THOUGHT LEADERSHIP

In Conversation with Kate Lyons

FEATURING

Kate Lyons

Deputy Director of Research

M Science continues to lead the alternative data space by relying on cutting-edge thinkers who drive our data-derived insights to new heights. In this installment of our Thought Leadership Interview Series, we sat down with Deputy Director Kate Lyons to get her perspective on the ever-changing data-driven research and analytics space, her role at the firm, and the M Science difference.

Lyons joined the M Science team in 2021, leveraging her extensive experience in financial services, data solutions, and operations to optimize the firm’s research and data offerings.

After receiving her MBA, Lyons served as Director of Operations at a microfinance startup, overseeing loan portfolio and backend activity. She later transitioned to finance, working for The Blackstone Group in 2015, before relocating to Portland, Oregon, where she joined Pacific Crest Securities, a boutique tech-focused investment bank and equity research company that was soon acquired by KeyBanc Capital Markets. While there, Lyons was hand-picked to fill a new, strategic cross-department role originating innovative products for institutional investors, asset managers, private equity, and venture capital clients. In June 2021, she moved into the role of Deputy Director of Research at M Science, where she has since worked with Analysts cross-functionally.

So, Kate, you wear many hats. Can you provide a look into what you do for M Science?

Lyons:

I serve as Deputy Director of Research, a role that has continued to evolve since I joined in 2021. In this capacity, I create strategy for the department, manage our roadmap, help with personnel, and act as a cross-functional communicator on behalf of the department. In addition to being the Deputy Director of Research, I oversee our Product Management, Editing, and Business Intelligence teams.

When I think about our product development, I consider how we can make sure there's standardization and consistency across the products that our clients are receiving from M Science. We're constantly making enhancements and improvements to the underlying structure of our research, dashboards, insights, and APIs that benefit both our analysts and our clients.

I’m also deeply involved with the development of our associates, as well as personnel management. While I don't directly manage our team of analysts, I often serve as a sounding board and resource for them to bounce ideas off of, including managing our roadmap to align our data launches with the firm’s overall goals.

Finally, I serve as a router, a key point of connection between Compliance, Sales, Tech, Research, and Operations. Part of my role is to make sure all these teams feel connected to one another and can work in tandem to advance and improve our data.

That’s amazing! Given your previous experience at a traditional sell-side firm, can you explain the difference between the sell-side and data-driven research?

Lyons:

That's borne, in my mind, out of the shifting landscape of information. Back when a lot of these sell-side firms were founded, access to the research itself was a lot more valuable because there was a scarcity of information. Now, company financial information is ubiquitous, and there's been a lot of regulations that make that information less of a competitive differentiation.

Whereas, looking at the data landscape, to me, it feels like early innings in the same way that sell-side research was pre-internet and pre-Reg FD. The opportunity here is massive. The moat around doing it well is big because it's hard and expensive; data sets are not cheap, and neither is the industry experience our personnel bring to their work. It is a considerable investment, and the fact that it is our thesis at M Science is really important to me. There's a lot more we can do here, and I'm excited for that.

For example, if I'm a client, and I'm looking at Tesla, would I rather hear from a sell-side analyst who has done a bunch of phone calls to Tesla dealerships and asked about sales? Or would I rather work with M Science, which offers actionable insights based on alternative data, such as how many people put deposits down on Teslas?

You’ve just highlighted how M Science is at the forefront of an expanding industry.
In what areas do you think M Science is excelling in this space?

Lyons:

Our competitive differentiator, in my opinion, is the depth at which we combine data sources and insights to tell a nuanced story. It’s where there's controversy, and there isn’t always an easy answer, but the data is out there.

The big firms have access to credit card data; if it's a straight-line correlation, that's less interesting. The M Science difference is that we’re skilled at figuring out how unique data sets, which not a lot of people are taking advantage of yet, can help us tell a piece of the story that is fundamental to the success or failure of a company. That's where the knowledge of our analysts meets the breadth of our data — providing a very nuanced story and to help clients find a piece of the puzzle that they're not seeing today.

Building on that, how is M Science able to expand its research coverage in the future?

Lyons:

When we look at where we want to pick up new coverage, it’s complicated. That’s another difference with the sell-side; if they want to cover a new company, they do so with publicly available data. At M Science, we don't have that luxury, so we look in the data to check if there's any correlation and to determine if it's correct. Sometimes it’s not good enough — it’s too thin. There's a lot of complexity in even just thinking about how we launch coverage. For certain sectors, we think about growth opportunities. We’re constantly searching. We're like an octopus, putting our tentacles into all these caves and seeing what treasures we can find.

There are three buckets that I think of when it comes to expansion. First, there is incremental coverage that we can add to existing sectors and subsectors with our analysts. Evidence of that is in our Birkenstock coverage that we launched in July; our Footwear research already existed, so we were able to add coverage and insights on one more name that our clients had been asking for.

The next bucket is sector or subsector growth, such as a substantial launch of a suite of names that will open new opportunities for us. With our Online Travel research, for example, we made a conscious effort to expand our coverage of that sector and break it out into different styles of companies.

The third bucket includes areas that are completely new and that we don't cover today. For us, that would be Automotives. This is a great example of a totally new vertical for us, allowing us to reach an entirely new group of potential clients.

There’s been recent disruptors in data-driven research, namely the proliferation of AI.
Can you speak on that?

Lyons:

AI is very exciting. We view AI as an opportunity, not a threat. It helps us do the jobs we are already doing with more efficiency and accuracy. For example, Databricks code assist can help build better pipelines. These are aspects that will make our team faster, better, stronger at our current capabilities.

AI can also help our team members with efforts that they are not doing now but want to offer. For us, this includes data investigation, surfacing new analyses, or anomaly detection. Current limitations could be due to time constraints.

Finally, our long-term goal is to allow AI to comment on research or to make more of an impact on the product development side. None of this will replace our people or our work. It's additive -- it will help us expand. It's like the Industrial Revolution; it's helping us grow. We expect more to come from this -- more opportunity, more coverage, more analyses, more insights. This will help us stay competitive and, ultimately, help our clients moving forward.

That’s a fascinating perspective. Looking ahead, where do you see the industry heading?

Lyons:

In terms of the near future, I think we're seeing more data sources come to market rather than fewer, and I expect that to continue. It’s an exciting time to be in this space, and M Science is uniquely positioned to lead the way in providing data sets that unlock significant insights in investment decisioning.

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