The most valuable companies now rely on data. The trillion-dollar market cap leaders Apple, Amazon, Microsoft and Alphabet are not just tech giants they are data companies.
There are more start-ups than ever who are 100% digital, all with similar, progressive, aggressive acquisition plans who play in the crowded ‘hot spaces’ of entertainment, sports, travel, productivity, self-improvement and delivery.
The winners in these hot spaces will be able to create moats that will distance themselves from rivals and protect long-term profits and market share.
It’s what is known as the data network effect and occurs when a product, generally powered by a blend of humans (if the product is really smart) and machines, becomes smarter as it gets more data from the people who use it.
The more people use a product, the more data they are willing to give over and the smarter the product becomes.
The smarter the product, the better the experience it delivers to users and the more likely they are to come back often and give up more data.