The Company Trying to Get You Real-Time Economic Data
Imagine you own a small grocery store. You need to know the price of tomatoes in a neighboring city to set your price, but the only data you have access to is weeks old--and you definitely won't be driving there and back to get what you need.
“All of the [traditional economic] metrics used bear less and less resemblance to what is actually happening on the ground,” says David Soloff. “By the time they have synthesized what is going on, reality has moved one, two, three steps beyond that. You are always at lag.”
Soloff is the co-founder of Premise Data Corp., a San Francisco-based start-up that collects economic data from retailers all over the world and feeds it into a massive, real-time index of business metrics, such as inflation and product availability. While the company already has a few big clients, Soloff believes the company's indexes will be especially useful to small retailers, which tend to rely on public data to make inventory decisions.
How It Works
Let's start with exactly how the company is building this index. Soloff and his co-founder Joe Reisinger, who founded the company in May 2012, use a surprisingly low-tech method to collect this real-time data: crowdsourcing.
Premise has a 700-person, smartphone-wielding team of contracted workers on the ground capturing photos of shelves at local markets, grocery stores and chains in 25 different cities across Asia, Latin America and North America. Workers are paid 10 to 30 cents per image captured and clients pay for access to Premise's data.
Every photo is automatically geo-tagged by software downloaded on the workers' phones and then uploaded to Premise's servers where it is analyzed. The compilation of these photos creates millions of discrete data points that Premise, which has 17 full-time employees, uses to track changes in the market. Indexing this information, Premise generates economic indicators such as inflation rates and consumer prices indexes. Soloff touts the range of information the service can uncover also includes supply shortages, price gouging, hoarding and even the selling of counterfeit goods.
So far, Premise's idea has gotten some big attention. It has six paying clients--including Bloomberg, a government agency, consumer packaged goods companies and financial institutions (the company would not provide more specifics). And it also boasts an undisclosed amount of financial backing from Andreessen Horowitz, Harrison Metal, and Google Ventures.
A Boon for Small Merchants?
But what about small businesses? So far, the company doesn't have any small merchant clients, though it pulls data from some 5,000 merchants around the world. Soloff seems to think small merchants would benefit the most from access to this data.
Neil Grimmer, president and co-founder of Plum Organics, Inc. 500 honoree and maker of organic baby food, said that the economic data Premise seeks to provide would be beneficial to his company.
“We have an insight driven business. To do that effectively you need information. You need data at your fingertips,” said Grimmer. “A lot of current solutions that are out there have time delays. That data doesn’t keep with the pace of a modern business and for small businesses, having access to that kind of aggregate data in a simplified, user-friendly form is huge.”
But, as with any start-up, big dreams are often surrounded with significant hurdles.
Though Premise is the first start-up to crowdsource economic data through this capture-based system, it is not the only start-up seeking to provide businesses with data. Grimmer said Plum Organics is already using Quiri, a voice activated app that allows users to ask questions and access market data.
Soloff stressed that the real strength of Premise is the amount of data it can access at one time within its network, however.
“We are capturing tremendous amounts of data within our infrastructure. We have the opportunity to build hundreds, if not thousands of different models at zero incremental cost to identify the sampling approach that best resembles a useful data output,” said Soloff. “We also give the raw data to our customers so they can run their own trials and processes.”
And accuracy of the data is another challenge in and of itself. The company's answer to this for now is a series of checks and balances. All team members responsible for data capture are trained and each undergoes a trial period in which their captures are verified as accurate before they make it into Premise’s data pool and the system is set up to adjust for sampling error.
“We are not inventing new metrics to measure the economy. We are just trying to dramatically upgrade what is already happening,” said Soloff.