Q&A with Auren Hoffman, CEO of SafeGraph: Data strategy made simple

Auren Hoffman is CEO of SafeGraph — building geospatial truth sets. He is the former CEO and cofounder of LiveRamp (NYSE:RAMP) — the largest middleware provider in marketing technology. He previously served on the board of BrightRoll (acquired by Yahoo). He is also an investor in over 80 technology companies.

Find him on Quora on Twitter.
Podcast Link: https://www.safegraph.com/world-of-daas

Question: Do you see a common theme occurring across industries and how are companies evolving with this theme to be more productive?

Hoffman: Right now across every industry, including the maritime industry, everything is becoming more data-oriented. I’m going to use Starbucks as an example: Starbucks today has 400 data scientists and they have an SVP of data science. Just four years ago, they had only 40 data scientists and they had a director of data science. In four years, they went from a director to an SVP and they are 10x the number of data scientists. Many other companies are following this trend. Starbucks is fairly far along on this journey, but most companies are somewhere on that curve. One of the fastest growing businesses is the business of selling data. Spire can sell data better today than if it existed 15 years ago and it’s because now there are more data scientists and more data oriented people who can take in that data and make use of it.

Question: When did you see data markets begin to accelerate and when did you know that the industry was mature?

Hoffman: Historically the data business was limited because using data was a complex process and the number of expert data scientists and data engineers available were few. Today, a good engineer, plus Snowflake or Databricks, is as dangerous as a great engineer was five years ago. So, you’re just seeing a massive increase in the size of the market. Just five or 10 years ago, you would have needed a data engineer to ingest data in order to use it. Now, business professionals are accessing data on dashboards and through APIs and making decisions based on their findings. The accessibility and usability of data today has had a remarkable impact on the market and made it an exciting sector to be in.

Question: You mentioned the accessibility and usability of data as reasons for the growth of data markets. Are there any industries that have not been exposed to data usage and do you think the market has reached saturation?

Hoffman: Every industry is being impacted by data right now. I don’t think there is an industry that has not been affected by data in some way. Some industries were quick to jump in and use data for decision making. Other industries waited and watched and then participated. Depending on the sector you’re in, you’ve seen the impact of data. It’s inevitable and I predict that this rapid growth, I’m talking about a 1000x kind of growth, will usher in a second wave of data usage during the next decade.

Question: What have you seen in other industries that enables adoption? What are the key points that allow adoption in other industries? What insights can you share?

Hoffman: Data-oriented competition pushes a lot of professionals to embrace data. I’ll use an analogy: If you’re a retailer and you’re competing against Amazon, you have no choice but to become data-oriented. If you don’t, you’ll lose, but that doesn’t mean you have to adopt all of Amazon’s strategies. The goal would be to adopt the main or key differentiator that your competition is using to take your market share. Data is often this key element. Data can be studied and used to determine factors that affect market share and profitability and margins. Data helps identify areas of change, sometimes very small factors that can be altered to deliver improved market penetration. Data is that key factor for competing.

Question: Internal data vs. external data. What are your thoughts on the value of each?

Hoffman: Internal data is only valuable if you’re actually using it. Before you add external data as a tool, make sure you’re using your internal data. At some point, you’re going to hit a curve where there is only so much you can extract from your own data. Internal data is the vision of your 0.1% of the world. Let’s say you’ve maximized the value of your internal data and you’re looking to go deeper into your sector. At this point, you need external data and you might also need different types of data. If you’re a shipping company, for example, you might need AIS data and weather data to make decisions about routing and ETAs. This outside data can augment your internal data. One indication that external data delivers value is the sharp increase we’re seeing in data budgets. Data budgets have gone up dramatically. Today, we’re starting to see data budgets growing more quickly than software budgets.