Data literally means things given. It's a plural word--which means, by definition, when you have data, you have more than one thing to think about.
It's good to keep that in mind because many businesses, especially startups, make mistakes with data. If you're in a startup and/or working with data, here are five things to keep in mind about what it is, what it means to your business and what to do about it.
Don't Expect Instant Clarity. If your data is any good--and by good I mean deep and robust--it will take time to figure out. Don't expect that your data is going to leap off the page and announce its conclusions and action items. Real data is complex and often contradictory. Rushing to judgments about your data often leads to dead ends, or worse.
Instead, take some time. Share what you have and what you think you know with others--get their thoughts. Consider bringing in an expert or veteran in the field to provide their assessment because those who have worked with your type of data before are likely to see things you don't.
It's an Alarm Clock. Once you have some sense of what your data means to your business, use it like an alarm clock. It should get your attention and get you moving to where you need to be.
When used this way, data will help you and your team make smarter investment decisions of both finances and talent. Don't ignore your alarm clock. Ignoring it will, at best, make you late and could cost you much more than that.
Manual Data. Collecting information yourself or through your in-house team has advantages. First, it's usually the least expensive option. For startups, that's a big deal. Also, you and your team are likely to get more from the information than outsiders.
But manual, in-house data collection has real limitations too. First, while your team may see things in the data, these can be misleading or downright wrong. Experts and experienced hands have learned to avoid the fool's gold of some data points. Moreover, confirmation bias is real. That means, if you think you're selling the post product when you offer a discount, for example, you and your team are likely to find data to confirm that assumption. That's a big mistake.
Additionally, data is a living thing. If your startup is growing quickly, or the market is moving fast, data you pulled Monday may be stale by Wednesday. This means you could spend hours and hours just pulling data, reducing the time and clarity to understand and act on what you're finding.
Diversity Matters. If you're in a diverse market, you need diverse data. At times, this means getting what you think is the same information from different sources. Because people and systems see things differently, you may not have a full sense of your data (and your market) until you study diverse views of the same information.
As you grow your startup, don't be shy about initially paying for the same data services from multiple outlets. You'll learn quickly which source has better tools, better analysis or customer service. Shop around. Don't get stuck in a bad long-term data relationship based on one early call or suggestion.
For New Markets. Tailors used to say, "measure twice, cut once." That's good advice for data too--especially if you're in or about to enter new markets. Measure, get data. Then do it again.
Yes, it can be expensive to ask the same questions twice or more before making a business move. But it's more expensive by far to learn, after the fact, that you were making decisions based on bad information.
Jessica Wesley, Marketing Director at Maven Wave explains that "the possibilities for data-driven decision making are countless for any business, from optimizing marketing campaigns to improving logistics with machine-to-machine data. Data takes the guesswork out of decision making. If you have data to support your decision, you are much more likely to succeed."
When it comes to expanding or exploring new opportunities, take the tailor's advice and measure twice before you get the scissors out.