BetaBoston

Big Data start-ups getting ready to disrupt

Courtesy of hack/reduce

From electing a president to buying a latte, Big Data is increasingly influencing consumer decisions. The science of analyzing huge troves of data has become such a big business that investors in Massachusetts are rushing to to find the next billion-dollar companies.

For now, much of the commercial use of Big Data is in the form of more targeted advertising — think of those eerily prescient Google ads.

But Chris Lynch, a partner at the Cambridge venture capital firm Atlas Venture, said Big Data analysis can benefit businesses of all kinds and goes beyond commercial uses. Recently, for example, Prize4Life, a Cambridge nonprofit that supports research on the disease ALS, awarded prizes to three winners of its contest to analyze and predict the progression of the illness by using data from thousands of patients.

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Meanwhile, PatientsLikeMe, a social-networking health site also based in Cambridge, aggregates and analyzes data from more than 100,000 patients who report on their conditions, treatments, and outcomes.

Big Data could also help revamp the retail and food-service industries.

Objective Logistics, in Boston, taps into data generated by its clients’ point-of-sales (POS) systems to better identify top performers and to discover what helps products sell better. Typically, each point-of-sale system holds 3 million to 15 million transactions, or anywhere from 2 to 10 gigabytes of data.

“We’ll get as specific as saying you should be selling more Alabama Slammers or molten lava cakes, or pair things together like saying when servers sell this kind of pizza, customers are far more likely to buy an antipasto beforehand,” said Philip Beauregard, the chief executive of Objective Logistics.

Big Data can even get first-time customers in the door: The team behind the start-up SCNVGR’s mobile payment app, LevelUp, tracked sales among its clients based on weather conditions.

The team found fewer customers ventured out when it rained; however, customers who were already in a coffee shop spent an additional 20 percent while waiting out the storm.

Seth Priebatsch, the founder of SCVNGR, said the findings suggest retailers should conduct an extra “push” of marketing, through ads on mobile apps or e-mail notifications, just before a storm to increase sales through what would otherwise be a lull.

Massachusetts is already home to a substantial Big Data community, thanks in part to research at Boston-area universities and a rich legacy of corporate giants in the information technology business. Even so, the state is losing data scientists who are lured away by other opportunities.

”We’re creating 5,000 advanced-degree data scientists a year here,” Lynch said. “But we have been losing them.”

So Lynch and others opened a nonprofit hacker space this month, dubbed hack/reduce, to encourage development in the field by providing researchers with access to large data sets and the computing power necessary to analyze them.

“My view is there are a thousand big-data experts in the world, and I cofounded hack/reduce to create the instrumentation to create a thousand a year,” Lynch said. “We can have a center of competence because we have all the basic raw material.”

And that raw material includes many tough, interesting challenges.

“We have to show how these problems are changing the face of industries,” Beauregard said.

“If there aren’t cool companies that keep popping up and getting seed funding in Boston, people are going to leave for San Francisco.

“It’s a no-brainer: You work around smart people, but you also go to places where companies are working on cool problems.”

There are numerous efforts underway to continue to keep Boston as a center of the Big Data world; there is even a new venture-capital firm, Big Data Boston, focused solely on the field.

If all goes well, some of those investments will grow to be the next SAP or EMC, Lynch predicted.

“We have a real opportunity in Boston if we’re able to galvanize the community,” Lynch said.

Michael Morisy is curator of The Hive, Boston’s online news source for developments in the innovation community, atboston.com/hive. He can be reached at michael.morisy@boston.com.

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