Narrative Science, which specializes in software that can take data and turn it into a narrative, landed $10 million in additional funding and USAA as a customer.
USAA, a large insurance and financial services company that focuses on U.S. military customers and their families, also invested in the company. Narrative Sciences said the venture round included a USAA subsidiary, Sapphire Ventures, the venture arm of SAP, and Battery Ventures. Narrative Science said it will use the money to invest in engineering, sales and corporate development.
Narrative Science’s flagship software is called Quill, which is a platform that turns financial data into a story. The theory behind Narrative Science is that dashboards for analytics and business intelligence only go so far. Visualization tools also need a story behind them and data that can be presented in plain English.
Landing USAA as a customer is in keeping with Narrative Science's focus. Narrative Science received some attention because it was used to take data and turn them into articles. Journalists love nothing more than writing about software that's a threat to their jobs. And Narrative Science, which was hatched at Northwestern, is writing earnings reports for a few media outlets like Forbes and business reports for B2B publisher Hanley Wood.
However, the bulk of Narrative Science's customer base is in financial services. For instance, Narrative Science's Quill can take returns, portfolio holdings and other data and create a shareholder report quickly. Via Quill's settings, the firm can customize, highlight areas of focus and lead with items it finds important. Narrative Science's technology has broad reach, but the corporate strategy revolves around tackling verticals such as financial services, government and media.
We recently caught up with Narrative Science CEO Stuart Frankel and Kris Hammond, chief scientist and co-founder, to talk shop. Here's a look at the highlights:
Why do we need a narrative? Frankel and Hammond both argue that humans best absorb information via stories. Dashboards and fancy graphics only go so far, but certainly have a role. "Over the last two or three years, it's clear that there are large problems to solve. There is a lot of data and it's more difficult to get insight," said Frankel. Hammond said that the front end of data today has been created by data scientists via graphs and charts and the model doesn't scale. Narratives are needed to help give information that can be acted on quickly. "For many people analytics is getting data out of a machine and that means you have to deal with a spreadsheet or dashboard," said Hammond. "You are working with the data on its terms. It needs to be more human friendly." In other words, the concept that every worker has to be data literate is wrong, explained Hammond. "The business intelligence industry is basically saying that it can't communicate with regular people," he said.
Visualization: Friend or foe? Both Hammond and Frankel said that narratives are complementary to visualization and the two go together well. In fact, Quill can create and insert charts. However, visualizations that are used inside of narratives can be more powerful because they can bring out key points and suppress graphics based on data that doesn't tell a story.
The financial services use case. The primary use case for financial services is creating investment reports and research. That process, which would take weeks to months and an army of people, has now been automated via Narrative Science. "We create a usable document that can scale whether you want one or two or 100s of thousands or millions," said Frankel. Mutual funds can configure Quill to use their voice and approach. That's the reason why Narrative Science reports don't all read the same.
How does Quill work? Hammond noted that Quill is not a template. The artificial intelligence finds the most impactful metric and then explains its impact both positive and negative. It then runs time series and analyzes decisions that were made. In financial services, Quill has a great test bed since the industry is regulated and there is plenty of data because of filings with the Securities and Exchange Commission.
Other verticals. Hammond noted that sports is a key industry for Narrative Science and the company has an app that can take scorecards of youth basketball and baseball games and write a story. Frankel considers youth sports as a "wide micro audience." That story can be created in minutes and be passed around between 10 to 20 people. Manufacturing, retail and medical billing are also areas that are ripe. The idea is that Quill can take data and create messaging and explainers. Pharma and health care are other key industries since there's a high level of quality data.