Auren Hoffman - A Deep Dive on Data

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at joincolossus.com.

**SPEAKER_2** (2:08)
Patrick O'Shaughnessy is the CEO and founding partner of PositiveSum and the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions, and do not reflect the opinion of PositiveSum or O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of PositiveSum or O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:40)
My guest this week is Auren Hoffman. Auren is the CEO of Safegraph, which curates data on physical locations.
He also founded LiveRamp, a public data connectivity business. Auren knows more about data businesses than almost anyone I know and that is the topic of today's discussion. We look at the business of data from every angle and we finish with a fun master class on how to host a dinner party. Please enjoy my conversation with Auren Hoffman.
So Auren, we're going to teach the audience everything there is to know about data businesses today. I think you're the world's preeminent expert on the topic and we're going to not spare any detail. I think your 2x2 matrix for categorizing data businesses is a phenomenal place to start. Everyone loves a good consultancy 2x2 matrix to visualize out there. Maybe you can explain the axes of that matrix, which will allow us to explore all different kinds of data companies.

**Auren Hoffman** (3:33)
Sure. So the first axis I think is really important to understand is, are you focused on what happened in the past or are you focused on what will happen in the future? So I think of those as truth versus religion.
If you're focused on something that's happened in the past, this is a fact. This happened, this is what it is. So if you think of like, experience, did you pay back your loan? That either happened or didn't happen and it's supposed to be true. And then religion is something about the future. So often you'll take those facts, you know, make some sort of prediction about the future. So FICO would be religion where they're predicting some sort of future.
So that's the first most important axis. Where do you want to be on that continuum? And then the second is, do you want to be more of a data business? Or do you want to be an application business that's maybe using data as part of the application?
And then when you're a data business, you're often serving applications and you're helping many, many different applications. But you're really just about facts. You're really just about ones and zeros that you're bringing in. And then when you're an application, you're much more of a solution. And so you have to figure out where you are on that continuum at R. And every company is somewhere on that continuum. If you're a small company, let's say below 50 million in revenue, you can really only be at one place, in my opinion, on that. As you get bigger, if you're a multi-billion dollar company, then you may have some many different bets along that continuum.