We’ve already spent some time discussing the kind of partnerships where a small, innovative firm wants to partner with a larger one to create new value and drive growth. Many times, this is how the smaller business gets its foot in the door, and (together, perhaps, with a channel agreement) first is able to get to market with customers. But there’s more to the story than simply setting up the agreement. Instead, you need to secure certain rights if you want to be more than simply a junior partner in the arrangement.
User Growth and Reporting
Innovators need access to rapid user growth and reporting metrics from their platform partners. This helps those innovative data suppliers to learn how best to market, sell, and support new partners, based on how existing platform users are using thee suppliers’ data. Each sector and industry may approach their new dataset from a different value perspective; political organizations have different needs from financial investment firms.
For this reason, it is vital in an innovator data partnership for the smaller firm, the source of the data, to gain access to user metrics and reporting from platform partners. The insights from this data are critical as they seek to grow their business and build out their products. The contract between the companies should describe reporting requirements, including an outline of the fields that will be provided to the data supplier. Ideally, the platform company should provide a reporting API that shows usage over different timeframes. The data supplier can justify this reporting as the benchmark by which both parties will value the relationship going forward.
Because of GDPR, CCPA, and various other upcoming laws in the United States affecting data sharing, consider privacy when requesting usage data and reporting. The more personal data you have, the more obligations you have to protect it. For that reason, it’s often better to request anonymized or aggregated data measures rather than full access to names, company employees, and email addresses. Increasingly, access to that level of personal data carries significant risks and generates additional privacy requirements.
To cut back on those risks, you can limit usage data, client access, and customer identities to company names or even aggregate measures across sectors, industries, or client types. It may be enough for a smaller innovative company to receive daily or weekly reports that outline the total number of views, downloads, or App requests from a larger platform distributor. Have a very clear understanding of what data you need, or what data your partner needs, for the use cases you’ve outlined or the value proposition you set. If a dataset contains personal data doesn’t that doesn’t serve those purposes, don’t acquire it. Knowing what features are working, which datasets are most interesting, and which data points are selling the fastest may be far more important to the long-term success of your data sales than the actual identity of each person accessing the data.
Permissions and Protections of the Data Assets
Most data platform providers have highly sophisticated permissioning systems that regulate users’ access to content. Think of these systems as gatekeeping tools that identify which customers have access to your innovative new dataset and which customers haven’t yet paid for the data. Throw in “trial-periods,” special offers, bundles, and cancellations, and you will see a massively complex architecture designed to protect both your data and the overall platform itself. Just as your cable television or internet package has hundreds of different SKUs for premium channels, sports, international, children’s programming, and triple-play packages for phone, internet, and television; your data distribution partner’s platforms are similarly complex.
The good news is that these platforms tend to offer a lot of flexibility. As the smaller, innovative firm, before you sign the contract, it really pays to get to know the permissioning platform well. If you have an excellent understanding of partners’ permissioning and protection philosophy, you can build specific requests into the contract to ensure a more successful adoption by the sales and account manager teams. We’ve unfortunately made this mistake in the past, where a data partner’s content was truly outstanding, but the packaging and permissioning was done in a less-than-ideal way where the discoverability of the data was inhibited by bad categorization. This eventually diffused any excitement the sales team had to introduce the dataset to their clients because the data wasn’t easy to discover and appeared to be about construction costs when it was actually about real estate pricing. Understand the way the gatekeeper software works and optimize carefully how customers will gain access to your data. Internal champions can help with this.
Go beyond the permissioning system and include usage reporting and auditing rights in your contract. Beyond the reporting data described in the previous section, you need data audit rights to verify that your distribution partner is living up to their end of the deal. Unfortunately, the more complex it is to access your data on the platform, for example, as a part of a bundle dataset, the more complex it is to track usage and access. Additionally, you’ll want access to the documentation at these firms regarding employee access and usage. Too many contracts essentially ignore this concern, or worse, they get full access rights for their employees or operations personnel so as to give them an umbrella of protection to operate however they deem appropriate. Avoid this leaky bucket. Understanding what can be accessed, by whom, and for what purpose is a critical add to any data partnership deal.
Don’t overlook promotion as a negotiating point in the contract. It is too easy to get caught up in the potential of a major data partnership without recognizing that promotion details can make or break them, which is why planning and follow through are crucial.
Large sales and marketing platforms with seemingly limitless distribution will often make promises that stretch beyond their ability to deliver. Remember, every dataset under the sun is trying to leverage these platforms and app markets to connect them to potential users. The result is often disappointing. In the beginning of 2018 there were over 2 million different apps in the Apple App Store, and over 3.8 million apps available in the Google Android ecosystem. The reality is that most app markets or large-scale data distribution platforms just can’t attract enough downloads of individual datasets to generate significant revenue for smaller innovative companies without proper promotion. Building promotional elements directly into your data partnership agreement is the key to unlocking the potential of these platforms. Without this, you might spend a lot of time on the legal contract and integration effort only to end up in the data partner “graveyard” that every major platform has but doesn’t like to admit exists.
From webinars to joint email marketing campaigns, you need to outline specific marketing ideas and include them in the contract. Consider your dataset and the target audience. While a Bloomberg terminal or Thomson Reuters platform has lots of potential user types, you can identify which of those are most appropriate for your dataset and focus promotion on those groups. This could mean focusing on portfolio managers over traders, or research analysts over trading operations managers. Once you have identified the right audience, your requests for promotions in the agreement will appear more reasonable to the larger platform provider.
Ultimately, while larger data distribution providers are interested in having more data on their platforms, they don’t have the resources to promote each one effectively. Before signing any form of partnership, work out the promotional materials, cadence, and guaranteed effort that you both will put into marketing the new dataset.
The other obvious benefit to this approach is that the salespeople at the larger platform company will be the first to consume the story about your data and will give you solid feedback on whether they see the pitch delivering or not. That kind of internal analysis is a key tool for developing the power and usefulness of your pitch. Any data partnership can be tricky, but by ensuring the kind of follow through we’re outlining, you can give your company a much better chance at success. These steps are also the key to ensuring that your partnership allows your innovative, different approach to data and product development is an actual component of a business strategy, and not just a meaningless buzzword.