David: Thank you for your time today. What brought you to Bizminer and how did you eventually come to acquire it.?
Danny: I started out as a commercial banker at JP Morgan which meant I used industry financial data daily as part of conversations with potential clients and existing clients for deals we were considering. The data that was available then just didn’t cut it, we needed greater granularity and far more information to support informed deal making.
After my time at JP Morgan, I joined a technology business as the CFO/VP of Strategy. While I was there, I learned a lot about how to build and run a software business in the data space. After my stint at the technology company, I started my own consulting firm where I planned to build a product but instead, we focused on providing services and used data to enhance our services. We began aggregating our own data and just needed to collaborate with the right data partner so we could finally deliver the granular data that would be a game changer for anyone using it. I decided that it might be easier to acquire a platform, so I ended up shortlisting potential companies to acquire, Bizminer being one of them, and in 2016 I started a dialogue with its founder, Jon Brandow. At the time, we could not make the deal work. Then in late 2019, we tried again and finally closed in July of 2020.
David: What sets Bizminer apart from competing products?
Danny: Right now, Bizminer is two chunks of data. One is financial statement data, which most of our clients are focused on, and the other is market data. What makes Bizminer unique is the granularity of the data. Competing products are nowhere near as granular, localized, or fresh.
David: Could you talk a little bit about the financial data and the algorithm that makes it all possible?
Danny: Jon Brandow founded Bizminer in 1990 and for over 20 years he worked on identifying different data sources and refining algorithms to break the data down by industry. We are now building on these proprietary algorithms and enhancing our back end to improve the speed and performance. Since our data calculates in real-time, based off the most recent set of data available, speed could be an issue in some instances.
We run thousands of algorithms in a very complex way. This means the industries included can range anywhere from 5,000 industries to 9,000 industries, depending on the data selection criteria. That is why our data is a little slower to load compared to our competitor’s static data. This is another key differentiator of Bizminer. And speed can be addressed, which is why we have partnered with Amazon AWS.
David: Please tell us more about Bizminer’s new platform.
Danny: We are extremely excited about our new offering and it’s going to be a game changer. We built a real web application around the data to create a true research platform. Our goal is to become a comprehensive data-centric research platform for a variety of different markets and needs. We are also adding new datasets to enhance the product offering.
One dataset is around commercial loan data and small business loan performance which complements Bizminer’s existing industry analysis data by adding data showing where loans are originating, which industries they are originating in, and the performance on these loans. It will also include company profiles and a couple of new ratios we have devised from our data.
David: How do you envision it working?
Danny: We’re going to be bringing in some new data sets, so you will be able to analyze the industry, the market, and the company with whatever is relevant for that specific business and scenario.
Say you are an investment banker, and you are looking for companies to acquire or are researching a company for potential acquisition. You would log in, pull a profile, and see the relevant industry information and relevant market information for that business. From an accounting standpoint or as a valuation professional, you are analyzing a P&L and see there are some loan defaults in the company profile. Now you can ask questions about the accuracy of the data that you are looking at in the P&L. This makes it an immensely powerful tool.
David: I know you cannot disclose individual sources, but that is significantly more industries than many of your competitors. Can you help us understand how you are able to do that?
Danny: Everybody producing quality data sets should be deriving data in some capacity off the same system, the North American Industrial Classification System. What makes Bizminer unique is the way we analyze this raw data and delineate specific information.
Some data sets might only be able to look at full-service restaurant or a limited-service restaurant. Bizminer drills down to extremely granular levels. For example, we will give you data on an Italian restaurant versus a pizzeria. And if you are valuing those two businesses, you would know that those are completely different profit margins. Pizza can be to-go versus a sit-down Italian restaurant. And then even within that, there is limited service versus a full service in that category because you might have a high-end sit-down Italian restaurant. That is going to be different to a family style Italian restaurant. It comes down to the way we delineate the data. The restaurant category is one of the best ways to show our level of granularity. This means we can break out sushi versus Thai restaurant versus steakhouses versus Chinese.
David: Are you telling me you would be able to put in the name of a company and it would give you a profile around that company?
Danny: Yes, right now we are estimating we will go to market with profiles for between 13 and 15 million businesses.
David: How do you see valuators using it?
Danny: I think valuators will be able to use company profiles to understand basic questions they might have about a subject business and to give them a better sense of what’s going on with that business. Does the business have liens, poor credit profile, etc. I think as we continue to focus on expanding this profile, more use cases will emerge and creating more value for all of our users.
David: I’m excited to see it in action. Have you finalized the pricing structure?
Danny: Once we launch the new platform there will be a new product set. Users will have everything they have now, some things will be consolidated so users will enjoy completely new capabilities combined with what they had before and then eventually we will start testing different consumption models.
David: When do you think you will go to market?
Danny: By the end of this year, everybody will have access to the new platform.
David: We look forward to seeing Bizminer’s new offering. We always like to get to know our partners, please tell us something about yourself that people do not know.
Danny: I’m a HUGE New York Sports fan. I’m a New Jersey guy and I love where I live. New York Giants, New York Yankees, and Frank Sinatra!
Bizminer provides analytical industry content to thousands of banking, accounting, valuation, CRE professionals and consultants; and over 200,000 business students in almost 100 universities. Bizminer is also the exclusive provider of financial and industry market data services to the International Business Brokers Association. It’s granular, reliable content is licensed by US and Canadian taxing agencies.