Network Effect Data, Data Exhaust, the side-effect of network-centric computing... who cares? Intuit, apparently, as they just agreed to pay $170M in cash for Mint.com, a company who's entire business model is built around network-effect data. I have no visibility into Mint or Intuit on this deal, but I can only imagine that the real value was found in the user base, its accumulated data and its unique use of that data, and not so much in the software that "powers" the site itself or even the team. I could be wrong, but this seems like an Aggregate Data play more than anything.
So, if you don't get the value of network effect data or don't want to acknowledge how powerful collecting, analyzing, and leveraging aggregate information from users within your Software-as-a-Service (SaaS) application can be, then avert your eyes from the Intuit/Mint deal... move along, nothing to see here. For those that want to derive as much revenue from your SaaS offering as possible, however, let the Intuit/Mint deal be your inspiration.
I've talked to VCs that say some of their SaaS portfolio companies are worth more for the data they collect than they are for their IP, software, infrastructure, etc. Too many, however, don't know how to properly leverage it.
If you need additional help identifying all of the ways you can optimize your revenue model, and help drive up potential valuations due to these improved revenue models, including efficiently collecting and leveraging network effect data, give us a call... (972) 200-9317 or contact us today.
Author: Lincoln Murphy (You should follow me on Twitter!)