WTD Editorial: NY Equity Firm Looks to Buy Trade Intelligence Company

Last year, I was contacted by a New York based consulting firm on behalf of one of their clients: a major equity firm interested in investing in the Trade Information field. This multi-billion organization, who shall go unnamed for confidentiality reasons, focuses on investing in existing, profitable businesses (primarily within information technology) not start-ups. Seems they were looking for a trade information company to buy or heavily invest in.

As the expert du jour, I consulted with the principal – first providing an overview of the trade intelligence industry: history, sources and types of data, business applications, current challenges, and areas of potential opportunity.

Concurrent with his intention, we spent a goodly amount of time discussing the major players (along with their respective strengths and weaknesses). Of course, I gave him a run down of the “Usual Suspects” – those I call the “Top Tier” TI providers: PIERS, Datamyne, Zepol, Panjiva and Import Genius. I avoided the recent “Gang of Twelve”: newly minted domestic and foreign companies offering access to U.S. Customs Waterborne Import BOL data via an off-the-shelf BI intelligence software utility.

I started with TI companies offering the U.S Customs Data, because it is inherently the most complex to deal with and potentially most valuable data source available. Notwithstanding, we expanded the list of candidates to include statistical, company and reference based information providers (non-governmental).  Included on the short list was GTIS, WISER, Kompass, FITA /GlobalTrade.net and a handful of others.

What became obvious over the course of our conversation was that there really wasn’t any one company out there that I would put on the “A” list for one reason or another. The top choice would be PIERS, but since they are a member of a London-based publicly traded media conglomerate, it would be a complex deal to get done. Another problem is that, they are still laboring to overcome a decade of inertia left over from previous management. It is more of a challenge to stop and change the direction of a huge oil tanker, than it is a cruiser. The others really don’t integrate data (connect the dots) to any significant degree.

Really THE KEY, the Holy Grail of Trade Intelligence, is about INTEGRATION: connecting the dots, dimensionalization and visualization of interconnected layers of disparate sources and types of data.

In the movie world, from whence I came a couple of decades ago, a company called In-Three defines dimensionalization as “a method developed by In-Three of converting 2D content to stereoscopic 3D content.”  They employed the technique in the movies Alice in Wonderland, The Transformers and G-Force to give depth and dimension to an otherwise flat celluloid world, pixel by pixel.

How would dimensionalization be applied within the Trade Intelligence field?  Imagine an interactive, visually oriented dashboard designed for fund-managers and financial analysts whereby any given publicly traded company’s vitals could be displayed along with dynamic drill down and reporting capability including (for instance) real-time analytics, risk assessment and competitive analysis partially constructed from U.S. Customs Waterborne Import BOL records as well as other datasets.

Many pieces of the puzzle are there already.  Few (actually NONE) have invested adequate resources, creativity, intelligence and vision to put them together.