, can you predict who will be buying your product and how fast your revenues will grow?

Acme Predictions: Not exactly. But if you read our prospectus you’d know that our plan is to sell out to IBM before we actually have to acquire any customers.

MoU Venture Capital: Brilliant! We’ll be sending over the term sheet later today.

According to Computer Reseller News in 2015 there were 54 Big Data/Business Intelligence firms and another 45 Predictive Analytics firms of one stripe or another. An appreciable percentage of which were relatively new to the market and built on top of the usual open source suspects, Apache, NoSql, Hadoop, etc.

At the same time, we are experiencing a growing consumer reaction to the use of personal information without explicit consent. Ad blockers on mobile devices are growing at an ever-increasing rate (see Who’s Zoomin’ Who – October 2015) by some estimates faster than the Predictive Analytics segment. Further, the Do-Not-Track initiative is gaining steam and the EU is about to shut off the data spigot with the rationalization of privacy laws under the General Data Protection Regulation due out in 2016. So one has to wonder where all that data is going to come from and how accurate predictions are in the absence of a reliable and comprehensive flow of data?

Years ago I had the opportunity to hear a CEO frame his strategic challenges and it went a little bit like this:

While we are well positioned to be a leader in our chosen markets, we can’t ignore the fact that we are faced with a situation where we have too many vendors with too many offers chasing too few prospects.

Beginning to seem familiar?

So, in the spirit of making predictions, here’s mine:

In the words of the immortal Carnac!

“Sis Boom Bah”, y’all.

What is the sound of a market imploding?

Graphic courtesy of The Tonight Show Starring Johnny Carson 

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