The Founding Fathers of Big Data – Early Founders Wrap-up
By Charles W. Stryker
Louis Tappan, Julius Reuter and Moses Beach all laid the groundwork for their respective companies more than a century and a half ago. Dun & Bradstreet, Thomson Reuters and Associated Press are key Big Data players today because of their entrepreneurial skills and keen understanding of new market opportunities in the mid-1800s. For each of these Founding Fathers of Big Data, there were similarities in the nature of the challenges they faced in growing their burgeoning businesses. However, the obstacles to success that they faced were distinctly different. The solutions were unique in their ability to provide the company with a leverage that worked for the short term and, as it turns out ultimately, for the extremely long term as well.
So what was the magic that worked for these early Founding Fathers? Clearly it wasn’t just a technology solution alone because soon all competitors would be able to access the same technologies that propelled the market leaders to their successes. For all Founding Father companies we examined, there was a social impetus that drove the entrepreneurs to be the first with a solution.
The mid-nineteenth century was marked by a flood of new commercial activity extending West and South in the U.S. attributable to events such as the California Gold Rush and the opening of the Erie Canal. While typewriters and carbon paper allowed The Mercantile Agency to build a dominant capability in credit reporting by providing wide geographical distribution of credit report copies, another component was required to cement its winning position throughout the decades. That factor was developed from the outset, because The Mercantile Agency was there first. The long term success of the company – even as it morphed through various name changes to arrive at D&B – was based on developing a relationship of trust with the customer and to be first. Why would any company concerned with the risk of doing business with an unknown company, thousands of miles away, use a new supplier that had never demonstrated their skill in accurately identifying the bad guys from the good?
Similarly, Julius Reuter saw the benefit of using emerging technology to accomplish what no other company could do. The challenge was commensurate with the times: stock traders in England and Europe were increasingly hungry for stock market news and quotes. It was essential to Reuter that he provide the solution. It turned out that the right solution was an underwater telegraph cable across the English Channel. He was the first to procure commercial time on the cable to transmit stock prices and quotes from London to the mainland and back again.
Once Reuter was able to show his clients that he could provide them with the most current stock quotes, using an alternative source would be risky for the client. Reuter was the gold standard because he was there first. This phenomenon of making oneself an indispensable solutions provider for the customer became a key component to the long term success of all three companies we have looked at as Founding Fathers of Big Data from the nineteenth century.
Finally, Associated Press provided our third example of the birth of Big Data. The problems posed by distance and speed of information delivery framed the challenge faced by Moses Beach and his publishing competitors in New York. The newspaper race to cover the Mexican American War was fraught with logistical impediments as reporters on scene tried to get their first hand report of the battles to a news hungry population in the U.S. By sharing the costs of news transmission through telegraph lines and private carriers, the AP was able to establish an impenetrable cartel that would stand the test of time for a century and a half.
So the key to short term success for all three of our Founding Father companies we have examined was to implement a technologically-based solution to capitalize on a new business opportunity and to be the first to do it. If you are first in the information industry, you can expect to have decades of success. This characteristic of the information industry is unique as compared to other technology segments where being first rarely produces a market leader.