At least once a week I have a pitch meeting with a Founder who says “We’re going to collect a ton of data, it’s going to be really valuable. We’re going to build a data network effect.”
Data is not inherently valuable. Most data doesn’t produce a real data network effect, and most data network effects aren’t that powerful even once established. Consider the idea that your data strategy, in terms of value creation, is overrated. It can be powerful, but it’s typically not.
I know that’s a sobering thought. But in order to build a lasting business, we need to understand the realities and nuances of what makes data valuable.
Let’s lay out what’s exciting and real about data defensibilities.