With a changing environment for organizations that depend on the digital landscape, it is critical to exploit every available data source. Insights such as customer attitude, current trends, and rival plans are required. There are a lot of sources for these valuable alternative data for startups.
Alternative data enables organizations like yours to examine important indicators and make data-driven choices in a highly dynamic environment. In this article, you’ll learn what alternative data is and how to access and utilize it.
What Is Alternative Data?
Historically, corporations gathered information via consumer studies, press releases, legacy media networks, and journalists in their particular industries. Information obtained in this manner has one serious flaw: it is outdated.
The alternative data capability allows you to aggregate information based on user activity so that you can predict trends before the media does. In a nutshell, alternative data is your capacity as a company owner to understand how people think, feel, and act on those instincts. The amount of information available and the size of the market will likely both grow significantly in the near future. As you now understand what alternative data is, let’s find out how it is created and how to obtain it.
Benefits of Alternative Data
By combining different factors and taking into account market restrictions, companies can improve the quality of their choices. Alternative datasets may substantially assist managers in accurately evaluating and controlling processes and structures.
The strategies and actions of company owners to create a compelling brand with products and services in high demand are determined by assessing customer behavior utilizing satellite data and credit card-based payments. The increasing competitiveness and variety of products have become increasingly important. Companies may better correctly forecast future trends in various marketplaces by using alternative data.
Businesses may better understand their clients and develop trust by carefully examining cultural and linguistic characteristics, as well as social media comments and responses. Companies might promote their goods to a market that they are ignorant of by using alternative data. Alternative data may also give real-time data to determine a company’s product brand.
Sources of Alternative Data
Unstructured data generated by a company or a person’s activity, public records such as non-farm payroll, mobile device data, Internet of Things (IoT) sensors, credit card transactions, point of sale transactions, website data, online browsing activity, product reviews, internet activity, app store analytics, ESG data, satellite imagery data, and social media sentiment data are all examples of alternative data.
From smart homes to mobile phones, all the devices generate machine data when they send signals and communicate with one another. You can use GPS location data to learn more about your customers and what they might want to buy.
Data from this source is simple to get but difficult to understand. Not every signal from a machine is of use to an enterprise. Combining machine data with other forms of data, like business data for analysis, provides fresh perspectives and insights into company activities and operations.
Traditionally, when a company shares information or makes that information public produces business data. Alternative data is a byproduct of other organizational operations. Let’s say the company you want insights on isn’t sharing them. Thus, instead of scraping the actual targeted business for information, you might focus on its suppliers. You can even get data from your suppliers and find out useful information about your rivals who have the same suppliers.
Utilizing alternative data, businesses can determine their rivals and anticipate their market behavior. They may decide whether to develop their goods or extend their sales into other areas. Thus, they have a better grasp of their rivals’ strategies and, as a result, can implement a more defined approach.
Individuals’ regular data comes from social profiles in other areas of interest, while alternative data comes from analyzing their activities rather than their profiles. Learn, for instance, about the things they evaluate and how they respond to companies.
There is a problem with individual data in that it is difficult to aggregate information and bring it together in a structured form that is of use to your firm. Now let’s talk about how to collect the data we just described.
How to Collect Alternative Data?
To aggregate data from the Internet, you first need to perform web scraping or manual collection. A manual collection of data could take a long time and be prone to human error. You should also decide if you want to do the web scraping in-house or outsource it. Let’s look at these two alternatives and evaluate which one best matches your company strategy.
In-House Web Scraping
Maybe you think a freelance programmer can write a script that will effectively scrape a particular online asset. However, this is not the case. Your script will soon become outdated since the internet works in an ever-evolving manner.
You will need an in-house team of programmers, system administrators, and data analysts to properly organize the alternative data you get and to keep your script up to date. A team of data analysts who collect data and execute numerous scripts is acceptable if you are comfortable managing them on a regular basis.
For businesses of all sizes, there are several ready-to-use, configurable cloud-based web scraping applications available. Companies like Octoparse may create a bespoke Python script for you and host it on their own servers to gather as much data as possible.
Web scraping businesses are specialists at circumventing user agent blocking, which slows down conventional in-house teams since they do not continually adapt to platforms. The entry-level rates for ready-made scripts are affordable to small enterprises and startups.
Alternative data plays a huge role in company performance. As indicated in the article, convincing firms to embrace a data strategy, much alone one that harnesses alternative data, may be difficult. Companies can use so much data to gain a competitive advantage, but getting and analyzing this data can be challenging.
Alternative data for startups will only grow in popularity. User interactions will be a critical indicator for firms in adjusting their KPIs and meeting their desired objectives. Choose the web scraping method fit for your project and a proxy from KocerRoxy to meet its needs.