Data Vendor Series: Overcoming Buyside Trial Hurdles

At Maiden Century, we work with dozens of leading Alternative Data providers to deliver data products to our mutual customers. Through our IDEA platform, our data partners gain multiple benefits like quicker time to value for their clients and time saved on tagging and mapping their data, making it easily consumable by the end user. In fact, the most common question we hear from frustrated data vendors who are not yet on the platform, is why buy-side firms hesitate to trial their data, even when a trial is offered at a low cost or for free.

 

 

The reason this question is asked so often is a lack of a deeper understanding of the true costs associated with trialing data for an investment manager. First, it’s important to remember that costs are not only monetary. For instance, we estimate that it takes around 625 hours to evaluate an average dataset for an average manager. It takes another 750 hours to fully onboard that data set.

 

 

On average, a manager can be looking at investing $590,000 (assuming a conservative rate of $200 an hour), and that is before paying any fees to the vendor. Add to this the fact that only about one in five trials are successful, you can quickly see how the hidden costs add up.

These costs are often overlooked by the data vendors, but they help to explain the hesitancy of the manager to start a trial.

This is where Maiden Century comes in. Our data partners effectively help their clients circumvent most of that unseen upfront cost by streamlining most of the evaluation and onboarding process. This helps them decrease the cost to trial their data for their customer and decreases the time to value, an essential KPI for the manager. The below chart shows some of the procedural steps that the Platform helps streamline, automate, or eliminate for the client.

 

 

The benefits for our data partners don’t end there. Our partners get the benefit of aggregation with other data sets so that managers can build an entire data mosaic with their data as an integral piece. In addition, our model allows for granular entitlements and permissioning, making it simple for the vendor to allow access of the right data to the right people.

Our partners enjoy higher conversion rates and deeper penetration into their clients’ organisations due to the above reasons and the increased use cases their clients can take advantage of. The costs to the data vendor are a cool zero, even if one of our clients subscribes to your dataset.

Inquire on how to become a data partner today.