Premise taps into hunger for real-time data

October 15, 2013 5:22 am

Premise taps into hunger for real-time data

By Richard Waters in San Francisco

The rise in US food prices accelerated in September and has continued into October, according to a detailed study of retail prices – though the US federal government shutdown has robbed financial markets of any official measures of the state of the economy. These unofficial inflation figures, from a US start-up called Premise, highlight the growing use of massive data collection and analysis – known as “big data” – to supplement and in some cases replace official economic statistics.Supporters say that mining digital sources such as the web could provide far more accurate insights into economic conditions than do those supplied by traditional government measures, potentially affecting everything from the trading strategies of hedge funds to business decisions by companies looking to expand into new markets.

“There’s a disconnect between the data and what people experience on a daily basis,” said David Soloff, one of Premise’s founders. The company, partly funded by Google Ventures, the US internet group’s investment arm, is collecting inflation data across 30 countries and already claims two investment funds, a large consumer products company and a government agency among its customers.

The idea of turning to the web to glean deeper insights into economic activity is not new. Economists such as Hal Varian, chief economist of Google, have speculated for some time that the value of information caught in the search company’s trawl of the web could put official statistics in the shade.

Academics from the Massachusetts Institute of Technology launched one such initiative to mine online data, called the Billion Prices Project, five years ago. It has since been acquired by State Street, the US financial institution, to supply global inflation data to its customers.

Premise has gone one step further, tapping into the smartphone revolution to supplement its analysis of web data with the on-the-ground collection of figures in some emerging markets. About 700 part-time workers, armed with handsets running Google’s Android operating systems, collect information on food prices in 25 cities, according to Mr Soloff, and coverage of 100 cities is planned by the end of next year.

Such real-time data collection stands to identify food shortages and price spikes before they feed through into official reports, according supporters. Premise, for instance, claims to have had early insight into the rapid rise in onion prices that began in India in May, leading by August to government intervention to hold down prices in one of the country’s main food staples.

In addition to Google, Premise, which has operated quietly since signing up its first customers earlier this year, has raised seed capital from Andreessen Horowitz, a leading Silicon Valley venture capital firm. It counts Mr Varian and Alan Kruger, a former assistant Treasury secretary in the Obama administration, among its advisers.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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