Why Startup Entrepreneurs Need to Take Data Seriously In 2020
Using business intelligence data gives you a leg up on the competition.
Startup entrepreneurs face a world of opportunities. But they also face a large swath of challenges and a heavy amount of competition. It's no surprise that data from Statistic Brain shows more than 50 percent of startups in the United States don’t last longer than four years.
While there are many issues that can make or break the success of a startup, one area that is becomingly increasingly important for companies of all sizes is business intelligence. Today’s startup founders have access to a wide range of tools that offer historical and predictive data analyses to spur better decision making.
The problem, of course, is whether startup founders are willing to take advantage of these available resources. In reality, if you wish to see success in 2020 and beyond, you need to start making business intelligence a top priority now.
Improve your time management.
Most startup founders know there is important information contained within their company data, but they make the mistake of thinking they can’t afford an additional software tool. They assume they will be able to find time to look through the information on their own to find insights.
Unfortunately, these good intentions rarely translate into action. As Anne-Claire Herve notes in an article for Innovation Enterprise, polls reveal that 56 percent of small to medium-sized businesses report “rarely or infrequently” checking their data. An additional three percent have never looked at their data at all.
When digging into the reasons behind this misuse of data, a full 33 percent of those surveyed said they didn’t look at their data was because they were too busy with other responsibilities.
As a startup entrepreneur, you have a lot on your plate. From marketing your product or service to gaining financing, there are many responsibilities pulling you in different directions. Poring over minuscule data points can be excessively time-consuming, keeping you from fulfilling other important responsibilities.
By letting a business intelligence tool do the hard work of sifting through data for you, you will be able to use your time more efficiently so that nothing gets overlooked.
Gain the necessary knowledge for smarter decision making.
Business intelligence goes well beyond simply reporting the data. These analytics tools actively look for connections between multiple data sources to help you discover the reasons behind certain trends and events.
Not only can these tools offer insights, but many also offer predictive -- and even prescriptive -- analytics to present workable solutions that you can use to improve business operations. With data insights in hand, you can make more informed decisions that are more likely to have successful outcomes.
Of course, quality decision making depends on asking the right questions of your analytics tools. In a recent blog post, Jim Rich, global VP of sales for Sisense, a BI software provider, says “most companies have similar KPIs: increased sales, expansion into growth markets and territories, improved operational efficiency, and so forth.”
Continues Rich, “The thing is, everybody’s looking for the same stuff […] Truly exceptional companies are those that modify and pivot their KPIs based on a combination of macroeconomics, what’s happening in their industry, and identifying new KPIs that set them apart from the competition. Then you can do things differently and even counter-intuitively. It can make all the difference.”
In other words, you don’t just have to limit your use of business intelligence to sales. Prescriptive analytics can help you determine which blog topics will draw the most readers to your site. Machine learning allows these tools to continually learn as they gain new data and as you ask new questions.
Your competition will be using data.
Business intelligence tools’ ability to help you save time and make smarter decisions as you guide your startup is certainly compelling. However, what is perhaps even more important for startup entrepreneurs to realize is that their competition is increasingly starting to use these tools.
Major corporations are already leading the way in business intelligence adoption. For example, as Wired reports, Netflix uses business intelligence and AI tools to power its recommendation system, which is responsible for over 80 percent of the content viewers choose to watch.
Amazon’s use of business intelligence is perhaps even more impressive. As Jennifer Wills explains in an article for Investopedia, “Amazon’s patented anticipatory shipping model uses big data for predicting the products you are likely to purchase, when you may buy them and where you might need the products […] Amazon uses big data systems for choosing the warehouse closest to the vendor and/or you, the customer, to reduce shipping costs by 10 to 40 percent.”
Business intelligence tools are becoming increasingly accessible to small businesses. If you aren’t using these tools to better leverage your data, you can be sure that your competitors will be using them to gain the upper hand.
Your startup’s ability to leverage business intelligence tools could provide the insights you need to gain more customers and improve your profit margins. Ignoring the insights hidden in your company’s data could cause you to miss out on key opportunities, and even put you at greater risk of serious financial losses. Investing in quality business intelligence tools won’t just help you save time; it could ultimately make all the difference for your company’s future.
Entrepreneur Leadership Network Contributor