How do you build a business from open data? This was the question that we had on our mind as we recently took part in the Open Data Institute’s Training Day. As a start-up we are always on the lookout for new solutions and examples from the real world. The more we learn, the more we adjust our focus. As the Training Day drew closer, we were excited to learn more on the topic.
Some of the things that we have been wondering and also discussing about are the different terms that get thrown around — data, intelligence, information, insight. They all sound the same and in some context are used interchangeably. However, putting these terms into a framework really allows to get a firmer grasp on the topic.
A helpful way to think about it is along the spectrum of how much value is added to the data. What I mean by this is how knowledge or context by a person or by a company is being added to the data. From the very basic first layer point of view data can be just categorized as raw data. Essentially facts about certain events that have happened. An example of this can be weather data — daily temperature readings from a specific airport weather station.
Next up when moving up along the value-adding spectrum is information. Information is data that has been processed. This means that the data has been organized or cleaned up or made easier for a person to access. An example of this could be statistics data. It contains facts that have been presented to the user through a categorized and understandable view.
The third level in the spectrum is insight. This is when the information is made relevant for the user. In most terms this constitutes as research on a particular topic, say, the market size for tablet computers. As you notice the more specific answer is given to the user’s question, the more value it has.
And the fourth level is intelligence. This is work that is done specifically for the user. For example, doing a report on the growth of the tablet computer industry during the past 3 years across US, Taiwan and Germany. This intelligence report will answer a very specific question about the tablet computer market and as such a lot of value is added to a variety of data sources — interviews with industry representatives, competitor and market analysis etc.
These four levels are a powerful way of understanding the ways in which open data can be used for building a building a business. The more value is added to the data the more customers are willing to pay for it. How to implement these topics will be discussed in our next post.
Credit to Ian Makgill from the Spend Network on conducting an excellent lecture and opening up these topics.
