The Exchanges

Q So you've mentioned a lot of specific types of data, like the number of cars being purchased in China or something like that. How does a company get that sort of information to begin with to then be capable of putting it on a marketplace to sell?

A So there's a lot of companies where their core focus is selling data. So they may get that data through an arrangement with someone who's producing it. They may get it by just web scraping. Web scraping is an enormous industry. You know, there's literally dozens of companies that scrape used car prices. They scrape listings. They scrape airline ticket prices. You know, every couple of minutes they're scraping restaurant reservation. And then, so then you've got companies where data is an exhaust of their core business. So think about the credit card companies. They're, they're seeing every charge that you make. Uh, they're not in the business of selling data, but they may partner with somebody who does, and they're very sensitive about specifically what they license because they don't want to break user trust. You know, then there's You know, other things like just a process. So think about imports. So any container that comes into the United States, there's form filing requirements that have to be done. All those forms are digitized under the, I believe it's the Freedom for Information Act, and they're publicly available. Granted, you have to buy them from the government, but they're, they're part of this process that's sort of built into something. And similar processes exist in areas like, imagine You're doing renovations to your home. You have to file a permit. Permitting o…

AI assessment note: “They may get that data through an arrangement... They may get it by just web scraping.”

Q Isn't there a way for the Chinese government to fudge the ship data coming in and out of each port?

A It really depends on the source of the data. So some sources of data can be more easily manipulated than others. So there are what are called bills of lading. So these are the government documents that get filed when a ship Comes into a country, leaves a country. Could those be manipulated? Absolutely. Then you have forms of information, uh, such as AIS data. So every ship around the globe has, you know, think of it as a collision warning system, a ship to ship communication system. And these are reporting the locations of the ship, the name of the ship, and this is all over the globe. Fudging that is very challenging, right? Cause you see the ship, the government doesn't really control the AIS beacons. And it's so far removed from something like GDP. But if you know what you're doing, you can piece these things together and start to come up with pretty interesting metrics. So, you know, things like satellite imagery, we're taking images of factory. I talked to a company yesterday that they, they take satellite images, they compute the volume of cars, the volume of people at a factory and how it's changing over time. Very hard for the Chinese government or for any government to manipulate those images Over a long period of time, right? You have to know exactly when the satellites are going to fly overhead. People are changing which constellations of satellites they use. That wo…

AI assessment note: “It really depends on the source of the data.”

Q In the instance of commercial data or in marketing data, right? So they obviously, these are two separate spaces. Do you think that people will actually get paid For the data that they put into the systems through their usage of them, like some blockchain companies claim they're working towards, or do you think at scale it's quite nonsense and people will never see that happen?

A I hate to say never, and I hate to make long-term predictions because I've been wrong in many cases, but, but from where I'm sitting, it just doesn't really seem feasible unless you're providing very rich information about yourself. So for example, if you were filling out You know, a five page profile on your interests and your job and your job history and your salary history, then all of a sudden you are high value to target. So you could imagine getting paid enough that that would be worthwhile. I've seen a lot of people talking about doing that. I haven't actually seen a quality implementation so far. It doesn't mean it doesn't exist, but unless you're going to fill out something like that, the value as an individual is pretty low and the complexity to actually aggregate that many people. Is extremely high. So it would be an enormous challenge, I think, to do that. I think that the marketing ecosystem would love if there was a company that was doing that well and was actually paying people a rate that, that it made sense for them to participate. You know, the, the problem is whenever you recruit people for anything, you, you introduce a bias, right? If you are paying people to do something, you're enticing people that that amount of money is worthwhile. Those people don't mind giving up information about themselves. And that's one type of person. There's lots of types of peo…

AI assessment note: “from where I'm sitting, it just doesn't really seem feasible unless you're providing”

Q uh, gene, but with gene sequencing and artificial intelligence, we'll be able to create personalized medicine where, oh, we see you based on your medical history and this thing that, like, this is the diagnosis you have, and this is the dosage of this pill that you need, and then your problem will be solved, blah, blah, blah. How long do you think it'll take for us to get there?

A I think we'll start seeing fruit born probably in the next kind of 10 to 20 years. You know, again, this goes back to a problem of we don't have enough information. Yes, we can, let's say, sequence someone's cancer, right? Every, everyone's cancer is different, right? It's, it's something your body produces, it's mutating at a very high rate, and that gives it different characteristics. But just because we can sequence a protein, we don't even know necessarily how that protein folds. If we don't know how that protein folds, we don't know how it interacts with other enzymes and other proteins and other structures in the body. So there's still an enormous information, amount of information that we, we don't have. But in, in certain cases where it's a lot simpler and it's something that's heavily observable, then we can draw those conclusions. You know, for example, eye color. Eye color is controlled by a very small number of genes. Um, and we can observe what someone's eye color is. It's very easy to, to know. Um, it's harder to know things that are going on inside the body Across, you know, millions and millions of samples to figure out, well, which base pairs control your susceptibility to severe COVID infection. You know, maybe it's involving thousands, you know, hundreds of thousands of, of amino acid base pairs. Without understanding how these structures ultimately work, hav…

AI assessment note: “I think we'll start seeing fruit born probably in the next kind of 10 to 20 years.”

Q those users and the companies that they're a part of. Kind of going towards like the way LinkedIn does things The actual means of search and returning results can become quite complicated when you have a number of columns in your data set. So is there a specific strategy that companies should be thinking about and how to sort and provide results for these things? How are you handling that?

A So internal data is a completely different beast, but some of the problems around internal data are shared with what we call External or alternative data, which are these commercial data sets that you buy. So a lot of people try to characterize data by what columns it has, what format those columns are in, what's in the actual cell in a, in a given database table. But that doesn't really tell you what the data can do. That, that more tells you what the data is. And just to give you an example, you know, we've done a lot of connecting with consumer credit data. So think of You know, the Equifax's, the, you know, other credit bureaus of the world, they're storing data on all of the loans someone has outstanding, what, what their mortgage payments look like. You can look at those fields. You can look inside the field. You can look at the column headers, but that doesn't tell you that you can use that data to solve things in completely different spaces. For example, I might want to look at the health of the auto loan market in Arizona. You know, I might want to understand what's going on with used car prices. Nowhere is that going to be obvious from a bot looking at that data. That's a complicated leap. So the route that we've chosen to take is one that combines man and machine. So we collect data on what these data sets can be used for. And a lot of that comes through the searches…

AI assessment note: “the route that we've chosen to take is one that combines man and machine”

Q Yeah, that's why a lot of people use VPNs and privacy browsers and logged out mode and incognito mode to try to just hide and protect, you know, what they do and how they do that. Do you think that has actually any benefit whatsoever or are people just kind of being lied to and feeling good about it?

A It definitely reduces your, let's call it digital footprint, but to really completely remove yourself from the grid requires, you know, one, you've got to basically turn off your phone, or you've got to have some sort of a special phone that's not leaking anything. You can't go on the internet. Even, even if you're using a VPN there, it's a much harder record to get. Still, the fact that that communication happened is not a complete secret. You know, I think people can rest assured that most, I mean, I've been in this space for probably 10 years at this point, and the kind of information being sold is mostly not at a, Personal level. It's, it's been highly aggregated. So if we're talking about credit card transactions, people are not seeing that you, Sean, went to Home Depot and bought these five things. You know, someone is buying the fact that overall across all US stores, Home Depot sold X amount of dollars today, yesterday, a week ago. Same with sentiment data. No one really cares for the most part about one person's opinion. They care about the aggregate of millions of people's opinions. So those are the cases where I've seen most of the data monetized. Now on the flip side, marketing does want to know exactly who you are and they don't necessarily need to know your name, but they do need to know some way to target you. So it might be your home address, which maybe they ac…

AI assessment note: “It definitely reduces your, let's call it digital footprint”

Q Brilliant. So how did you get the idea to do this?

A So my, my journey with data has been a long one. It started back in the early 2000. I had founded a data company basically helping corporates use their own data. And then I moved to an investment role where I was the one trying to figure out How a company was doing or, you know, how a specific country was performing. I immediately felt the problem of where does this data live? I know what I want to do. I have no idea what data out there would help me or who's even selling their data. And so I kept seeing that problem recur over and over again in my career. Most recently before Nomad, I ran a company called Adaptive Management, and that company was focused on once you bought the data, How did you actually work with it? So we basically provided a single user interface to help people work with multiple data sets. And the question that always came up is what data should I use to do this? And we ended up getting more and more inquiries just like that. And it just kept hammering home the point that there is not an easy way to find data. And that's a seed that's been growing in my head for a while. And then I sold the company early, 20, 20, literally a month before COVID started, done a little bit of traveling and then started to Think about, well, what's next? And this was a problem that had been burning and decided to spend the time of lockdown beginning to build that business.

AI assessment note: “it just kept hammering home the point that there is not an easy way to find data”

Q You said it was one way to go about it. What are the other ways?

A I mean, there's more basic systems such as filtering. There are some companies that tag different data sets with attributes. So I might tag geographies that this data Uh, company claims to cover. I might cover certain types of data. And so then you rely more and more on the human to know what geography they want, what specific type of data they want. Uh, and so the human mind has to be trained to know how to, to do a part of that problem. And then you can do the last piece using a basic string search, but obviously that doesn't help you with the use cases. It doesn't help you with anything that's not embedded in the data set or in the metadata about the data.

AI assessment note: “there's more basic systems such as filtering.”

Q decisions on behalf of driving a car, driving a truck, et cetera, that it's a slippery slope towards allowing AI to control society because if humans are so bad at it, surely an AI with no emotions will be capable of making better decisions on how to organize resources and manage people. Is that something to look forward to or is that something to be scared of, do you think?

A I think it's mostly something to look forward to. This is no different than the problem with people again, right? You need to have created a structure where you can remove that AI if there's a problem, that there is a fail safe, you know, in, in democratic societies, we can remove one person and we can put another person in their place, right? We're not wed to one thing. The system will function without that specific person. You need to think about how to architect these systems that are dependent on AI and make sure if for some reason the AI needs to be turned off, There is a bug with it that it can be replaced and the system can continue to function. But, you know, I think driving is a great example, right? You have so many people making independent decisions, which is massively inferior to one thing guiding all traffic, right? And imagine every router on the internet had a different opinion about how to route packets. And, you know, I don't know, I don't like that packet, that packet cut me off, you know, imagine how the internet would work. But when you have an over overarching system and a set of rules that Each of these, you know, different components behaves by, then you get a more efficient system. We have that system in the internet today, and the internet doesn't necessarily think for itself, so it's not a danger, but if you put something or someone in charge of it, t…

AI assessment note: “I think it's mostly something to look forward to.”

Q So it's interesting you talk about how it's really hard to find the data because as a user of social media, I think most people are assuming that these companies are collecting and selling it, not on their behalf, usually against their consent. Are companies like Facebook allowing this data to get sent to the internet For companies like you to ingest, or are they just keeping it for themselves?

A And yeah, the, the big guys are keeping it to themselves. That is their competitive advantage. The fact that Facebook knows who you are, they know what websites you're visiting, they know what apps you have on your phone. And so everyone else in the marketing ecosystem wants access to similar data and marketing data is just a small sliver of the world of data. The problem goes back to the fact that there are thousands of vendors. You, you bring up things like Twitter and sentiment. There are literally, you know, 50 to a hundred that I know of data providers that just sell sentiment based on, on Twitter data. And so if you're somebody that's trying to solve a particular problem where that data will help, where do you even start? You have a list of 50 and that's assuming you know exactly what kind of data you need. If you were a management consultant and you're working on, let's say sizing a market, you have no idea. Is it sentiment data we want? Is it web traffic data, credit card data? Some data have never even heard of before. And so that's where the problem exists is it's so overwhelming. You know, most of the. Approaches to date to solve this problem have been basically to put giant lists in front of would be data customers. Here's, 5000 data companies go at it. And that's not an easy thing to do, right? It's like going to a diner and having a menu of 500 things. How do you …

AI assessment note: “the big guys are keeping it to themselves. That is their competitive advantage.”

Q How does artificial intelligence, coupled with data, create business intelligence?

A If you have a big data set, and you're trying to understand something about your own business, artificial intelligence is a great way to do that, right? You can feed it a stream of, let's say, previous business outcomes. Let's say you want to know if your competitor is doing something, and you have a lot of evidence of when they did that thing in the past, and when they did not. And then you have some other input streams, you're measuring The number of employees they have, you're measuring how much product they're ordering from different companies. And you could use AI to figure out when there's some sort of a turning point in a business. You know, I'll give another example in economies, you know, last year there was a lot of uncertainty, you know, as we think about March and April, everybody thought that the U S and global economies were basically in the toilet and that a short-term recovery was extremely unlikely. And what we saw in hindsight is that the recovery happened almost immediately. And so You know, if you were tracking very high volume indicators, you know, and you had a measure of economic activity going back 20 years, you could use AI to very quickly figure out, you know what, what people are talking about in the news is not right. The economy is recovering, and it's recovering faster than people think, which, you know, changes a lot of things. If you are a, a man…

AI assessment note: “use AI to figure out when there's some sort of a turning point”

Q improbable, not impossible, but improbable, that people will end up getting paid for their data, then it seems like as we go forward into the next decade or so that corporations will continue to amass data and be in control of it. So it's kind of like the current system's not going to really change for at least another 10 or 20 years. Does that sound fair to, to assume?

A 10 years is a very long time, but from where I'm sitting, the main change is around privacy. So there, there have been a lot of changes. Some of them are government driven, but actually a lot of them are, are company driven and, and maybe they're, they're being enacted for the better of humanity, or maybe it's for the better of, you know, a specific technology company. Like for example, If you're an iPhone user, they've begun prompting you much more often about whether you want to allow an app to do something. So one of the common things is to see what other apps are on your phone. So it used to be the case that any app on a phone could see every other app on that phone. And there was a reason why that made sense, which was, you know, if I'm writing an app and my app is crashing all the time, I kind of want to figure out which configurations on the phone are causing it to crash. And there, there are other valid reasons why that information is very useful. But then you see, Many app companies start to sell that as a data source where they'll report the number of installations for a given app across millions and millions of phones. And then Apple lashes out and says, no, you can't do that. That's breaking our terms of service. And that might be again, because they, they want to protect the consumer, or it might be because, well, they don't want Facebook to get access to this data…

AI assessment note: “10 years is a very long time, but from where I'm sitting, the main change is around privacy.”

Q So do you think artificial intelligence alone will be capable of that at some point once we figure out how to use the data properly, or will it require an upgrade from something like quantum computing to be able to really process?

A Well, certainly there, there are cases where faster processing will help. Certainly protein folding is one. The number of calculations have to be done is staggering. Of course, if we do invent quantum computing and it does lead to that level of a breakthrough, then there's a lot of other problems that it might cause. For example, blockchain breaks down, Wi-Fi, any sort of internet security breaks down as all the keys are really based on certain math problems being really hard to solve. If we make those problems easier, then we introduce new problems. So certainly faster computing would help, but there's still knowledge that we need with all the computing power in the world. You know, we won't be able to defy gravity, right? There needs to be a breakthrough in understanding of that in order to even know where to focus the problem. It requires more than just data and knowledge and understanding of how something works is important. And really machine learning is trying to shortcut that saying, you know, we don't understand how something's working and let's just, for the most part, forget about how it works and let's try to understand how we get from input To output. The black box in the middle, we can't really understand, we can't see into, but we understand given, you know, a certain set of inputs, here's what the expected output is. So given a certain set of genes, here's what t…

AI assessment note: “certainly there, there are cases where faster processing will help.”