Data analytics is the process of collecting, storing, and analyzing large datasets to derive actionable insights in real-time. Here, we’ll discuss the role of managed data analytics in scaling a startup and the benefits of adopting the data-driven model for decision-making.
Startups usually begin on a small scale and expand over the years. However, scaling a startup is easier said than done. As per a study by the Kauffman Foundation, just one startup in every ten scales is successful. That’s when startups are worth $1215 billion in 2024, and the value of unicorns around the globe is estimated to be $4.3 trillion.
So how do you scale your startup and ensure success in 2024 and beyond?
Managed data analytics and artificial intelligence are the answers. Startups need to be proactive and take advantage of the data and technologies available in the market to establish themselves. Instead of following conventions and orthodox business models, startups should adopt data-driven models and advanced tools (cloud solutions, AI, ML, etc.) to reduce the risk of failure. Fortunately, plenty of third-party companies offer onshore, near-shore, and offshore managed analytics services tailored to suit the business requirements.
In this blog, we’ll read more about how to successfully scale a startup by investing in data analytics and the benefits of using managed analytics in a new business.
Scaling a business is the process of growing or expanding the operations, products and services, market share, customer base, and returns. Startups scale to invite more customers which brings higher revenue and creates a brand image in the market. However, scalability can be limited to one or specific avenues as well. Not every startup scales all aspects together.
Typically, you can scale a startup in any of the following ways:
Facebook, Twitter (now X), and Amazon are great examples of a scalable startup. These started as small companies run by the entrepreneur and a couple of friends or team members. Over the years, Amazon has become the number one international marketplace and Facebook is one of the tech giants. They heavily invested in business analytics (gradually) to make decisions backed by data and insights. This allowed them to quickly adapt to the changing market conditions and gain a competitive edge.
Startups cannot underestimate the importance of data analytics in modern times. From streamlining internal processes to increasing customer satisfaction, analytics can be helpful in several ways. It converts raw data from multiple sources into actionable insights that employees can access to complete daily tasks more effectively.
Startups don’t have the luxury of taking major risks or investing all the money into a project without basic research. Nine out of ten startups fail and shut shop in less than a decade. This can be due to lack of funds, incorrect investments, wrong decisions, etc. Understanding the target market conditions can reduce the risk of losses and keep the business afloat. For this, you can rely on data analytics to process the datasets related to the market and derive meaningful insights. Third-party companies offer managed analytics solutions and embedded analytics to provide real-time insights whenever you need them.
Customer feedback is vital for every business, and startups need it more than ever. However, you cannot afford to spend your time and resources on manually analyzing this feedback. Data analytics simplifies the process by using powerful tools and sharing the reports through data visualization dashboards. Platforms like Power BI, Tableau, etc., are popular data analytics tools that can be integrated with various input and output systems to provide insights 24*7.
How else do startups use data analytics to grow their business? Managed data analytics is not limited to analyzing the internal aspects of a business. You can use public data to determine who your competitors are and how they are faring in the market. This helps in identifying weak areas in your startup and strengthening them to survive the competition. Similarly, you can track the performance of your competitors and identify growth patterns to plan your strategies accordingly.
Startups face severe competition from existing and new businesses. This means you have to continuously tweak your products and services to increase sales and bring more customers. Data analytics helps by highlighting the purchase patterns and preferences for your offerings and in the market. It provides information about what customers like and how you can improve your products and services to generate more sales or get the desired number of subscriptions.
As a startup, you don’t have access to unlimited funds. You need to make some strict decisions about where to invest, what to prioritize, etc. In such instances, managed data analytics can help by identifying processes or steps that consume excess resources but are not necessary for the business. You can shorten the cycles, automate recurring tasks, and trim areas without compromising quality. It also helps in negotiating better deals with suppliers, storing your inventory carefully to reduce wastage, increasing or decreasing production/ procurement to align with the market demand, etc.
Marketing is another area where data management services and analytics can help your startup. A new business has to invest in offline and online marketing campaigns to reach the target audience. Generating leads is one aspect, and converting them into sales is another. Startups tend to have a hard time converting leads to sales. Data analytics can be used to create a marketing strategy that suits customer preferences. Identifying the right kind of audience and sending the right message to the right customer at the right time through the right channel is possible when you use data analytics.
Revenue cycle analytics gives startups in the healthcare and finance industries a clear idea to streamline their revenue generation avenues. It tracks every step in the process from start to end (payment collection) to identify inefficiencies and errors. In healthcare, it streamlines managed health services for timely filing limits to save time for patients and staff. This helps startups to reduce cart abandonment rates while simplifying the billing and customer interaction processes to eliminate time-consuming steps. It also enables the startups to look for more channels to generate income for the business and increase revenue.
Data analytics improve business performance for startups in the following ways:
With a managed services team to support your business, startups can become more productive and finish work faster in a short time. Even with a limited team of employees, you can handle additional tasks and not feel stressed or burdened. This is done by integrating the business systems with personalized data analytics dashboards and automated tools. It also reduces the risk of employees leaving the business for better opportunities.
Data and system security is a huge concern for every business. Startups are just as prone to cyberattacks as established businesses. Fortunately, AI-based antivirus software and other advanced security solutions can strengthen your business systems. However, you need to identify the weak areas prone to cyberattacks and block attempts by hackers. Employees have to be aware of phishing attacks. Managed data analytics allows startups to identify risks, monitor the systems and network for attacks, and ensure they comply with data privacy regulations.
Many organizations are investing in managed business services to utilize data analytics for studying customer data (preferences, sales funnel journey, purchases, feedback, etc.). This helps gain a clear idea of what will appeal to the customers and how to increase their loyalty to your business. Startups need to focus more on customer satisfaction as they compete with established brands with a loyal customer base. If your marketing, products, and services don’t align with customer requirements, it can be an uphill task to survive competition.
Managed services for financial analytics are necessary for startups to know where to invest their money and when. Unlike global brands, startups cannot afford to face losses or go beyond the budget when working on a project. While personal experience and instincts are helpful, reliable insights derived from business and market data will be more useful in making finance-based decisions. In fact, entrepreneurs should combine their knowledge and data-driven insights when establishing a budget and prioritizing areas for investment. This will mitigate risk and increase ROI.
Business markets are ever-changing and volatile. There will be subtle shifts and undercurrents even when you cannot notice anything different. Moreover, unexpected events (political, social, natural, etc.) can drastically flip the situation. While you cannot predict everything, as a startup business, you should protect your establishment from volatile market conditions and be ready to handle the changes. Management data analytics helps identify hidden patterns and trends in historical data to predict future outcomes. This allows you to be proactive and stay one step ahead of competitors.
Though each business has its growth stage, we can broadly categorize the process into seven stages listed below.
While established enterprises build their own data analytics models, startups don’t have the same freedom or budget to begin from scratch. Managed data analytics provides a perfect solution by offering startups and emerging businesses the necessary data-driven solutions with ready-made and tailored models.
Startups will find it easier to survive the competition and scale their businesses by choosing a dependable managed analytics partner for the long term. The service provider will set up the necessary integrations and automation for your employees to make data-driven decisions. It is a cost-effective, time-saving, and business-friendly method to scale a startup and future-proof it.
Fact checked by –
Akansha Rani ~ Content Creator & Copy Writer
They have the experience and agility to understand what’s possible and deliver to our expectations.
