SC
Strategy Map›Layer 4 · Product Strategy›Grows as you use it+ from outside the named canon

Data Exhaust

What is Data Exhaust?

Ordinary delivery of the product or service generates data as a by-product. The company keeps the right to use that data and puts it to work beyond the transaction that produced it, in a separate product or for a separate buyer.

How Data Exhaust works

The core business pays for collection, so each further use of the data adds little collection cost. The data is exclusive only when a rival cannot collect it the same way. A larger core business produces more exhaust, but the exhaust does not by itself enlarge the core business. The asset is most valuable when it joins data streams that are worth little apart and are unique together.

How companies won with Data Exhaust

From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.

vs. ASCO CancerLinQ · 2014–22

Flatiron Health

Sell the same data to every drugmaker

What it did
Pfizer from 2014; Roche's 2016 purchase agreement non-exclusive
ASCO CancerLinQ
Licensed the database to two vendors for fixed annual payments (December 2017)
Read the Flatiron Health case study →
vs. Foundation Medicine · 2016–20

Guardant Health

Test volume becomes a biopharma data business

What it did
40+ biopharma customers, top five at 34% of revenue (H1 2018)
Foundation Medicine
Owned by Roche, a drug maker, after its $2.4B acquisition (2018)
Read the Guardant Health case study →
vs. PayPal Here · 2012–25

Block

Free register and loans run on the payment flow

What it did
Free iPad Register with items, staff and analytics (Mar 2012, 1M+ merchants)
PayPal Here
PayPal Here was a reader and app (2012); PayPal Working Capital lent on online PayPal sales, not Here (Sept 2013)
Read the Block case study →
vs. Foundation Medicine · 2015–18

Tempus

Own the lab so every test yields a matched molecular and clinical record

What it did
Sequencers refused to share data, so Lefkofsky built a lab and began with Northwestern patients
Foundation Medicine
FoundationOne profiled tumor DNA (324 genes, FDA-approved Dec 2017)
Read the Tempus case study →

Also tagged: Inovalon · Sermo

The question to ask of a company

What data does ordinary delivery produce, what right does the company keep to it, and what further use or buyer does it serve that a rival without the same delivery could not match?

Who names it

AuthorWhat they call it / where it appears
Abraham Thomas +Data exhaust: data collected or generated as a by-product of the core business
Casado & Lauten +Data scale effects, as distinct from data network effects
Note. When the further use is improving the product for other users, that is Data network effects, not this tag. Data Gravity concerns the customer's own record serving the customer's further uses; exhaust is data the company keeps and uses beyond that customer. Data bought, licensed, scraped or collected as the product itself does not qualify. When exhaust supports a defense, tag the defense separately (Accumulated assets, Scope economies, Cornered resource). Record whether the company joins data streams no single rival holds together (Thomas's unification): in the first corpus pass it separated Tempus (joined molecular and clinical records) from Flatiron and Sermo (one stream each). A second buyer whose interest runs against the users who produced the data is a known failure (Sermo).