Did you know that 90 percent of startups ultimately fail? Overall, eight of out of 10 businesses will close their doors within the first 18 months. Fact is, most young companies will never survive past their infancy. This shouldn’t discourage anyone from pursuing their entrepreneurial dreams, but it highlights the intense environment all young companies face.
To succeed, especially with fierce competition from established market leaders, these companies have to get scrappy and leverage every resource they have — and that includes data. But there lies a conundrum: younger companies must squeeze out actionable insights from every source of data they have. But typically, they also lack the resources (both time and money) needed to hire expensive consulting firms, data scientists or build up huge teams of expert analysts.
That’s why an increasing number of young startups are using self-service data analytics tools (like Datameer!) to collect, analyze, and act on insights found in their data. By empowering more people within their company to actually explore their data, these companies can quickly level the playing field. This not only increases their likelihood of survival, but it also drastically increases the likelihood of being able to compete with those market leaders.
Data Analytics Can Help Startups Grow
One startup that leveraged their data to compete is SHOEPASSION.com, an online shoe retailer. The shoe market is one of the most competitive and profitable markets in the world. Competition is fierce in every sub-niche and there are numerous companies such as Nike, Prada and Gucci that have more resources and a well-known brand.
SHOEPASSION.com had plenty of data on hand but, not surprisingly, didn’t have the resources to properly utilize it. In stark contrast, larger companies like Amazon and Nike have fully realized business intelligence units. These established giants are able to not only gather huge amounts of data, but also hire numerous staff members just to analyze this data. SHOEPASSION.com couldn’t afford such luxuries, which left them at a disadvantage in the beginning.
SHOEPASSION.com signed up with Datameer when their company was only two years old. Their first challenge was bringing their structured and unstructured data together, which was previously stored in Google Drive, Excel spreadsheets and their ecommerce platform.
Of course, gathering data is only the first step. The real work began with trying to find actionable insights such as:
- What does the data actually mean?
- Where are there opportunities?
- Where are we as a company failing?
SHOEPASSION.com used data to build a 360-degree view of their business. For example, they identified that customers who purchased shoes were more likely to buy matching belts. By tweaking their marketing campaigns, SHOEPASSION.com increased cross-sell revenues by 10 percent.
SHOEPASSION.com also had to address a serious challenge: the company’s finance team was overwhelmed with invoices and had to manually reconcile invoices with payment methods. But with the help of big data analytics, they automated this process to save roughly 40 hours of labor per month.
The Benefits of Big Data Analytics for Startups
By saving money and resources through data-driven decisions, small companies like SHOEPASSION.com greatly increase their survival chances.
SHOEPASSION.com has become one of those startups that survived the brutal early years, and now it’s a thriving company that’s enjoying global growth and success. Data remains a huge part of their efforts.
Almost all young companies can benefit from data-driven insights. In the past, fully leveraging data was simply beyond the means of many y0ung companies. But these days, smart and affordable data analytics tools can close the gap.