Anthea Stratigos – June 24, 2016
It’s not every day a new industry comes along that needs information solutions. Look to just about any vertical and it’s chock full of information providers or media companies, and in most cases a dominant player or two – or three. All very heavily concentrated with a lot of roll-ups having happened and market share concentration at the top. Whether in news, IT research, financial services, legal, education, we could go down the line and point to a handful of players that make up the majority of the market. Even in weather, pharma, or real estate, concentration continues as companies buy companies for growth or build out their part of the value chain and buy and sell companies to deliver more complete solutions to their customers and users. That’s what drives the engine of M&A in our industry and it’s constant.
I can’t think of too many industries that aren’t well covered with a market share leader or two, or three, or four, except agriculture, which is both localized and global but is still ripe for consolidation. There is no Gartner or IMSHealth for that space. And it’s more than just commodity markets and how well corn and pork pricing will do. And there is one more, the newly forming cannabis industry.
How exciting for information and software providers. It’s not every day when you have an entirely new industry forming and green fields for information solutions. Every day we hear of new entrants to serve this space and I wonder how many of them know that with a fresh approach they can build on-trend and integrate data, information or research, tools, workflow, and even community on a single platform. But what we see is companies building with historical paradigms in mind. Anne Holland Ventures says they are a b2b publishing and professional education firm (on trend – see our report when B2B meets Education) and is seeking acquisitions. World of CannaBiz say they offer an education for a nation and have online education, testing labs, cannabiz consulting to contact experts, Cannabiz College, a mailing list and store but no apparent community or data.
Cannabizmedia, tracks licensed businesses, professionals and products with alerts, research, and databases about licenses for sales, marketing, investors and researchers. They market as tracking the marijuana economy.
Don’t get me wrong, these are fine companies and I know many of the founders. What’s also weird, in this era of convergence, while these solutions are born with ‘traditional information provider/b2b media’ in their DNA, there too exists a parallel universe consisting of software providers wanting to serve this industry.
But there’s no legacy in this industry – so how about these cats getting together sooner than later? Who’s creating an analytics driven solution that can take root.
Take this inbound note to me a few weeks ago:
My name is Kyle Sherman and I am the CEO of FlowHub. I wanted introduce myself and call your attention to the growing use and importance of API¹s in the cannabis industry. For example, FlowHub, which provides cannabis companies with an innovative, digital seed-to-sale tracking platform’s working hard to develop API¹s and make them publicly available in hopes of sharing valuable knowledge within the cannabis industry to help it mature and gain strength. If you¹re interested in learning more about these API¹s and the role we think they can play in the cannabis industry, please let me know.
In some cases states are requesting certain software providers, and there may be too many to compete or like most nascent industries they’ll consolidate at some point. But what I loved about FlowHub is they speak about pipes and water. Content and software and APIs to share valuable knowledge. In other words a workflow solution for the cannabis industry. There will be internal information in these pipes, external, potentially community if they build out with an API mindset. Once again the information companies we are seeing develop are going to end up embedding in this software or they must deliver software enabled content solutions or they will be on the outside looking in. This is a brand new industry and there is room for a platform. Who’s going to create that platform is the million dollar question?
It’s green fields and we are watching the innovation to see if traditional paradigms will prevail or someone is going to think outside in, and focus on platform. Right now we see too many seedlings building data or media, or education solutions. And with a clean slate and no legacy there’s WAY more runway for innovation to serve this ‘budding’ industry.
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