4 Tips for Harnessing the Power of Big Data
No matter what kind of startup you run, analytics will almost always be crucial. This data will allow you to track product and service adoption, identify customer needs or product issues and communicate the progress to the outside world (like investors and other influencers).
When I founded Travefy, a tool that simplifies group travel, we relied heavily on data collection from the outset. Knowing that our product requires users to go through a multi-step process -- a scenario bound to intimidate or scare off more than a few potential customers -- we’ve dedicated many resources to ensuring that we retain as many customers as possible, along with their info.
Here are four quick tips for making data collection and decision-making a part of your startup:
1. Define what you can actually report. Before you even determine what data to collect and report, you first need to spell out the possibilities. What are the data points you could actually collect? While there’s a multitude of information to be found by analyzing user habits, if there’s no way to collect it, then you can’t worry about it. If you’re not developing an in-house data system, Google Analytics, Mixpanel, and KISSmetrics can help you make these sorts of determinations.
2. Establish what reportable data is most important to your business. Make sure you think through what data points are vital to tell the story of your business. If you have an account-driven business, you’ll want to track the number of accounts. If you have a process-driven business, like Travefy, how many users get through each stage is probably your most important data point. So, sit down with your team and go through all of the available data to choose the best ones to accommodate your business. For some great ideas on how to communicate this data rich information, I recommend reading through anything written by data scientist Edward Tufte.
3. Review this data constantly and learn from it. Now that you have your data dashboard, you need to be continuously studying and discussing key lessons from the collected data. This is a vital step, which will teach you and your team about the way customers interacts with your product. It will also provide insight as to any key changes to your product that will enhance the user experience. Early on at Travefy we saw a big drop off when users were asked to vote for their favorite trip. Investigating further, we were quickly able to recognize and fix a user-understanding issue that only became apparent through testing.
4. Repeat and change things up. Be flexible with some of the data you track to make sure there are no big underlying trends you’re missing. The data you’re collecting isn’t static, so your approach shouldn’t be either. One great tactic we’ve heard is to have one extra data point in your analysis or dashboard that changes on a monthly or quarterly basis.
How do you take advantage of data in your startup? Share your tips in the comments section.
**Apply Now** Are you an enthusiastic college- or graduate-student entrepreneur, eager to share your on-campus experiences? Apply to be a YoungEntrepreneur.com College Treps columnist.
David Donner Chait is a second-year student at Columbia Business School and the co-founder of Travefy, a free online tool that helps groups simplify their travel. He previously served as senior policy advisor at the U.S. Small Business Administration and worked as a consultant at McKinsey & Company. He holds a B.A. in economics-political science from Columbia College.