Guest Post – Building a Business on Open Data

I met Terence Gannon at the Cybera Summit 2011 in Banff of this year and was most impressed with his open data business model and invited him to prepare a guest post. Here is the link to the video of that presentation.
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Many efforts to open up public data stores are oriented to the noble but somewhat non-specific goal of more open and transparent public governance.  Intellog Inc., founded in  2008, has a different objective; to use public data as a substrate for building a profit-oriented, job-creating, taxpaying business.  With over three years of experience under our belt, we now wonder if it would have been easier to choose a more conventional path.  Here’s the cautionary tale.

Intellog’s primary business objective is to bring the current generation of Internet technologies to the oil and gas business.  Our first project was to address a surprising lack of a robust, open and systematic way of identifying petroleum wells in the Western Sedimentary Basin.  The solution seemed obvious, so we were surprised when we discovered putting together such a list had not been undertaken to that point.  Our subsequent experience with provincial regulatory agencies — the current stewards of this data — eventually provided us with the reason why.  Saskatchewan is superbly well organized, helpful and knowledgeable staff.  Alberta is at the opposite end of the spectrum, cursed with a toxic combination of creaking, antiquated systems and intransigent leadership. The other jurisdictions fall somewhere in between but are generally pretty good.

In short, nearly four years later, we still don’t have standardized, open well identification to support the development of innovative, revenue-generating applications. We continue to pursue access to the requisite data through the Freedom of Information process which is now due to conclude in March, 2012 — nearly four-and-a-half years since we started down this path. In the interim, the closest we have come is three, competing proprietary datasets owned by private companies, one of which is US-based.  These companies are at liberty to pick and choose their partners and have therefore become the unaccountable, de-facto regulators of innovation.  Want to build the next great application for the oil & gas industry?  Be prepared to make some sort of deal with one of the three incumbent data vendors, and have your cheque book ready. In reality, this first obstacle proves fatal for virtually all start-ups.

Secondly, the inherent ‘goodness’ of open data and the positive light in which it is typically viewed doesn’t substitute for a marketing strategy and creating products your prospective customers want to buy.  There is no such thing as a principled purchase — buying happens when product capability meets excruciating business pain and sometimes not even then.  When we rolled out some initial portions of the open well data, you could have heard a pin drop — our prospects simply did not care, because it did not solve a problem they perceived they had.  Oil & gas companies, particularly publicly traded ones, think in fiscal quarters, so if open data and the applications that use it don’t return measurable value in the very short term, they’ll sit on the shelf unloved and ignored.

Finally, the same reasons which motivate us to use open data, tend also to motivate the use of open source software.  Our experience over the past few years indicates that open source alternatives to commercial products are, without exception, as good and in most cases better than their proprietary equivalents.  Support, albeit of the self-serve variety, is also better, with mainstream open source projects surrounded by enthusiastic and helpful communities.  But we weren’t prepared for the objection along the lines of “we are a .NET/Oracle/etc. (or whatever) shop” being a reason for passing on our product offerings. And yet sometimes that seems to be the case.

The main lesson hard won over the last three years is that a successful venture is built on “customers first, everything else tied for last”.  Building great products and providing outstanding customer support — using whatever set of tools — will eventually get you the  success you want and deserve.  Open source data and development tools can keep costs down and have other attendant benefits, but they are not an end unto themselves.

Bio: Terence Gannon, Founder and President at Intellog Inc. launched his first start-up in the early 1980’s, bringing two word processing programs to the nascent personal computer market. He has since served stints at North Canadian Oils, Norcen, Sceptre Resources, Canadian Fracmaster and Trican Well Services, where he pioneered the use of ultralight business process management tools to increase productivity, and reduce missed or duplicated work. In 2008, Gannon launched Intellog Inc. with the mandate of bringing current generation web-based applications and data integration tools to the oil and gas industry. He regularly campaigns for the petroleum industry to open up its public data stores to be free and widely available to all stakeholders.