Shovels Cuts Licenses and Improves Margins

This shift makes Shovels less like a reseller of someone else’s records and more like the owner of its own data factory. When a customer buys permits, contractor histories, or warehouse feeds, more of the subscription dollar can stay inside the business instead of flowing out as pass through license cost. That matters because Shovels already does the expensive work itself, collecting from thousands of local portals, normalizing messy fields, and linking permits, contractors, and properties into one usable table.

• The tradeoff is operational, not strategic. After removing licensed inputs in 2026, Shovels’ permit count fell from more than 200 million to about 178 million, showing that taking collection in house can temporarily reduce coverage while the company rebuilds connectors and quality controls on its own stack.
  1 sacra
• This is the opposite of aggregator models that stay exposed to supplier pricing. In adjacent data businesses, dependence on upstream content licenses can squeeze margins if providers raise terms or cut access. First party collection gives Shovels more freedom to price long term contracts without that same supplier risk.
  1 sacra 3 sacra
• Control also improves product speed. Because the collection layer is internal, Shovels can decide how often to refresh, which fields to normalize, and how to join records into new products like Decisions, contractor profiles, and cloud warehouse deliveries, instead of waiting for a licensor’s schema or release cycle.
  1 sacra 2 shovels 4 opengov

From here, margin expansion comes from making the in house pipeline denser and more automated. As Shovels adds more jurisdictions, more source system connectors, and more products on top of the same raw collection engine, each new dataset should carry higher incremental value and lower dependence on any outside data owner.