bigdata-foundingfathers

The Founding Fathers of Big Data – Associated Press
By Charles W. Stryker

The Associated Press is another Founding Father of Big Data that has lasted for more than a century and a half and not only does it survive today but it leads all competitors in its chosen information industry sector.

The Associated Press was created in the same timeframe that saw the birth of D&B as well as Reuters.  While D&B was making a name for itself in the credit information business and Reuters was entrenching its financial news delivery leadership capabilities in Europe, AP was getting started as a unique monopoly creating a new more efficient way to publish news at scale.

The Associated Press got its start at a meeting of six New York publishers who gathered at the behest of David Hale, publisher of The New York Journal of Commerce.  On the agenda for the meeting was the financial challenge of covering the Mexican-American War which was draining the resources of all six competitors.

Moses Beach, publisher of the New York Sun, proposed that his company’s efforts to gather and report on news from the war be shared with his New York competitors and, in return, all benefitting from the reports would share the expenses Beach incurred in the process.

That day, the Associated Press was born.

Beach saw the telegraph as the pivotal technology that could overtake the traditional ground and sea-based modes of news dissemination like the pony express, mail boats and carrier pigeons.

As with other Founding Father organizations discussed earlier, the Associated Press coupled a changing social or market environment with a technology based solution.  However, once achieved, AP’s market leadership was sustained through a century and a half by barriers to entry.

In the beginning the purpose of the Associated Press as an organization was strictly financial.  On the surface, the association looked to be a cost sharing arrangement only.  However, as it turned out, the sharing agreement was in fact the blueprint for a very effective and durable business model.  By sharing all the news that arrived by telegraph wire and dividing the expenses evenly, each member was spared the dangers of losing wire-borne information to a higher bidder.

AP realized that if it could secure exclusive access to news stories before they got published elsewhere it would mean that its association members could scoop their competition every time.  As it now had become a highly trusted news source, the Associated Press could rely on a committed and very loyal customer base to support the AP model, even in the face of competitive alternatives.

As with other markets that rely on information timeliness and accuracy, once AP garnered the lead in news collection it was difficult for any competitor to unseat it.  This market phenomenon has kept the Associated Press viable and vigorous for nearly 170 years.