Data is everywhere, and we're increasingly generating more and more of it. The explosion in data growth has kick-started a new industrial revolution, with businesses taking the information and using it to build services that help us understand and navigate the world around us. From GPS apps that tell us the nearest place we can buy a pizza to genomic programs sequencing DNA in order to create new medicines and cure disease.
But it isn’t just international pharma and tech giants that have cashed in on the fuel source of the information age. Companies of all shapes and sizes have worked out how to profit from it by extracting the insight it contains and selling it back to us. By doing this, some of these companies, such as Netflix, Uber, and AirBnB, have gone on to become industry giants and household names themselves. The truth is, the data and tools are out there for anyone to use and have never been more accessible, and I believe almost any business can benefit from putting them to work.
Services are the products of the 21 century. In the 20 century, businesses like Ford (cars), IBM (computers), and Microsoft (software) conquered the world by creating products that changed it. This century, Meta, Google, and Amazon (as well as many others) do the same by selling services rather than anything physical. Well, Amazon (and the others, in fact) does also sell products, but the majority of its revenue comes from selling services that allow others to sell through them in exchange for a cut of the proceeds.
What is it that makes them “smart” services, though? Well, the key is that, as well as selling data to us, they used advanced technologies like artificial intelligence (AI) and big data analytics to pull insights from the data and provide it in a form that makes our lives richer, simpler, or more low-friction. Google is a great way of finding information, but it doesn’t just search all of the internet and return whatever most closely fits the text or speech that we’ve searched for. It uses AI to get a deeper understanding of what we're looking for and to rank the possible results in the order that we're most likely to find them useful. Likewise, Facebook doesn’t let us search and add our friends. It uses algorithms to suggest the people we’re most likely to want to connect with, as well as to provide us with news and entertainment content it thinks we’ll enjoy.
Netflix and Spotify are two more really good examples. They both provide us with an instantly accessible library of content, but beyond that, they use the data they learn about us, and their millions of other users, to select the movies we're most likely to want to watch and the music we like to listen to.
That’s the basics of what I call “smart services” – not just huge piles of data we can search through to find what we want, but tools and applications that help us to make the most of them.
The smartest of smart services often find ways to go on to create entirely new revenue streams with the data they’re generating.
