Throughout the Digital Age, big data’s reputation has changed. Companies see data sets the same as drilling for oil: It’s invaluable. But this wasn’t always the case. Josh Green has seen the data pendulum swing. As CEO and co-founder of Panjiva, a global trade data company now owned by S&P Global, Green has built his career around finding ways data can assist companies involved in international trade.
He described Panjiva’s journey from operating in a data-less to a data-saturated world with FreightWaves CEO Craig Fuller on the FreightWavesTV show, “Fuller Speed Ahead.”
Panjiva gathers and provides information on trade, including customs import and export data, for the global trade community. Shipment, company and location data is provided down to the individual shipment level. The company’s innovative platform browses nearly 2 billion shipment records to provide useful insights on international transactions.
Panjiva profiles around 8 million companies involved in international business dealings, according to Green. In all, the company gathers data on around 40% of global trade. Because of its far-reaching ability to cover such a large percentage of the global trade community, S&P Global acquired Panjiva early last year.
Green and James Psota co-founded Panjiva in 2006, and they raised venture capital for Panjiva in 2008 just months before the financial crisis. With the economy facing great uncertainty, an investor told Green he’d never raise more money and that his only options were to learn to build a real business or get out of business altogether.
“To me, that was the beginning of the journey that resulted in success, which was us focusing not on growth at all costs but on building something that our customers really valued and would pay for,” Green said.
Panjiva had to revamp its original design to meet customers’ needs.
“The original vision was building a marketplace using data to bring people in and then getting them to transact with each other,” Green said. “We had this grand vision of what we were going to build, but ultimately, when we were forced to be more disciplined, we had to take a hard look at what we were good at, what our customers wanted, where the intersection was, and it was data.”
After the venture rounds of investment, Panjiva’s main focus was providing data.
“We evolved, but the markets also evolved around us,” Green said.
A growing number of people saw great value in trade data, but not all were keen to hop on the data train. Green recalled how hard it was to convince sourcing executives of the power Panjiva’s information possessed.
“We’d go in and show them all this data they could use to figure out which supplier you’d want to do business with,” Green said. “The response we’d get was, ‘Data? We don’t need data. We’ve got an army of people who’ll figure out who to do business with.’”
He continued, “In the early days, it wasn’t so much us trying to get to the head of the pack of people who were providing data; it was us trying to help the market understand how they could use data and that they could use data,” Green said.
Panjiva later focused its attention on finding ways to prioritize data.
“Each record tells you Company A sends Product B to Company C, and it tells you when, how much it weighs. The challenge, of course, is that no mortal can go through 2 billion records and search for insight. It’s just not possible,” Green said.
Panjiva focused primarily on helping clients create supplier shortlists by offering data on key factors, including geographies and companies’ business dealings. Over time, Panjiva’s data evolved to also help factories determine whom to sell to. Logistics companies also came along to find insights on growing market shares.
Panjiva saw impressive growth spanning its first decade in business. Seeing an opportunity to gain from its insights, S&P Global acquired Panjiva last year, as reported by FreightWaves.
The Panjiva platform joined the broader list of products offered as part of S&P Global Market Intelligence, which specializes in financial insights, analytics and intelligence. At the time of the acquisition, Panjiva had just 53 employees.
“To me, as I thought about S&P Global as an acquirer, part of it that was so appealing was the sense of joining an organization that thought similarly about the challenges of working with data.
Green praised the acquisition by S&P Global. He mentioned the company’s data-rich roots, which began with its founder, Henry Varnum Poor, collecting data for his investment guide to the railroad industry. He argued that financial markets were among the first to see value in data.
Green believes both Panjiva and S&P recognize a rising problem in today’s data-rich society: an understanding that data is valuable but uncertainty about what to do with it.
“In some cases, you have not enough data, and in some cases, you have too much data. I think the punchline is, it’s hard to get value from data. I think we saw that as kind of the root problem we were trying to solve, and I think that with S&P Global, we found a company that looked at the world in the same way.”
Green sees data as a tool, not a commodity. Although he encourages the use of big data, he discourages companies from collecting data if they haven’t made prior business decisions. With more data sets available than ever, quality is always better than quantity.
“For me, anytime I encounter an entrepreneur or customer that says they have data and don’t know what to do with it, that to me is a red flag. I think that is an approach that is almost always going to lead to failure,” Green said.
He continued, “I think it’s far better to start with a business decision that you’re trying to inform and work backward to say, what type of insight might help me make that decision? Then backward from there and say, what data may help me get to that insight?”