Is There An Increasing Marginal Utility Of Data?

My partner Brad wonders whether data has increasing marginal utility in this post on the Union Square Ventures weblog. One of the commenters suggests that it does not. Interesting discussion.

#VC & Technology

Comments (Archived):

  1. johndodds

    Off the top of my head I would say that it increases, then plateaus and finally decreases. This is not so much to do with collection/analysis costs which are increasingly minimised, but is all to do with the increased amount of segmentation/targetting that additional data enables and the attendant value to your business.The greater the data you collect, the closer you’re getting to identifying a uniquely personalised product/service – whether or not that is a good i.e. valuable thing is presumably related to the premium value of your product/service. If you produce bespoke solutions/products, then perfect information is of value to you because it means you can absolutely and exactly meet your customer’s perceived need (notwithstanding that those needs will probably change). If you don’t produce bespoke solutions but approximate ones then there will theoretically be a point at which more data displays negative utility. I think.