An industry dominated by a small number of old players, an audience longing for better and the upstarts who broke through big.

Yes, this describes 2018 in data, where traditional heavyweights Thomson Reuters and Bloomberg saw an increasing field of disruptors, but it also reflects, and offers a lot of lessons from, the music industry in 1991.

An industry dominated by a small number of old players, an audience longing for better and the upstarts who broke through big.  

For a quick and opinionated history, the friendly vibes of disco and psych-folk in the 70’s were eroded by the W shaped recession, stagflation and an international oil crisis, paving the way for a bleaker, heavier turn in both society and music.   

Metallica released their first studio record, Kill ’em All in 1983, but became cultural mastheads with the thrash metal darkness of Master of Puppets in 1986, with the two albums selling a combined 9 million copies in the US alone.  This heaviness was supplemented by the second wave of hair metal bands, notably Guns N’ Roses, whose Appetite for Destruction, released in ’87, sold  18 million copies domestically.  The rock incumbents were established.

The next few years saw greater bombast, and bigger sales (Metallica’s self titled 1991 record remains their best selling, with almost 17m copies sold in the US), but a waning connection with listeners.  Given the choice between heavy metal and hair metal, younger rock fans began to feel the apathy which would define Generation X.  Then came KC.

Alternative Rock Conquers the World

Little known label Sub Pop Records in Seattle released Nirvana’s first record, Bleach, in 1989 to middling success.  But it was the band’s 1991 release Nevermind on David Geffen’s DGC records which changed the face of 90’s rock, ushering in a raw sound stripped of pretense and even of meaning.  Gone were the costumes, the makeup and the arena theatrics, in their place an urgent, hazy sound, inviting the listener to define their own meaning.  This was alternative rock.

What is Alternative data? Alternative data is defined as data collected from new sources such as satellites or sensors, or used in new ways

And readers can now probably see the parallels.  Alternative data, defined as data collected from new sources such as satellites or sensors, or used in new ways, has been around for a long time, picking up pace in the middle of the last decade.  But 2018 was its major label moment, as NASDAQ purchased alternative data pioneer Quandl and almost 400 alternative data providers competed in the space.  

Indeed, Quandl’s Alternative Data Conference in February 2019, which Suburbia will be attending, is titled “The race to be first is over”.  The question is what comes next, and I believe the music industry has three important lessons for everyone.

1. Expect the Majors to Muscle in

Seattle post-Nirvana saw a flood of attention from major record labels, giving greater attention to bands like Alice in Chains or Pearl Jam.  Others were met with less commercial success, like Nirvana precursors the Melvins or Tad. Similarly, Quandl was not the only alternative data provider to be purchased, with 7Park being bought by Vista Equity Partners in December.

In theory this influx of capital benefits everyone, by giving smaller players more resources, the bigger players more market control, and end users easier access to new platforms.  

In reality, I see upsides and downsides.  The influx of capital has only just begun, and by 2020 expect smart investments to bring today’s alternative data startups to the next level of success.  On the downside, there will be major players who overpay to establish presence in a crowded market.

But don’t worry, the incumbents have the money to lose and are not going anywhere – Guns N’ Roses still sell out stadiums, and Bloomberg and Thomson Reuters’ Eikon will remain Wall Street fixtures.  They just won’t have the field to themselves anymore.

2. New players will be distributed globally

The Pacific Northwest is considered the birthplace of grunge but by no means its only home.  New York’s Gumball came from the opposite coast, The Smashing Pumpkins hailed from Illinois, Bush from across the Atlantic in London and Silverchair  across the Pacfic flew the grunge flag in Australia.    

Alternative data has similarly been an East Coast play, with Toronoto’s Quandl focusing on the hedge fund crowd in Connecticut and the banks in New York.  But there is a growing field internationally, with Eagle Alpha, one of the industry’s earliest and most influential players, based in Ireland and Suburbia headquartered in Amsterdam.

Asia remains under-served, with some firms including IHS Markit having a presence, but the heavy hand of government-linked corporations creates headwinds for independent measurements and verification.   Regardless, it is a matter of time before alternative data users and suppliers are truly global.

3. Nothing will be the same

Grunge as a genre began to fade by the mid-90’s, with Nirvana’s last album In Utero released in 1993 and the band dissolving the next year.  Mother Love Bone’s tenure was even shorter, breaking apart before their first album was released.  Even bands who stayed together changed their sound, with Pearl Jam’s 1996 album No Code turning towards ballads and garage rock.


But the mark of grunge was inedible in music, either directly as Nirvana drummer Dave Grohl’s next band Foo Fighters owned radio rock airways in the mid-90’s, indirectly with Marilyn Manson, getting input on his 1998 record Mechanical Animals from Billy Corgan of the Smashing Pumpkins, and passively in trending pop acts like Halsey, photographed in Nirvana t-shirts and whose 2018 track New Americana mentions Nirvana directly.

Outside of music, filmmaker Gus Van Sant’s mumbling cast were the outsiders raised on grunge, most clearly in his semi-biopic Last Days.  In fashion and art, the band’s iconic designs from the yellow smiley face to the swimming baby have been emulated from high fashion brand Lad Musician in Japan to TV’s The Simpsons, and broadly the dividing line between the mainstream and the underground has been blurred.

This last point is crucial when it comes to data.  Much like David Geffen’s major label DGC traded with tiny Sub Pop records, traditional releases like government reports or company earnings will become enriched with alternative data, and alternative data suppliers will find themselves collaborating with traditional sources.

Data driven decisions will no longer be the enclave of hedge funds who can afford multiple Bloomberg terminals, or large financial institutions purchasing reports from consultancies.  

In a few years the influence of new data will be pervasive across mediums, roles and industries, leading to more accurate measurements and better decisions for everyone.  Add that to the enduring legacy of Nirvana.

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