Data. Once a flimsy fly-by topic, now a contentious topic of tension in the business landscape. But what exactly is it? Put simply, data is a collection of facts and statistics collated for a specific reason, such as for analysis or reference. Let’s be honest, data is not the most exciting part of business, and founders would be forgiven for wanting to leave it to trustworthy members of their team to handle. However, startup founders need to know the basics of data not only so they are aware of any legal implications, but so that they can protect their users and provide them with the best service possible.
Why do startups need data?
Without data, businesses know very little about their users and how best to cater for their needs. It allows startups to personalise features and cater content for specific likes and dislikes. For example, if a customer decides to leave your service or cancel their subscription, businesses need to know why. In the same way, by giving lots of opportunities for user feedback, businesses can improve their service and ultimately make it better for the customer.
But data isn’t all about the customer. It is equally important to collect data from competitors so you can see what does and doesn’t work and what you offer that they do not. Alternatively, if a business similar to yours is out-competing you, data collection can help you understand what they are doing right and where you are going wrong.
Data might not seem like an important aspect of growing a business for first-time founders in the early stages of their startup. However, it is an essential part of startup growth, allowing founders to see what their users want from their business. For example, when trialling your product with an MVP, you will need to get feedback from those using the product, otherwise, you won’t know how to improve it for them. Moreover, by getting familiar with data collection now, you can be better prepared for when you absolutely need it as your startup grows.
Where do startups get data?
1. Archives - By going back through company emails, complaints, social media messages, letters and phone calls, you might find a pattern emerges. Maybe complaints are repeatedly being made, or the same questions are being asked over and over again.
2. Analytics - Analytics might seem like a confusing concept, but software such as Google Analytics can support businesses to track website traffic and automatically analyse the data without anyone having to lift a finger.
3. Surveys - The best way to get feedback from users is to ask them for it directly. However, you might have to find interesting ways of enticing users to participate. Giveaways, fun games and contests all help get customers on side. Keep your surveys as short as you can and don’t ask for lots of long answers (customers don’t care for 30-minute surveys!)
These are just three of the many ways you can collect data, but regardless of how you get the data, the most important thing is to do something with it. There’s no point in data collection if it’s just going to sit in your email box gathering virtual dust.
In 2018, the General Data Protection Act (GDPR) was introduced to protect service users from breaches of data privacy. This entitles them to privacy and to the knowledge of where your business will be holding their data, among other things. It is essential that all businesses, including startups, adhere to GDPR otherwise you can open yourself up to complaints, fines from the government and a bad reputation among your customers! Having said that, GDPR and data collection is not that scary. Getting familiar with it now will help your startup better prepare for anything around the corner.