The role of data analytics in startup businesses.

Is Data analytics really significant in startups?

According to Deblina Dam, “Data science is becoming the backbone of some business” but that’s so wrong… Data science is the backbone of all businesses, especially startups and it plays considerable roles In the growth and success of any startup

The world has been transformed into a digital field by the advancement in science and technology 

Every transaction in life leads to the generation of data. We gather these data, piece them together, try to make sense of it, understand them,  and we use them to make decisions in our startups and already established industries.

The world creates large amounts of data every day from a lot of sources, transforming them into different social platforms. Because of the vast amount of data created every moment, data science and data analysis have been used to examine this generated data to lead to value change, business growth and social change.

Startups are newly created businesses that are making an impact on the global economy. In such a business it is easy for the management to find themselves in a state of extreme uncertainty, limited resources, and exclusive ability to generate ideas for product development and innovation strategies. 

The consequences of these challenges often lead to failure not because of inferior products but due to failed decisions and wrong predictions.

Data science and data analytics have been an indispensable techniques used to reduce the increasing rate of failure in startups and established businesses.

Importance of data analytics in a startup business.

Startups are great but it’s also risky because it is never certain if an idea will fail or be successful. Most times startups count on innovations to be successful but just innovation won’t cut it, data science and data analytics is the best step to success in startups. 

Here are some of the benefits of data science/ data analytics that explain how they can help your business become successful.

 1. Personalization of product/ service.

 Going into production without proper investigation of customer data could lead to; making products that are not needed by customers, and producing outdated products. You can not produce a perfect product if you do not know anything about them. This is where the collection, cleaning and analysis of data play a significant role. Customer data obtained from social media, news outlets, and magazines are used to evaluate the kind of product needed and these products will be designed to the taste of the customers. 

According to a McKinsey study, successful personalization programs yield more engaged customers and drive up the top line. 

 Personalization makes the customers happy and keeps them coming back again. The way to achieve this personalization is through mining and analysis of data.

 2. Profit

Based on the data collected on your customers, you should be able to add profitable features, make successful predictions and channel time and resources on the things that really matter. 

Data science and analytics allow you to skip the phase of trial and error because data collected can improve ideas of what will succeed or fail. According to Ferrari, data collection helped in their personalization program which yielded a “strong positive contribution and led to 10% growth in adjusted operating profit in the quarter. And the bespoke program is expected to continue boosting the bottom line in its third-quarter earnings”

This is how data collection and analysis help increase your profit.

 3. Unique idea

   The market is a pool of competition and unique innovation is what keeps a business from drowning in this pool. It can be challenging and hard to find new ways to make your product unique so it can stand out. Data analytics/science can help you understand the pattern of market behavior and how to respond to it accordingly.

  Data mining is a way of collecting important data from your community of customers to know what they really want. The data that is collected can be transformed into significant information which can help your startup make new and preferred innovations to their products.

Zephaniah Chukwudum, a data analytics team lead said “We ourselves have found that when employees can access the right data, at the right time and in the right ways, they feel empowered to innovate and propose creative solutions with more confidence.” 

The importance of data analysis in an innovative environment cannot be overemphasized.

 4.  Decision making

 It is important to know what your customers want before making decisions. 

 If physical stores are not stocking the right products on their shelves, there will be a decrease in sales. Also if online stores are not selling the right service then they would definitely lose a chunk of their customers.

 This is why data analytics has been employed to analyze data and use them while making decisions.

For a business to succeed, it must be selling the right product to the right people, get any of these wrong and you will fail in your business. 

This is where data analysis comes in. It will provide you with the information needed to make big and small decisions in your business. 

Data analysis can help startup businesses;  forecast the market pattern to understand the demand for a product,  understand how much the target market is willing to pay for a product, help to separate customers into segments and then produce specific products for each segment. 

All these help in the decision making of a business which allows businesses to make calculated and conscious decisions.

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“For our company, data analytics is important for two reasons. First, it gives us an edge because a lot of our competitors are not using data to drive their decisions. Second, in a heavy lead-driven business, we need to quickly test and figure out which marketing channels are producing not only the most leads but also the best ones,” says Nicholas Bond of home-buying company Renovation 320.

Businesses must strive to keep their business up to date, and start-up must strive to grow and stand out in the competitive environment and all these are not possible without data analysis by data analytics and data science. Businesses must pay attention to data analysis because it is a fundamental aspect of decision making and it allows businesses to always be one step ahead, reduce risk, make the customers happy and maximize profit.