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Why Your Startup Needs to Be Data Mature From the Beginning Data-driven decision making is fundamentally important. Startups make a mistake thinking it is a capacity they can wait to develop.

By Asha Saxena

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


For many entrepreneurs, data is an extravagance that can be overlooked during those early, nose-to-the-grindstone days of launching a startup. You've got more important things to worry about, right?


Data matters, even to startups. Data-driven metrics are key to moving your company beyond survival mode so you can focus on other business goals. Data can give you an edge over competitors and identify strengths that can take your company to the next level. But simply establishing data-driven practices for one or two aspects of your business isn't enough.

To grow into a successful industry leader, you need to make data maturity a main focus from the beginning.

What data maturity truly means.

Companies that utilize data use it in many different ways. Some use it to track sales or employee performance. Some use it to monitor consumer behavior or advertising trends. In these cases, data use is effective but narrow, often benefiting only one or two departments in particular.

Data-mature companies use data to grow and improve the entire organization. An MIT Sloan Management Review study laid out the different levels of data maturity a company can pass through: aspirational, experienced and transformed.

Related: Big Data is Your Sixth Sense for Prospecting Sales

Aspirational companies collect data throughout their organizations, but they only use that information to measure how effective a decision was rather than to actually drive their decisions. Experienced companies use previously collected data to make decisions for the future. Data is integrated into some (but not all) business development aspects and functions.

Finally, transformed companies use data in virtually every aspect of the business, especially for making decisions in the moment and for the future. They often discover new products and services that transform their industries.

It's important to understand where your company stands on this scale so you know what needs to be done to advance -- or mature -- and strengthen your business practices. Begin with these steps:

1. Evaluate where your company stands.

To identify where your company stands on the data-maturity scale, you need to dive deep into your unique situation. Ask yourself whether:

  • Your current data structure gives you consistent information.
  • You have tools installed that provide data assistance.
  • You're paying for data applications that are tailored to your industry and business model.

Then, determine whether you:

  • Make business decisions based on data findings.
  • Get attention outside of your business for your use of data.
  • Are directed toward innovation based on your data.

Use your answers to identify your place on the scale above.

Related: Celebrating the Freedom to Make Data-Driven Decisions

2. Compare your data practices to companies around you.

Take a closer look at how others in your industry utilize data. For example, those in manufacturing and healthcare are typically pretty low on the scale. While they understand the importance of data, they aren't actively using it to make decisions. Meanwhile, companies such as Airbnb, Netflix, Amazon and Uber have used data to upend traditional business models and transform their respective industries. Gather ideas to apply to your company.

3. Set tangible goals.

To move beyond simple data strategies and mature into an industry leader, you must think critically about the ways you can expand data use throughout your organization. First, define clear business goals. Then, come up with an action strategy for investing money in data tools and building a data-friendly infrastructure.

Related: Use Data as Your Secret Weapon to Find the Best Talent and Ensure Their Success

4. Connect data to innovation.

Use your new-and-improved data infrastructure to identify gaps in your products and industry, and to generate solutions to those problems. Utilize data regarding market demand to identify what your customers want. Use consumer feedback and customer surveys to track your progress. Motivate employees to generate good ideas by connecting incentives to motivation. Assess your efforts, and expand upon what works.

Data is fundamentally important for your startup, and focusing on data maturity as your company grows is vital to your success. Establishing a plan to continuously expand and deepen your use of data will set your company apart from competitors and transform your business into an industry leader.

Related: 4 Indispensable Productivity Tools for Every Startup

Asha Saxena

President and CEO of Aculyst Inc

Asha Saxena is Columbia University Professor and founder of Aculyst Inc. a healthcare big data solutions and advanced analytics services firm


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