With the endless stream of lofty writing about the grand potential of “big data”, I’m always more impressed with tangible examples of how it’s used to solve real life questions in ways that are unusual and innovative. A prime example of this is seen in how sophisticated investors are using public data from reviews, social posts and crowd sourcing to make better investment decisions. A recent Fishbowl acquisition, Czar Metrics was on the forefront of using new data in helping Private Equity investment diligence processes. A few years back they parlayed their curiosity and analytical expertise into a simple look into the top 30 most exciting emerging restaurant concepts. Czar Metrics analyzed 300 million restaurant-related tweets, 2.6 million Foursquare records, including check-ins, comments and reviews, 1.3 million reviews from 42,000 restaurants across multiple review sites, 15,000 blog posts and 9 million restaurant-related Facebook posts. In their second and third iterations it was deemed noteworthy enough to be picked up by CNBC as their “brands to watch”
But beyond being fun and interesting, how meaningful were their predictions? Yesterday’s investment in Mendocino Farms (our 2015 #1 pick) by WholeFoods speaks volumes about the power of this new breed of research and insights.
Looking farther back to prior emerging brands picks, we see further validation with names like Shake Shack, Pizza Rev and Blaze Pizza which also appear to have been validated in meaningful way by the capital markets. Interestingly, the approach employed huge volume of data from various sources that anyone could access, but only a rare combination of data science and domaine knowledge could bring to insights and action.
While so much of the world is still using social media only as a messaging vehicle, we have harnessed it for robust research and insights. While terms like ‘Big Data’ waver from the hype cycle, we recognize that it’s using data in unexpected ways and actionable insights that produces value. ‘Big Data’ alone is just a big expense, but when leveraged for tangible insights and real action the payoff can be astounding. It is truly one of the most remarkable developments of our time.