Premise Creates a Global Economic-Activity Tracker, One Snapshot of Onions at a Time
A stealthy company called Premise has built a massive microeconomic database of the world’s consumer goods, updated on a daily basis. It combines scrapers for online e-commerce data with a global street team armed with a mobile app to keep daily track of what’s on sale, how much it costs, where it’s displayed and how it looks.
Based in San Francisco, year-and-a-half-old Premise is backed by Google Ventures, Andreessen Horowitz and Harrison Metal, and advised by economic heavyweights including Google’s chief economist Hal Varian; Alan Krueger, former chair of the White House Council of Economic Advisers under President Barack Obama; and Matthew Granade, the former head of research at Bridgewater.
Who wants this data? The companies that make the products, hedge funds and banks trying to assess inflation, and government agencies tracking food supplies. Bloomberg started including Premise’s inflation data in its terminals in August.
Customers pay $1,500 per month or more, and educational and nonprofit apps get access for free.
In my limited experience, the way Premise can drill down on any store in 25 cities around the world, to show which Procter & Gamble shampoo products are on offer, or how healthy the tomatoes look today, is a crazy sort of power trip.
For instance, Premise CEO David Soloff, who founded Metamarkets, took me on a tour of Indian onion prices from this summer.
Soloff said Premise detected, as early as June 2013, a material increase in price per kilogram of onions by its street team taking daily measures of 7,000 different onion prices in markets and stalls in cities like Mumbai, Chennai and Kolkotta. The street team’s picture showed onion color diminishing, smaller sizes and lower stock, which could indicate shortages and hoarding.
Onions are a crucial Indian staple, and a leading inflation indicator for the country, but the Indian central bank didn’t react to the price increases to change interest rates to strengthen its currency. Newspapers didn’t start reporting the spike until late August. It took protests and a tripling in price until the currency finally got moved in early September, Soloff noted.
That worked, and prices declined 30 percent to 50 percent (though they’ve since spiked again).
Soloff suggested that the Indian government could have saved itself a lot of trouble by using Premise, which triggers a manual analysis anytime a price moves 15 percent on a 30-day basis.
“We see the peak being talked about when it’s already being resolved,” Soloff said. “We have a reliable granular read on inputs, rather than waiting for official bodies to speak about it. We’ve built a better mousetrap to capture data at scale.”
I had wondered in a recent article what further opportunities there were for mobile crowdsourcing, given the success of Waze’s traffic reporting. Some of the answers were weather, crisis mapping and wireless-signal tracking. Premise, with its street team of 700 workers, mostly students who put in an hour with the app a day, takes mobile crowdsourcing to the next level.
What Premise doesn’t know is whether people actually buy things — only details of what’s for sale at the places they shop. But Soloff claimed that that’s the next step. He said Premise is pursuing integration with checkout scanners so it can produce estimates of consumption and gross domestic product.