Is Big Data Creating A Competitive Edge For Small Businesses?
Big data just might be the best competitive edge for small businesses today. Read on for more information on how it can be helpful.
Big data is transforming the daily realities of running a business. Companies can use big data to handle certain tasks more quickly and cost-effectively than ever. Vince Campisi, CIO of GE Software, Ash Gupta, an executive with American Express, and many other companies use big data to get a competitive advantage.
Of course, big data also raises some new challenges. They have to work in a more fast-paced competitive environment, since there is basically a big data arms race between companies and their competitors in many industries. They must also deal with some unique challenges, such as the inherenet risks of data bias in predictive analytics models.
Overall, big data is a gift to businesses of all sizes. Entrepreneurs should be aware of the unique benefits of big data and find ways to incorporate it into their business models.
Big Data Brings Big Changes to Traditional Business Models
What are the most crucial elements of business success? Here are the most important ingredients for creating a successful startup that lasts. You may find that big data is going to play a very important role in all of these areas.
Product Market Fit – 50%
If you can’t find a product that aligns with the needs of the market, your business simply isn’t going to make it. Fortunately, once you find the right product, everything else is far easier.
Make sure you are solving an urgent problem, with the perfect fitting solution that customers not only want but are willing to pay for. Spend your time getting this right before you try to grow or get sidetracked on other items. The time to tweak and pivot is now – before you invest too much time and resources going in the wrong direction.
You’ll know when you’ve got it. You’ll get the buzz and customers will be lining up.
So how does big data come into the equation? Smart companies are using big data to improve their market research processes. However, as Ken Faro of MIT points out, companies must resolve certain challenges first.
Marketing & Sales – 10%
Marketing and sales can actually account for up to 90% of your business’s success. Marketing is a big part of getting to product-market fit. You have to position it right. You have to pull out the features and benefits which are really most important for your ideal customers. Then you have to let them know what they are. You need to remember that marketing is not about you. It is about your customers.
A lot of super-intelligent tech entrepreneurs completely fail here and it destroys everything else. There is no excuse for this, because big data could help them a lot. Having a high IQ, and great technical engineering ability rarely equates to success in this area. In fact, it can be a huge handicap.
Unless you are selling to equally technical engineers, there is a huge abyss to cross. You will likely need someone from the outside, who is an expert in taking all the geeky parts of your business and turning them into messaging. That’s the kind of advertising that resonates with consumers.
Awareness and visibility are a huge part of your marketing strategy template and approach. You can have the best product in history, and one that is urgently needed. But, if no one knows about it, everything is for nothing.
Big data is great for marketing. You can use big data to more tightly target your messages and get a deeper understanding of your demographic.
This is where you can start creating leads and adding them into your funnel. This is going to feel great. However, remember these three things when using big data to improve your marketing.
- Watch your customer acquisition costs closely, or they’ll bankrupt you
- Inbound inquiries aren’t the same thing as proving product-market fit. You don’t get that until you have actual sales and the users are happy
- You’ve got to close those leads, and it can take very different talents to generate leads versus closing deals.
Big data is key to solving these challenges.
Fundraising – 10%
Your number one job as a startup founder and CEO is to make sure your company doesn’t run out of money. 90% or more of business startups fail due to running out of cash. That can even happen in your best month of sales.
Money alone won’t make your venture work. If your business model is flawed and losing money or you don’t have a product-market fit, then the money is just a band-aid. It’s like pouring another gallon of oil into a car with a giant hole underneath. It might get you another few feet down the road, but it’s not going to get you to the destination. You’ll have to keep topping up, and will always burn more money than you can keep in the tank.
Team Building – 10%
If you’re going to be anything more than a glorified independent worker or one-man band, then your success is going to rely heavily on your team. A great team will make all the difference in your success. A weak team will just drag out the pain and slow the death of your business.
The majority of your time as a CEO should probably be spent on recruiting and hiring the best talent you can possibly get.
The other part of your role as a CEO is really making sure that you are building the right company culture and have your teams all working efficiently. Your people should be aiming to achieve the most important pending milestones and a big vision for the company.
Constant Learning & Self-Improvement – 5%
With a fast-growing team and juggling talking to customers as well as fundraising efforts, not to mention the back end of the business, you are going to have to grow even faster as a leader. You need to be able to make major leaps in your knowledge and skills every few months.
You need to be learning, reading, and consulting advisors every day. You need to invest time in all areas of personal improvement so that you are operating at peak performance every day.
Production – 5%
Making sales and clocking up the money raised is awesome. Yet, you also have to deliver. It’s easy to create hype and gain orders. Delivering on the hype and high-quality products can be a whole different ball game. Make sure you can back it up with your production too.
Your MVP won’t last long either. Once you see some success, you are going to have a flood of competition from new entrants and big, well established, and well-funded competitors too. You must be constantly innovating, improving the flow, and improving the product too.
Customer Service & Happiness – 5%
One of the main areas where startups suffer is customer service. It has to be there. It has to be great.
Customer service may be one of the first departments you really want to build out. Otherwise, you are going to be throwing away thousands of early adopters and even more dollars. You’ll likely never get another chance to win them back or get a return on the PR and marketing that brought them in.
Scale – 5%
You have to be constantly growing because if you are not growing you are shrinking. You don’t only need growth to support the business itself, but also to attract and satisfy investors and maintain talent retention. Something that would be critical when you pursue your exit and you are guided by a good M&A advisor.
Big Data is Crucial for Gaining a Competitive Edge in Business
Every business needs to do everything possible to stand out. Big data is playing a very important role in this process. Smart companies will find innovative ways to utilize big data to their advantage.
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