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Summary:

These days, we are deluged with data, and as a result we’re confusing noise with information, and information with useful information. But what many companies fail to realize is that what matters is what you do with that data — and as a result, they are missing out on a tremendous opportunity.

Yesterday was one of those days when I was dragging my feet, mostly because I stayed up way past my bedtime for the launch of NewTeeVee Station and then woke up at my usual time — before sunrise. The foggy state of my brain reinforced how necessary sleep is for connecting the dots and being productive.

With the sun shining brightly, a walk along the Embarcadero to the office seemed like the perfect antidote. As Celine Roque writes on WebWorkerDaily, “Being exposed to images, sounds, and people that we don’t encounter on our daily routines can give us a fresh perspective we never would’ve gotten otherwise.”

I agree, and my walk got me ready for a spirited discussion with my good friend Pip Coburn, who was previously the technology strategist at UBS but now runs his own research and money management shop. His business is based in New York, but his company is as virtual as any, which in my book makes him a perfect web worker. He hadn’t seen me since before my heart attack, and wanted to catch up. And so did I. Why? Because Pip has the unique ability to look beyond the obvious. Our discussions almost never focus on corporate minutiae; we talk about the philosophy of technology instead.

As we sat and enjoyed the rare San Francisco warmth, we contemplated the issue of data deluge, whether it be from blogs, news outlets, Twitter or FriendFeed. We’re confusing noise with information, and information with useful information, he said (and I paraphrase), and he urged me to focus GigaOM on being not just another information resource but an actionable wisdom resource.

The conclusion of our chat — it’s not data that’s important but what you do with it — carried into my next meeting, with Robert Hohman, co-founder of Glassdoor.com, an online resource for job hunters to get accurate reviews of the companies they want to join

Glassdoor.com, which launched today, is like Epinions for the job market with the rating features of TheFunded added in. Hohman’s co-founders include Rich Barton (founder of Expedia and co-founder and CEO of Zillow) and Tim Besse (also previously of Expedia). The Sausalito-based company is funded to the tune of $3 million by Benchmark Capital, the same firm that backed Zillow (and where one ex-Epinions guy is an EIR).

As it stands, I think Glassdoor has an interesting yet marginal opportunity. But that doesn’t mean I wasn’t intrigued by the idea behind Glassdoor, and what it could eventually offer by analyzing its data in a more meaningful way. I asked Robert if we could take the information he has collected and put it to use. For example, to answer the question: What kind of a relation is there between the CEO’s rating by his employees and his company’s market performance? Robert was kind enough to run a little analysis, and indeed, despite the low input data, in the computer hardware sector there is “clearly a correlation between overall company rating, CEO approval rating and the price/earnings” ratio of the stock.

Obviously a lot more data is needed to get a sharper image of the overall trend, but it makes sense: Loyal and happy employees work harder, make a company better and thus increase shareholder value. This was actionable wisdom out of pure data. I also harangued Robert about his co-founder Barton’s other company, Zillow, and how it missed a huge opportunity to use its data to warn people of the mortgage crisis.

I think a lot of companies are failing to use the incredible resources of data that we have at our disposal with the Internet. I blame this on the marginality of ambition. Even Google, the number nerd’s utopia, as reflected by this post seems to be missing the opportunity to put its data to work. Still, there is light at the end of the tunnel, as some startups are beginning to take notice.

By Om Malik

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  1. i too like the concept behind the glassdoor.com. what concerns me is how accurate the data (reviews & salaries) they are capturing will be. what’s to stop a company from supplying fake data just so that company looks good. or what’s to stop an upset employee from trying to take a company down by supplying slandering remarks? obviously the glassdoor.com has developed filters for these types of things, however, it’s going to happen & how much of the bad data that gets through could really hurt a company.

    similar to hotels.com. i wonder when i’m reading a hotel review whether it’s from an actual guest or if it’s been wrriten by someone that works at that hotel & is simply promoting their hotel.

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  2. Om,

    You said it very well about the need to provide visitors and users with actionable information and knowledge they can actually use in their business or personal life.

    Understanding how your visitors can best use your site and the information contained in it – called use cases – is something that the big blogs appear to be sadly lacking. I believe it’s because you (the big blogs) fundamentally don’t view your websites in customer-focused terms. Instead, you are optimizing to maximize page views, which is at odds with efficient information gathering by your users, because your users want to click as few times as possible to get relevant and useful information.

    Here’s a few questions for you: Have you done a comprehensive user survey of all the existing aspects of your site and potential new functionality and content? Have you done that by use case?

    We’ve done that and the results were quite illuminating…and surprising.

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  3. Om,

    You say there’s a huge opportunity for use of data. What is the single biggest category of information that one should look at on the web?

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  4. what worries me most about glassdoor is NOT glassdoor itself, but companies looking for ways to make private data into money…with little incentive in place, throngs of disenfranchised employees will gladly toss up data and opinions and clutter sites like this with jaded commentary and distorted information (e.g. crappy employees get lower pay and lower bonuses, so numbers aren’t going to work consistently and will ruin averages because the N is too low in total)…

    happy employees want to stay put and move ahead and are far less likely to share information with sites such as glassdoor because they likely RESPECT their employers demand for confidentiality. glassdoor does not. companies like glassdoor are saying, “look, we know they told you not to discuss this publicly and we know that you can get fired for it, like the guy at google who wrote about it on his blog, but we’re gonna make you anonymous and give you a little treat too, so please tell, please violate your employer’s trust. thanks”

    the small 5 person or so team in place at glassdoor ‘checking data and opinions’ that roll in? come on…there’s no need. out of conservatism, just assume that most are lying or padding or have an axe to grind..

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  5. @ pasan,

    I am having a tough time answering your question, mostly because it is too broad. You ask me for category of information – I need you to be more specific. Sorry but need help figuring that out.

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  6. @ Don Jones,

    You bring up some good and valid points, and perhaps we should do a survey of our readers. However, to assume that we are optimizing for page-views is a tad presumptuous I think, especially if you have followed our site and the restraint we show when it comes to selecting the right kind of stories, especially for our audience. One thing I am very cognizant of – respect for our reader’s time.

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  7. :::Robert was kind enough to run a little analysis, and indeed, despite the low input data, in the computer hardware sector there is “clearly a correlation between overall company rating, CEO approval rating and the price/earnings” ratio of the stock.:::

    Om immediately jumps to the conclusion that :::Loyal and happy employees work harder, make a company better and thus increase shareholder value.:::

    Although I’d agree with Om’s truism, I think without some sort of trend data on the three data points for each company it’s a little early to state definitively which way the correlation runs, especially with companies whose employees tend to have stock options as noticeable parts of their remuneration.

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  8. data quality would be an issue here?

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  9. Who’s not UNHAPPY about their salaries or working hours? Who does not feel that you are overworked and underpaid? Understanding where you stand on salaries is good but not the complete solution. We, at Leaders2020 believe that loyal and happy workers exist longterm in a company primarily because of the quality of their job and if the culture of the company fits with their values. The question then is how do you find companies whose culture matches with your values? That’s where our app, OfficeBook on Facebook comes to play. OfficeBook is our way to give back to millions of professionals who seek to work in a place where one is valued for who they are and what they truly believe in.

    http://apps.facebook.com/office-book

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  10. What a great post and reminder about the idea of “actionable wisdom”. There’s a huge focus on quantity of data and materials both in the press/blog world and in corporations, with little enough qualitative balance. Anyone can rehash numbers or link to statistics, but it’s the connections between data points and analysis of data that’s important. Few people want to put in the extra brain power it takes to form useful conclusions. Didn’t we use to call that critical thinking back in school? Why does it seem to be missing in the post-graduation world?

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