Every big business started small. We always hear about successful startups and about unicorns. It is very motivating to read about startup’s that made big, the support and investment they received to grow big. Though, launching a startup sounds easy and interesting, that is not the case. It’s a marathon, and like marathons it a really long journey and takes hard work, determination, endurance and dedication to become successful. In this writeup, we can see the importance of data analytics for startups and SMBs.
Does all startups succeed?
A study showed that almost 90% of startups do not survive the first year. The intent of such cold statistics are not to discourage new ideas, but to make them realize the hard facts and work smarter. Though, hard work, good product, excellent marketing, and a dedicated team is a killer combination; it does not always guarantee a successful business. While there are many reasons that can break the success of a startup, something that can to a great extent throw light early on and help these start ups in better decision making is the use of data analytics and Business Intelligence.
Is Data Analytics only for the big guys?
Large enterprises have been exploiting the benefits of business intelligence for a really long time. However, for startups and SMBs, it’s altogether a different story. Lots of unused raw data untapped to the full potential. The notion has always been that data analytics and business intelligence is for large enterprises. However, the reality is that data analytics is critical to any business big and small alike. The challenges faced by all are the same, only the magnitude might be different. Hence, as much for an enterprise, data analytics is equally important for startups and SMBs.
Why are SMB’s or startup’s not using Data Analytics?
The cost and effort, is one of the main reasons why small players are not embracing analytics. Even though there are opensource and self-service BI analytic tools available, the effort and skill that is needed to integrate with the data is tedious. Having a dedicated Data analyst to setup and maintain the analytics is holding them back. Also, the cost with maintaining and training is another factor. However, with tools that have predefined dashboards this issue can be resolved. They do not require a data analyst for setup and maintenance, neither do their require training. You can visualize your raw data in a structured manner on predefined dashboards. This ensures data democratization for all organizations, enterprise and startup alike.
Also, the belief that smaller data sets does not qualify for analytics is another reason. But the fact is, if your company has 10 employees or 10,000; the challenges faced by all are same in terms of customer acquisition cost, churn, sales forecasting, inventory etc.
Why should Startups/SMB’s leverage Data Analytics?
Faster data driven decision from the start
A big advantage of SMB’s and startups are that they have the flexibility to be agile and bring about changes early on. Being data-driven from the very beginning gives them valuable insights or forecasts on the current state of the business, which makes decision making accurate and easy. Data driven decisions, help the start-ups to avoid risks early on and steer the business in the right direction for future growth.
Focused Marketing strategies
Data analytics gives the information on, which market to focus, analysis of customer behavior, which marketing channel to use etc. This helps in avoiding wasteful spending, as you are directing the right product at the right market segment.
Data analysis provide SMB’s with insights on improving efficiency and streamlining the everyday operations. How the projects are running, real-time tracking of service KPI’s, customer feedback etc. Inefficiencies in workflow can be identified to alter processes to make operations streamlined. Also, corrective measures on issues can be taken real-time to provide better customer experience.
Data analytics is super important in sales. It gives a clear understanding of where the leads are lost in the sales lifecycle. It provides insights on where you need to focus to convert more customers, is it at the marketing end or the sales end. Also, helps in pricing the product rightly in accordance to the market segment, competition and the behavior of the customer. All these data driven info helps in developing a concrete value proposition that helps sales in convincing customers.