Companies talking data capital

Last week at Oracle Open World Europe, three radically different companies talked about creating value from data assets. Halldis, a high-end rental property manager, Strands, a fintech services firm, and Retraced, a supply-chain verification company, illustrated the axiom that data is a kind of capital, an economic factor of production in digital goods and services.

With just 1,850 carefully chosen properties in select Italian cities, as well as Paris  and Brussels, Halldis competes on customer experience. This is true for both the owners of the properties they manage and the travelers who stay there. In both cases, the key is data.

Halldis prides itself on offering a wide range of amenities, like chauffeured pick-up at the airport, to make a stay an experience. Keeping track of past preferences for a client is a must. But they also use this data to identify patterns of preferences that inform recommendations to other clients, creating unexpected delight.

Halldis also uses telemetry from smart devices in its managed properties. This can mean bumping up the temperature in a Venetian flat on an unexpectedly cool, damp day. It can also mean monitoring that same apartment for an unusual rise in ambient temperature late in the evening, possibly indicating more guests at the property than expected or even a disallowed party. This sort of anomaly detection on telemetry data walks the fine balance between protecting privacy and protecting property.

Also on the panel was Strands Labs, a fintech company providing algorithmic services to banks and merchants. One of Strands Labs’ services, point-of-sale recommendations, provides an object lesson in data capital.

A merchant using this service has some of the data needed, in the form of the consumer’s current basket of goods. But it may or may not have data on the person’s past purchases. However, the bank that issued the shopper’s credit card definitely does. All this data gets pooled together to feed the recommendation algorithm. In some cases where multiple datasets are crucial to the service, Strands Labs uses a revenue-sharing agreement, a clear testament to the fact that the value of the service is dependent on the data that feeds it.

The third company, Retraced, a supply-chain verification firm, is an even more illuminating example of data capital at work. Retraced provides a blockchain service which brands and consumer-goods makers use to verify their products are sustainably sourced.

For example, a fair-wage workshop can provide documentation like a wage contract and have it tokenized on the blockchain. A brand can then offer an immutable ledger of evidence of fair-trade practices back to the first links in its supply chain. Retraced says some suppliers have realized this kind of transparency allows them to differentiate themselves from their rivals. This is an excellent example of what Michael Porter, godfather of competitive strategy, calls shared value. The minting of data capital through digitization of previously analog activities makes this value creation possible.

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