4 Things a Data Scientist Can Do for Entrepreneurs
These days, there is no shortage of data -- even the earliest stage entrepreneurs are finding themselves sitting on mounds and mounds of it -- and it often leads to the same question: How can I use this to help me grow?
At The Data Incubator, we train over 100 data scientists to enter industry every year. The fellows have joined with some of the largest corporations in America, including Capital One, AIG and eBay, as well as budding startups such as Betterment and YouNow. They have joined larger veteran teams, and have been brought on to build data and analytics at their companies.
Virtually every type of company can benefit from a skilled data scientist. Here are four major things they should be doing:
1. Growth hacking
Legendary investor Paul Graham is credited with saying "startup equals growth" and it's a lesson every entrepreneur knows well. But startups are often strapped for cash. Having a data scientist focused on growth hacking can take advantage of the huge amounts of social data and web-analytics to implement low-cost, high-impact marketing campaigns that make the most of each marketing dollar.
2. Customer retention
Bain & Company found that just a 5 percent increase in customer retention can increase profits by 125 percent. Because of this, companies are hiring data scientists to increase revenue, extend lifetime value and reduce user churn. Advanced data scientists can analyze customer behavior and target communication to not only keep customers engaged, but to encourage more engagement, and by extension, more purchasing. Skilled data scientists can even identify brand advocates who will evangelize your company to new users.
3. Personalizing products and services
What do your customers really want? Do women really want theirs in pink? What is gen-Y looking for? Chances are, this is hidden inside your sales, marketing and web data. Hiring a data scientist to comb through this can help companies decide to build the products and services their customers really want and differentiate themselves from the competition.
4. Marketing optimization
How are your ad dollars being spent? Are they targeted to your core customers or being dumped into a click farm? Are those ads resulting in actual conversions and purchases? Who is most likely to click? While you may not have the resources for a full-service marketing strategy yet, there is significantly more you can do with your resources than reorganizing your ads based on their cost per click. A trained data scientist can optimize for all these questions and more.
Hiring a data scientist as an entrepreneur is one of the most sound investments you can make in your company. We have covered just four of the most popular ways that they can deliver huge returns. If you are interested in learning more about what the data scientists we have trained are doing, take a look at our blog, where we highlight some of our alumni now working in industry with partners such as The New York Times or Betterment.
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Michael Li has worked as a data scientist (Foursquare), quant (D.E. Shaw, J.P. Morgan), and a rocket scientist (NASA). He did his PhD at Princeton as a Hertz fellow and read Part III Maths at Cambridge as a Marshall scholar.
At Foursquare, Li discovered that his favorite part of the job was teaching and mentoring smart people about data science. He decided to build a startup that lets him focus on what he really loves.