Technological advancements over the last century have been constantly accelerating. Therefore, business today is very much defined by technology and innovation. Startups seek to offer new technological solutions and implement the best available tech tools to enhance their workflow. And investors are always looking at high-tech startups for the next big thing. Naturally, in these conditions data on a company’s technological stack proves very useful. Technographic data is used by investors both with startups and with established companies as a lot can be told about business potential by its relationship with technology. Check out Coresignal to find out more.
Data and technology
Various types of alternative data are used by investors to determine the potential values of particular investments. Different data sources provide different perspectives that allow us to make well-rounded decisions.
The role that technographic data plays in modern investment is very important because of the role played by technology in modern business. Technographics follow the earlier established category of firmographics to provide a way to segment the industries and compare firms against each other.
While firmographics does that by referring to various statistical metrics, technographic data is all about the company’s technological stack. It includes such information as data on the hardware and software tools used by the company, how they implement particular technological solutions and update their systems, etc. In short, all information related to the technology used by the firm and how it is handled is considered technographics.
This kind of data allows us to see both the technical preparation of specific companies and the status of entire industries and markets. As data and technology are the two things that define contemporary business the most, coupled together they provide a crucial advantage for both businesses and investors.
Utilizing technographic data for investment decisions
One of the main themes of investing in the 21st century is the value that alternative data sources bring. Since realizing how useful new data types can be, investors have been trying out all kinds of information. Technographic data has certainly been confirmed as among the most important kinds of data for investment decisions.
The great thing about it is that it can be used in multiple ways by financial firms. Here are a few of them.
1) Recognising investment opportunities. Technographic data allows us to recognize the companies that are using better technical solutions than their competition. Additionally, the firms that innovate the most and the fastest will manifest after analyzing technographics. This will help investors to identify the startups with the most potential and other companies that are worth investing in at the next funding round.
2) Market analysis. Information about how various companies are using technology is an important part of a well-rounded market analysis process. Technographic data will help to see which industries are updating and renewing the fastest. Furthermore, the tech products that are used widely and successfully will be easy to spot. Such varied information will create a nuanced understanding of the market and assist in developing best investment strategies.
3) Machine learning. Investors also use technographic data to train algorithms for better AI-based investment models. Machine learning is an important asset for financial firms these days, as algorithms that learn without programming, merely by analyzing data are not only more efficient but often reach better investment decisions. Technographic data allow us to ensure that the training of these algorithms reflects the important factors of contemporary business.
4) Discovering the best tools. Investment funds, just like any other firms, also need to use the best technology to be at the top of their game and compete efficiently. Another great feature of technographic data for investors is that it helps to discover these technological tools that can later be used by the financial firms themselves. Therefore, technographic data not only helps investors directly with investing but also indirectly by improving their technical capabilities.
Combining with other data types
It is also worth noting that investors use technographic data in combination with other alternative data types. For example, online tech product review data is a great supplement to technographics, as it allows us to know more about the tech products that companies are using.
And when combining technographic data with non-tech-related data types, investors can strongly enhance their understanding of the market and particular companies. Firmographics in combination with technographics allow to categorize and rank firms by multiple features. If we add intent and CRM data to that, we have the full set of company data, which leads to an in-depth analysis of a B2B firm.
Of course, there are various other types of alternative data that can be productively combined with technographics for high-quality investment insights. The point is that the more data is used, the better-informed investment decisions will be. And technographic data is certainly the type of information that adds to the quality of those decisions.