What are you doing with your data? Is it actually helping your startup or is it just sitting in an auto-updating spreadsheet having not been opened for months? Do you have a plan of action for what to do with the data once you have it? One that will improve your business and help your consumers have a better relationship with you? Before you even think about the word ‘data’, you should have a documented plan of what you want to achieve with it.
In a study published late last year, the Office of the Australian Information Commissioner found that 48% of Australians thought that social media services provided the greatest risk to privacy, 69% were worried about falling victim to online fraud and 49% were reluctant to give their financial details to organisations.
Australians are wary about their data and where it goes, which makes it even more important that your startup is straight and to the point when it comes to transactions with consumers and data collection. Your data collection must be best practice — it should also serve a clear purpose for your business that will improve the consumer’s experience with your business. If it doesn’t, what is the point of having the data?
There is an over-emphasis on data, which is doing two things that are unhelpful to the business community. Firstly, it is diverting attention from core business problems that need to be solved which require clear thinking and quick action. Analysis paralysis can set in quickly when there is too much data involved.
Secondly, it is confusing startup founders who have access to a large amount of information but don’t know what they should do with it. As with the first issue — clear thinking is key. You must have a clear idea of where you believe your startup can improve. Data will prove or disprove that theory and should allow them to take action. Action after analysis is the most important part of the data game.
The problem for a lot of startups, including ourselves, is that there is so much data available. It is tempting to waste a lot of time trying to figure out just what to do with that data and potentially over analyse it with minimal return. Data can of course move your business forward, but there is a very fine line startup founders must tread, making sure that the data they have collected can be put to good use.
So how do you ease the big data drain? You could stop collecting data, but your consumers wouldn’t be getting the best service and your business will suffer. The simplest answer is to provide method to your data plan. Here are five things you have to think about when you are approaching data collection and analysis for your startup.
- What specific areas are you trying to improve by collecting information?
- What are the most important questions you have that need answering?
- How are you going to approach your consumers?
- How are you going to analyse the data once you have it?
- When are you going to action a plan once you have analysed the data?
Have a clear data action plan that takes you all the way from believing there’s an issue to asking your consumers relevant questions, confirming the issue through analysis of data (it could be slightly different to what was initially thought) and then actioning a plan to provide a solution. Without a clear plan along these lines, data collection and analysis has too many stages at which businesses can get lost in the confusion. In this case, data could certainly be hindering, not helping your business.
Chris Koch is the CEO and founder of Pop!