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The increasing importance of alternative data

Or Lenchner, CEO of online data collection platform Bright Data, talks about why transparency and ethical data collection are mission-critical elements to organisations, the increasing importance of alternative data, and why he credits surfing to helping him guide his decision-making through the Covid-19 pandemic.  

Tell us about your journey in the tech sector and how you ended up at the helm of Bright Data?

I began my career initiating and founding several web-based companies, but once I met the founders of Bright Data, I was so intrigued by the company and its web-transparency goals that I had to join them. They really spoke to my ideas, so I quickly sold all my companies and joined them as a product manager. I then advanced to become the vice president of the product department before becoming their CEO. For the last couple of years, the company and the data domain have grown exponentially. We had a singular goal, which was to help deliver information transparency to the World Wide Web – and shed a bright light on it, an essential step in almost all sectors. In fact, during the past year, public online data has proven to be the only source of information that is fast and flexible enough to provide a reliable market, industry or consumer-based, snapshot.

What does Bright Data do? Why is transparency and ethical data collection at the core of what you do?

Simply put, we’re an online data collection company that helps businesses and organisations of all sizes gather openly available online data. As we all know, the internet is not accessible to all in the same way. We all see tailored views of the internet. So, Bright Data offers a transparent view of web information or data from wherever you are based in the world. For example, a company may choose to use our product to gain an accurate and reliable perspective of how their own customers are interacting with their brand and competitors’ brands online. To put it in real-life terms, imagine you’re buying a shirt from your favourite e-commerce brand. It’s highly likely that, in order to design the most attractive shirt and set the most attractive price for that particular shirt, the brand used Bright Data’s online data collection products to conduct their market research. Here’s another example from a different sector: Several companies are using online data to reach suitable candidates to make their organisations more diverse. I hope these examples give you a rough idea.

Moreover, transparency must be at the core of what any company dealing with data does and a must-have fundamental guideline. It must be well imprinted into organisation’s technology, methodology and the company’s DNA and culture. As we are all well aware of, data is the most powerful asset any company or individual holds – therefore, you must demonstrate trustworthiness, and transparency is the only way to do so.

When discussing data collection, usually people relate to data privacy. But what about the behind-the-scenes operation – the process, the technology, the methods used – isn’t that just as important? As an organisation, have you defined which cases you are willing to engage in and which you are not? Such questions are at the backbone of any web data collection operation even when dealing with openly available data. I recommend addressing these questions early on to avoid paying a much greater price later. Since the web and the data ecosystems are advancing at such a rapid pace, we learned as an organisation that you must redefine your “red lines” constantly or else you may potentially find yourself on the unethical side of the road.

We need to talk about alternative data. What is it and what role does it play in the tech space?

Alternative (alt) or external data is a subset, driven by the growing demand for real-time insights from legacy sources of data. While all industries can benefit from analysing alt data, tech start-ups really have a heightened need for it, since their decisions involve product development and future market trends. Start-ups by their very nature are structured in a way that disrupts a market in one way or another. But to really bring something unique and disruptive to saturated markets, entrepreneurs must perform in-depth market research.

Alt data can help examine USPs, for example, by aggregating similar solutions in your industry that are currently being invested in by Venture Capitalists (VCs). Finding similar companies trying to solve similar consumer pains can allow you to see who you will be competing against in the future. Alt data can also help in making the right kind of investment-focused decisions. During the past year, more and more hedge funds have started using online data to anticipate future market shifts as well as tune their investment strategies accordingly. The largest banks have also found online data to be a reliable and fast source of information, especially when it comes to granting large-scale loans.

We’re intrigued to find out more about your other big passion besides data, surfing. How has that helped you react to crises and guide your decisions as a CEO during the Covid-19 pandemic?

Any CEO of any company faces unexpected challenges. In my experience, surfing helps with sharpening your ability to deal with the unpredictable. In surfing, you need to always be aware of rapidly evolving changes in the ocean. It also helps in forecasting and forcing you to form a new plan of action to be on top of them. Before hitting the waves, surfers check synoptic maps, the wind direction and power, swell direction, and more, to increase the chances of finding that perfect wave. I find that this method of macro thinking also applies to the business world.

And, lastly, to successfully deal with changes in the ocean that are sometime life threatening, you need to remain calm. This situation is very similar to business disruptions we’re seeing in today’s erratic market – we have all been there. The only way you can ensure that you stay on top of such a situation and make the right winning decisions is by remaining calm, sharp, and collected and by following a well-defined strategy. It may sound clichéd, but it always works.

Lastly, what is a start-up segment / company that you are focusing on following in 2021?

I’m a big fan of the platform Twitch. Their clear and responsible guidelines are a true source of inspiration for me. They recently took on the fight against ‘fake engagement pandemic’ and realised that this source of activity generates significant amounts of fake views and other types of engagement, which also causes AI machines to be fed with the wrong type of data. I think they are on the right track, and I wholeheartedly support and follow their direction of comprehensively responsible conduct.

To learn more about why Bright Data (Formerly Luminati Networks) is taking the next step in its journey to deliver valuable online data to organisations and further support the data collection industry, click here.

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