A Better Alt Data Market
A Better Alt Data Market
6 Steps to Fix What’s Broken — and Build What’s Next
By Scott Hall | CEO, AltHub
I’ve spent the last several years working at the intersection of alternative data buyers and sellers. I’ve seen what works, what doesn’t, and where the market keeps tripping over the same problems.
The alternative data industry has grown enormously — but its infrastructure hasn’t kept pace. Trials take too long, too few funds participate, and data providers routinely underinvest in what could be transformative products. The result is a market that’s smaller, slower, and less efficient than it should be.
What follows are six changes I believe would meaningfully improve the alternative data market for both buyers and sellers. None of them are easy. Some are controversial. But I’m convinced every one of them would make this ecosystem more valuable, more accessible, and more sustainable.
1. Trials Should Take Under 30 Days
Let’s start with the most straightforward problem: trial timelines.
A quick survey of data providers shows that the average alternative data trial still takes 75+ days. That’s 75 days of friction. 75 days of delayed decisions. 75 days where both buyers and sellers are stuck in limbo.
Buyers want faster answers. Providers want faster conversions. So why hasn’t this changed?
With modern trial tooling and AI-accelerated workflows, there’s no reason a well-structured trial can’t be completed in under 30 days. That’s not a fantasy — it’s a design problem.
Shorter trials reduce friction, improve decision-making, and benefit the entire market. Every extra week in a trial is a week where both sides are burning resources without resolution.
The alternative data market is mature enough that we should be holding ourselves to a higher standard here. And as we’ll see, trial speed connects directly to several of the other issues below.
2. More Participating Funds Create a Stronger Market
The trial problem becomes even more significant when you consider the size of the buyer base.
Here’s a number that should concern everyone in the alternative data space: roughly 90% of alternative data providers generate under $2 million in annual revenue.
These aren’t companies with bad data. Many hold valuable but under-developed assets. The problem? The buyer base is too narrow.
Today, large funds dominate the alternative data market — and some may prefer limited distribution. That’s understandable from their perspective. But a broader buyer base creates a healthier ecosystem for everyone. More participating funds means more revenue for providers, enabling deeper product investment. It means more differentiated data products with greater depth and coverage. And it means a more dynamic, competitive marketplace.
When high-quality data goes unsold or underutilized, the entire ecosystem suffers. Providers can’t invest. Buyers miss out on signals. And the market stays smaller than it should be.
Broadening the buyer base isn’t about diluting value — it’s about building a market that’s sustainable. Which brings us to one of the most common objections in the space.
3. “Alpha Will Disappear” Is Overstated
One of the most persistent arguments against broader distribution is the fear that wider access to data will erode alpha. I’ve heard this for years — and after working closely with both sides, I think it’s significantly overstated.
Large funds often use thousands of datasets. The idea that any single dataset behaves identically across all their models underestimates how uniquely these teams build. They’re combining, weighting, and layering data in ways that are deeply proprietary.
Yes, some early signals — like first-order credit card insights — may be well understood by now. But many funds continue to extract differentiated value through more granular and proprietary modeling.
And here’s a stat worth noting: credit card data remains the largest monetization category in alternative data. If scale automatically diluted alpha, that wouldn’t be the case.
The “alpha decay” narrative often serves one side of the market more than the other. It’s worth questioning — especially when it’s used to justify keeping the buyer base narrow while providers struggle to grow.
4. “Just Give Us Your Raw Data” Is Largely a Myth
If the alpha argument is about buyers, this one is about the relationship between buyers and sellers — and where it frequently breaks down.
“Just send us the raw data. We’ll figure it out.” If you’re an alternative data provider, you’ve heard this pitch. Probably more than once. And too often, it leads to poor outcomes for everyone.
Here’s the reality: while a small number of highly sophisticated funds can extract value from raw data, most buyers making this request are simply seeking early access before the product is market-ready.
Without proper structuring, documentation, and product design, raw data rarely performs as promised. And when it doesn’t, providers lose confidence and underinvest in what could have been a great product.
A better approach from buyers would be: “If you prepare the data in these ways, it will materially improve our testing and decision-making.” That’s a partnership. That’s how this market grows.
Data providers shouldn’t undervalue their product by giving it away unfinished. And buyers should help providers build something they actually want to buy. That kind of collaboration requires real investment — which leads to the next point.
5. Selling Alternative Data Requires Real Product Investment
The raw data problem is often a symptom of a deeper issue: too many providers treat alternative data as a side project.
They assume they can sell to financial buyers using the same formats built for their core business. It almost never works.
Successful alternative data products require targeted investment. Different formats. Different documentation. Different delivery. The financial buyer isn’t your existing customer — and they have very specific expectations.
Here’s a benchmark worth knowing: generating $1 million in annual alt-data revenue typically requires a 20–30% upfront investment. That’s not trivial, but it’s consistent with what providers already spend developing products for their primary markets.
The question isn’t whether your data has value. It’s whether you’re willing to invest in packaging it the right way.
Providers who treat alternative data as a side project will get side-project results. Those who treat it with discipline will build something meaningful. And there’s one more structural change that could accelerate all of this.
6. Modest Trial Fees Would Improve Market Quality
This last point is the most controversial, but I believe it ties everything else together.
The alternative data market would benefit from modest trial fees.
Right now, most trials are free. And that sounds great in theory. But in practice, it creates misaligned incentives on both sides.
Think about it: nearly every other data-driven industry — ad tech, health data, corporate insights, sales intelligence — charges for access. Why? Because it ensures serious engagement.
When there’s a fee, even a small one, providers are incentivized to deliver higher quality, more complete products. Trial formats become more optimized, leading to faster evaluations. Buyers are more motivated to complete trials and make decisions. And there’s better clarity on timing for everyone.
I’m not talking about pricing anyone out. Even tiered fees based on data readiness could create meaningful incentives without raising barriers.
Free doesn’t always mean frictionless. Sometimes it means no one’s accountable.
Building What’s Next
These six changes aren’t independent — they reinforce each other. Shorter trials require better products. Better products require real investment. Investment requires a broader buyer base. And a broader buyer base requires the industry to move past the myth that wider distribution automatically kills alpha.
The alternative data market has enormous potential. But realizing it means both buyers and sellers need to raise their standards — not just for their own benefit, but for the health of the entire ecosystem.
I don’t pretend to have all the answers. But I’ve been in the middle of these dynamics long enough to know that the status quo isn’t working for most participants. These are the conversations we need to be having.
If you agree — or disagree — I’d welcome the conversation. The best ideas in this market have always come from the practitioners willing to challenge how things have always been done.