The Gold of Modern Entrepreneurship: Data
Did you ever ask yourself why Facebook paid reportedly $19 billion for WhatsApp? Or Instagram for another $1 billion? Or why Alphabet (the owner of Google) just purchased Fitbit for $2.1 billion? The answer for all of these purchases is: Data!
Facebook could have easily created the same functionalities as Instagram or WhatsApp – technology wise. But the database that both of these companies acquired over the years, could not be replaced that easy. Therefore, acquiring them was much more interesting for Facebook.
Data are the modern gold of entrepreneurship. With online shopping, social media and wearables that constantly transfer data, businesses have today more access than ever to customer data.
The “Transparent” Man
The transparent man is not a myth anymore. Companies know where you are moving, what you eat, how much you walked, whether you moved, if you are looking for a new job, which books you read and whether you needed to replace something in your household. And this is just the tip of the iceberg!
Everything you google leaves clues on the internet. The internet knows your deepest secrets, your thoughts, everything that you want to know more about. And it may feel creepy sometimes when Google displays exactly the ad that you were looking for. How could they know?
Well, they did not know. They just analyzed what you gave them.
It’s Not Whether You Have The Data…
Access to data is only one part of the story. Analyzing and interpreting it, is a totally different story. Many years ago, I was allowed to visit the innovation center of a large IT provider. They showed me things that I did not even know were possible at that time.
They showed that if somebody posted a negative post about their phone provider on Social Media, they could trace that person down, send them a gift card and guide them to the next customer store closest to their location – in real time! The only thing that restricts them from doing it is legal regulations.
Technically, all of this is possible already today. The trickiest part of data management is mapping data correctly in order to draw the right conclusions.
… It’s What You Do With The Data
Data in itself is not valuable. It is what you do with it. It is about interpreting data.
In order to do this, you need to have an understanding of what you want to do with data. What is the outcome you want to measure? Which information do you want to compare? Against what do you want to compare? Which conclusions can you get from the results? How can you adjust your behavior, your product offering or your messaging to comply with changes you identify?
Many businesses sit on a pot of gold. They collect data – often even without knowledge that they have the information. But they don’t know what to do with it.
For example, many small business owners know how much they earn in a month. They might even still know how many customers they have and how much each customer paid. But how many entrepreneurs really look at their data from a point of:
- Where should I focus my energy on?
- How can I maximize my results?
- Which trends exist? Is the amount increasing or decreasing?
Most entrepreneurs stop at “I can pay my bills and maybe some extra.” But they could be doing so much more.
Which Data Treasures Do You Have?
I want you to really go through your entire business: Which information do you have access to? They can be located at very different places. Your brain, your database, your notes, emails, letters, business cards, your bank accounts etc. Look for everything you have and write it together in one document.
Then think about: What can I use this information for? What can I read in these data? Think about all the different connections that exist between your data. Your sales tell you a lot about your customers, your product portfolio, your market investments and sales. What sells best? Where to focus your efforts on? Do your marketing investments generate a return on invest? Which sales channel works best for you? Do the analysis first.
Once you see the data you have and how they are connected, then you can start planning actions. How are you going to use these data going forward? Will you adjust your product portfolio, target your customers better or focus on a specific market segment? Will you do more recommendation based business, email marketing or advertising? Which of your investments paid off and which ones would you not repeat?
Data analysis is your way to grow your business. Your personal pot of gold. Use it wisely!
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