Big Data is a big word in the tech world. One look at the highly popular hashtag #BigData reveals how it is gaining increasing credence. There’s a lot of talk about Big Data and how data analytics can help drive and turn around businesses. However, many people and companies are yet to come to terms with what exactly can Big Data deliver for their business.
I remember walking to a major shoe store brand outlet a few years ago. To my surprise, I had to look around and call for someone to help me with what I was looking for despite the store being practically empty. It turned out that the manager too was busy analyzing footfalls to actually monitor how actual customers with those feet that mattered to him were being treated. This left me with an impression that all this talk of data analytics helping business growth needs a rethink.
But that was a few years ago. In the current digital age, what has changed drastically is the digital tracking of data at all levels from all sources imaginable. Companies now had to deal with goblets of data to understand consumer behavior, trends, and various other aspects. This led to the advent of Big Data wherein the challenge wasn’t just getting the right data but actually analyzing and making sense of the absolutely vast amounts of data available.
Through a series of articles, I plan to dwell on the various aspects of business that Big Data and data analytics in general can help unravel. In this article, I intend to cover two simple aspects that can be helpful for entrepreneurs and startup managers.
1. Eliminating guesswork: Let’s keep this plain and simple. One of the major drivers for data analytics is that data allows entrepreneurs and division heads of companies to take decisions based on data. Gone are the days of guesswork. With the phenomenal amount of advancement in technology and tracking tools employed at every stage of transaction, it’s probably more difficult than ever to compensate for data with entrepreneur intuition.
Eric Reis in his revolutionary book, The Lean Startup, emphasizes on validated learning. He goes on to explain that validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects. Decisions at every stage need to be backed up with data.
So, what types of decisions can data analytics help influence? First and foremost is hardcore data that validates the success of your product or service. It’s easy to hypothesize that your latest product or service or the change you’ve made to your website will continue to make waves just because it is unique or presents a new way of looking at/doing things. It will work just because you strongly feel it’ll work. Data analytics and Big Data are all about analyzing that feel based on actual data and then authenticating or negating your intuition.
2. Waking up to new realities: There is this aspect of discovery by virtue of studying data. I vividly recall one of our social media team reviews wherein I was stressing that we should continue to focus on Twitter rather than Facebook. My argument was that we were attracting many more followers and interactions on Twitter as compared to Facebook. Almost everyone across the table seemed to agree till our SEO expert interrupted with data from our Google Analytics account. We’d gotten almost three times more conversions from Facebook as compared to those from ツイッター despite the much lower traffic! This closed the decision around where we needed to focus to get more conversions quickly. This is a simple example of the magic of data analytics.
I would like to invite startup founders and managers and small and medium businesses to share more examples of how data analytics has helped them validate/negate their intuition and discover new realities.