Bloomberg Law
May 13, 2015, 1:38 PM UTC

The Business Case To Make Big Data Free

Jake Heller

Editor’s Note: This post is written by the founder of Casetext, a legal research company.

By Jake Heller, CEO and Founder, Casetext

Big data has been a technology trend for years now. But, as a business, the market for big data is in many ways in its infancy. True, companies have built serious businesses and services around big data. These include new startups like Sift Science, which leverages big data techniques to predict credit card fraud; more established companies like Palantir, which provides primarily government agencies and financial institutions with insights into their own data; and old stalwarts, like IBM, which is now productizing Watson, the computer that famously beat Jeopardy superstars.

But despite the enormous potential, even some of the most exciting big data companies are missing a huge opportunity. They’re all adopting variations of the same business model: put the data behind a paywall and charge for access. That is, these nontraditional companies are employing the most traditional business model there is by treating data like a physical product.

While this approach is common, it’s also outdated. Sure, companies are responding to known market forces: acquiring datasets is costly, and a company looking to become a profitable business needs to recoup those costs. But this isn’t the best way. The big data industry, and new entrants especially, need to think about alternatives.

Indeed, you can build an even bigger business by making your data free, and charge instead for other aspects of your service. This may be counterintuitive, but it’s a much better approach for a company focused on long-term growth. You can get a larger userbase that will convert to paying users later, build a better data set than your competitors, and do a genuinely good thing for the world--all while building a bigger, more sustainable, and more defensible business.

Here are three reasons big data companies should seriously consider making access to their data sets and insights free.

Free data sets = a bigger user base

Free is, of course, the best price, and making your data free will attract immediate attention. This is especially the case in industries where the status quo is to charge a lot of money to access similar datasets.

Enigma, for example, is a big data company that has collected data from over 100,000 public datasets for searching and sorting. And the platform is, for most use cases, free. In large part because it’s so easily accessible with no paywall barriers to entry, Enigma has managed to garner real traction. The idea was so popular that it won TechCrunch’s “Disrupt” award in 2013, and has backing from, among others, the New York Times.

The legal industry faces similar challenges. Access to the law is extremely expensive, with larger law firms spending millions of dollars a year to access research databases. Many attorneys simply cannot afford these high costs. That is why we decided to make freeing the law one of our top priorities at Casetext. Because we strongly believe that the law belongs to the people, we’ll never put any judicial opinion, statute, or regulation behind a paywall. And while this approach supports our core mission, it’s also good business. We’ve seen a tremendous surge in users -- more than 300,000 people use Casetext every month for legal research (compared to 1.2 million total practicing attorneys in the U.S.). It’s rapid adoption fueled in large part by high demand for free information.

Freeing your data empowers your users to make the data better

By eliminating the cost of data, you can actually motivate your users to help you make your data more powerful. Many people want to share their own knowledge, especially if they know they’re adding to a platform that’s meant for public use. There’s huge potential in tapping the collective knowledge of your users.

A great example of this is when former Boston Mayor Thomas Menino’s Office of New Urban Mechanics launched an app called Street Bump. The city faced a constant problem: how to proactively address potholes before they became a public nuisance. The app took the first step, by automatically detecting bumps in the road when users drove city streets, and transmitting that information to the city. Armed with that data, the city was able to target their efforts on the areas most in need of repair. Putting power into the people’s hands allows them to add insights only they can contribute, and the only way this becomes possible is if the data is accessible to begin with.

In law, lawyers know that the context surrounding the law is as important if not more important than the text of the law itself. Traditional companies have taken the old-fashioned approach of hiring large teams to produce this context, and like the rest of their data, keep it behind a paywall. At Casetext we’ve discovered that by making the law free, we’re able to collaborate with a broader community of users to get better context from attorneys’ own experience and expertise. And by making that context community-driven, it also has the benefit of being free.

Position your company on the side of right

Industries as diverse as technology, finance, law, retail, and transportation are all being transformed by wider access to information, and the rate of data that was once proprietary being made public is increasing. This is a great thing, not just for consumers, but for the wider market. We know freeing data provides opportunities for more people to build things based on previously inaccessible information, turning your data into an increasingly valuable public good. One example is how Breezometer is compiling air pollution data from government agencies and local information to give the public a better understanding of their neighborhood’s air quality. There are so many other examples and opportunities to use data as a source of public empowerment. By doing your part to level the playing field of information inequality, you’ll help your data serve as a tool not just for elite institutions, but also for researchers, educators, and the public.

My advice is that in this sea of positive social change you should position your company at the helm of this movement, not lag behind it. The most transformative companies aren’t just selling a product, they’re promoting a vision, a new way of seeing the world. At Casetext we imagined a world where people researching the law can easily tap the collective expertise of the entire legal community for free, and then we built toward that vision with the help of a growing community of engaged lawyers. Taking the side of free data, of open knowledge, is one of the best ways to situate your company on the side of fairness, equality, and at least in the case of law, on the side of social justice. The more people in your market you reach with your data, the more opportunities to work with your users to create something of real collective value.

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