Prevedére Inc.: Better Data and Better Decisions Impact Customers’ Bottom Lines
That’s kind of how it was for Rich Wagner, founder and CEO of Preved, a Dublin-based firm that helps companies use big data to make better business decisions and improve the bottom line.
The Prevedére story reads like a textbook example of entrepreneurship.
1. Entrepreneur understands the market first-hand, identifies a large problem that lots of customers need to solve, and comes up with an innovative solution.
Wagner was director of IT strategy at Momentive Specialty Chemicals Inc. when he recognized that there was a gap in the data analysis tools that companies were using to forecast.
“I was working with business intelligence,” he says, “and realized that for the IT team to really leverage the internal reports and data they already had, they needed to correlate those internal results with external micro and macroeconomic data.”
2. New company creates a prototype, protects the intellectual property (IP), and signs up a referencable beta customer.
With the support of the executive team at Momentive, Wagner built the application and stepped out on his own, launching Prevedére with a $300,000 investment from Rev1 Ventures and Momentive as the firm’s beta customer. (Prevedére owns the IP; Momentive has license to use the product.)
3. Startup’s approach to product development is combination of “make” and “buy.” There is a protected “secret sauce.”
Prevedére is Italian for “to foresee.”
The company uses unique software algorithms to mine publically available and subscription-based data (from sources that can be as diverse as commodities futures to something called the Misery Index) to build forecasting models that are specific for each business, product line and market.
“For every company, there are leading external economic drivers,” Wagner says. “Companies have an idea of what they should be watching, so we always start there. Our system correlates each internal data point with external variables and tells us what the leading economic indicators are for that particular company.”
The availability of data and the price points of the immense computer processing power available today make this kind of number crunching possible.
Wagner says that often company executives and managers may have a gut feel for predictive factors, but that the Prevedére correlation engine can bring in indicators that clients didn’t realize existed.
4. Solution delivers a value proposition that customers will accept.
“We go in and help companies solve specific problems,” Wagner says. “What’s driving their demand? What’s driving the cost of raw materials? What markets should they enter?”
Prevedére is cloud-based and helps companies make better short-term and long-term strategic decisions which can result in cost savings from inventory and other assets. There is the potential to grow revenue by anticipating and seizing market opportunities.
“Fact-based decisions strip the bias out of sales forecasting,” Wagner says. “Cost savings that come from the right decision can be worth millions to a billion dollar company.”
Prevedére also can have a direct impact on sales force productivity and the time the sales and finance teams spend preparing forecast by replacing time consuming bottoms up forecast process with more timely and accurate rolling monthly forecast.
“For large chemical companies, retail/consumer goods companies and chip manufacturers,” Wagner says, “improving forecast accuracy by a few percentage points can save millions in year-end inventory write-offs.”
5. Market is huge. Solution will scale.
There are 20,000 plus companies that match Prevedére’s profile for an “ideal customer.” Business is up 5.5X year over year. The company released a tablet-enabled version of its award winning application Q1 this year.
Prevedére’s customer list is as varied and diverse as the Dow. “The larger a company is, typically the larger number of indicators they need to follow” Wagner says.
Prevedére has worked with companies like BMW, Advanced Drainage Systems, Timken, and RaceTrac Petroleum.
“We also have clients who are in consumer goods, where wheat, beef, and corn, and packaging materials are important factors to model,” says Wagner. “This kind of analysis and capability has attracted leading private equity and hedge funds as well.”
Prevedére’s market opportunity has attracted angel investment from C-level executives in current customers and industry experts across North America and Europe.
The company was recently selected as the 2014 Innovation Award winner in Forecasting and Planning by Innovation Enterprise, a leading Financial Industry group owned by CFO.com.
In addition, earlier this month, Gartner Inc., a leading research and analysis firm recognized Prevedere in the list of “cool vendors” is the 2014 Cool Vendors in Information Innovation report.