Selling the Data Businesses Need to See What Is Coming
Companies that collect and sell weather, risk, and other predictive data help businesses plan for what they cannot control. The value is in data that reduces uncertainty about the future, sold to those who must plan around it.
Selling a View of the Future
Businesses must plan around things they cannot control, weather, risks, and other future conditions that affect their operations, and companies that collect and sell predictive data help them do so. A retailer planning inventory, a farmer planning planting, an airline planning operations, an insurer pricing risk, all need to understand what weather and risks are coming, and data companies sell them this information to reduce the uncertainty they must plan around.
The value is in data that reduces uncertainty about the future, letting businesses plan better for what they cannot control. By collecting, analyzing, and selling weather data, risk data, and other predictive information, these companies help businesses anticipate and plan for future conditions, reducing the costs and risks of uncertainty. The data is valuable because it improves decisions that depend on future conditions, and businesses pay for it because better anticipation of weather and risks improves their planning and reduces their losses, making predictive data a valuable product sold to those who must plan around an uncertain future.
You cannot control the weather or the risks, but you can plan for them if you can see them coming. That view of the future is the product, sold to everyone whose business depends on what happens next.
Who Needs It and Why
Many businesses depend on future conditions they cannot control and value data that helps them anticipate and plan.
| Business | Why it needs the data |
|---|---|
| Retail | Weather affects demand and inventory |
| Agriculture | Weather affects planting and yields |
| Insurance | Risk data prices policies |
| Logistics and airlines | Weather affects operations |
Retailers need weather data since weather affects demand and inventory, agriculture needs it since weather affects planting and yields, insurers need risk data to price policies, and logistics and airlines need weather data since it affects their operations. Across these and many other businesses, understanding future conditions, weather, risks, and more, improves planning and reduces losses, so the data is valuable. The breadth of businesses that depend on future conditions they cannot control creates broad demand for predictive data, since anticipating weather and risks better improves decisions across many industries, making the data valuable to a wide range of customers who must plan around the future.
Why the Data Is Defensible
Predictive data companies can build defensible positions through the data they collect, the models they build, and the relationships they form with customers who integrate the data into their planning. Building comprehensive, accurate data and the models to make it predictive requires investment and expertise, creating a barrier, and the data becomes more valuable as it is refined and its predictions proven.
The data also becomes embedded in customers planning, since a business that integrates predictive data into its decisions comes to depend on it, creating stickiness. The combination of the data and models, hard to replicate, and the embedding in customer planning, creating dependence, makes the position defensible, since a competitor would need to build comparable data and models and displace the incumbent from customers planning. The most valuable data companies build proprietary data and superior models that provide predictions competitors cannot match, and embed themselves in customers planning so deeply that the data becomes essential. This defensibility, from the data, the models, and the embedding, makes predictive data a valuable, durable business, providing information that reduces uncertainty and becomes essential to the businesses that plan around the future.
The Expansion of Data and Value
Predictive data companies grow by expanding the data they collect, improving their models, and serving more of the decisions their customers make, deepening their value and their embedding. As data collection and analysis capabilities grow, from more sensors, sources, and computing power, the companies can provide more comprehensive, accurate, and useful predictions, increasing their value.
They can also expand from providing data to providing insights and helping with decisions, moving from selling raw data to helping customers act on it, capturing more value by serving more of the decision, not just the information. This expansion, from more and better data to helping customers use it, deepens the value and the embedding, making the company more essential to customers planning. The growth of data and analytical capabilities, and the move from data to decisions, drive the expansion of predictive data companies, increasing the value they provide and their embedding in customer planning. The trend toward more data, better models, and helping customers decide reflects the increasing value of information that reduces uncertainty, and the companies that provide it grow by expanding what they offer, from data to insights to decision support, becoming more essential to the businesses that must plan around an uncertain future, which is the growth path for the predictive data business.
The Bottom Line
Companies that collect and sell weather, risk, and other predictive data help businesses plan for future conditions they cannot control, selling data that reduces uncertainty to retailers, farmers, insurers, airlines, and many others whose decisions depend on anticipating the future. The value is in improving decisions that depend on future conditions, and the position is defensible through proprietary data and models that are hard to replicate and the embedding of the data in customers planning, creating dependence. The companies grow by expanding their data and models and moving from providing data to helping customers act on it, deepening their value and embedding, making predictive data a valuable, durable business built on selling the view of the future that businesses need to plan around what they cannot control.