Data is ethereal, powerful, dense, precious and unrefined -- kind of like crude oil. It just needs to be found and processed to generate revenue and create value for your customers and your company.
Unlike oil, data is everywhere. From the beginning of recorded time to 2003, 5 billion gigabytes of data were created, Fortune.com reported in 2012. But that same amount was anticipated to be generated every 10 minutes in 2013. Everyone is generating and consuming data almost constantly.
That means the sources of data that you can use grow your company and innovate are virtually endless and inexpensive. Just as the Spindletop dome in 1901 ushered in practices that revolutionized the oil industry and the petroleum age, the world today is experiencing a massive evolution in the use of data.
But how can you even begin to harness data to fulfill your specific company goals? Well, just as is the case with crude oil, data needs to undergo a refining process.
Turn to these four steps to get started:
1. Know your goals.
It's difficult to go digging through your data without knowing the problems you’re trying to solve. Adapting crude data for your company without analyzing and refining it could lead to mistakes and misunderstandings and is unlikely to produce insights that will enhance your startup.
Determine the metrics you want to measure and how they will be monitored and communicated to them team. Look critically at the data you find in terms of those metrics and use it to start experimenting.
2. Get the team involved.
Add power to your data by involving your team. Employees’ industry knowledge can help you discover how to use data to benefit your startup.
Integrate the application and infrastructure of your data analysis into their daily routines with dashboards and scorecards that monitor performance. This way, they can help transform the crude data into valuable insights.
3. Collect internal data.
When collecting data from the panoply of databases, networks and clouds out there, create a foundation of data that comes from the heart of your company. What data are you already collecting?
Maybe you’re already monitoring how much time people spend on the landing page of your app. Or perhaps you track the downloads from your site. Expand on the pool of data you’re already collecting to gain insights specific to your customer base.
4. Find metrics that matter.
Once you collect such data and know where your valuable sources of data lie, determine which metrics matter to your company. Establish the right performance measurements for your employees and the right satisfaction metrics for customers.
Refine your data by seeking the strongest measurements possible.
Once you have a solid foundation of data from internal practices, you can explore open data sources, including Data.gov, UNICEF, the World Health Organization and Google Public Data Explorer.
This data can be used in addition to internal data to help you make informed decisions and provide new opportunities for your customers. The Los Angeles Police Department, for example, pairs its own data with open data sources to create an algorithm that predicts where crime is likely to take place. It realized a 26 percent decrease in burglaries in the period of about a year after this data was refined for the department’s specific purposes, the Annenberg Media Center reported in 2012.
Once you’re in the practice of using metrics for your data, you don’t just have to stick to one primary objective. Data refinement can be applied to multiple areas in a business to improve its functions and connect with users. Netflix did that when it transitioned from being a rental service to a huge online resource. Now data is its most crucial practice because it helps the company deliver a personalized experience for users.
Remove harmful and unessential substances from your crude data to realize a pure elixir that will enrich and enhance your startup. Develop your own refinery by collecting and analyzing data according to your company's unique metrics, and you’ll be a data baron in no time.