Can Startups Truly Grow Their Business and Gain Competitive Advantage with Data Analytics

It all starts with a great idea, something that seems like a wise investment and that’s how most startups come into existence. However, more than 90% of them ultimately end up failing. Matter of fact, every 8 out of 10 startups end up going bust in their 18th month.

That is not to say that you shouldn’t bother with your dreams, and never launch your own startup. The lesson you need to take from these entrepreneurs is not to repeat their mistakes.

Most of the startups fail because they jumpstart their business without any research. Among the top 20 reasons why startups fail, no market need is at the top, followed by running out of cash, lack of a proper team, and getting trampled by the competition. Poor marketing and weak products are also some of the top factors that threaten the growth of startups.

With so many factors threatening their growth, how can startups ensure that they do not lack on any front?

Surprisingly, the solution to all these problems is just one– relevant, accurate and complete data.

It’s truly amazing how data can give startups actionable insights, ones that will not only keep them from failing but also assist them in growing their business and gaining competitive advantage.

Here’s why data analytics is the key to making good business decisions:

Data Teaches Them About the Industry

Market leaders, who have been in business for some time now, know all the ins and outs of their industry. Startups, on the other hand, are still learning how to walk. And yet, when a startup enters into the market, it finds itself competing with the industry giants. Nonetheless, there is a way for the startups to catch up fast, and ironically these market leaders are to thank for it.

A number of wise entrepreneurs recognized the significance of data based decisions early on. When RRD, a marketing communication industry launched their logistics division, they found themselves overshadowed by the industry’s frontrunners, UPS, FedEx, and the likes.  What they needed, was to find optimum shipping rates. Seeing as how a number of variables affect pricing, they urgently needed to predict them in order to avoid losses, and offer the best prices to their client base.

RRD knew they needed to scrutinize data to make a decision, and so they turned to analytics and machine learning. In order to make an accurate prediction, they needed to test every possible scenario, with every variable to find out the real-time shipping charges. And they did find it, 7 days in advance and with 99% accuracy.

The project was so successful, that the business was able to pay for it in less than a year, and from there it was only profits and growth.

Knowledge is indeed power, and where the startups cannot experience things on their own, they can use the data shared by market leaders in all the years they have been in business. When this avalanche of data meets a machine learning algorithm, startups get the information they need at their fingertips. Accurate data helps the startups discern the market they are dealing with, and influences their decision.

Data Helps in Improving Future Products

A business has no destination, it’s simply about launching one successful product after another. This means always striving to create a better product. Even when the previous one is doing extremely well, a business needs to start focusing on releasing the next best upgrade, or a new blockbuster.

Easy as it might sound, even the simplest products can pose a very complex problem at times, leading to an even more complicated workflow. Being inexperienced, many startups fail to pinpoint the problem and fail to simplify the process.

A number of businesses have used data to analyze all the possible variables so that they can manipulate them and resolve the problems rapidly. Data analytic tools allow the startups to recognize the problem area, run predictive analytics to discover the most suitable method of operation, and then apply it.

When the production process is streamlined and optimized in this manner, the end product comes out improved and of high-quality.

Data analytics in the manufacturing industry ensures quality from the ground up. From raw materials to ensuring consistency, to decreasing the production of faulted products, data analytics assists with all. Data analytics even use disparate data to unearth the hidden issues with the products.

Data Fuels Sales with Spot-On Recommendations

Online business can use data analytics to find out exactly which product page is receiving most visitors, and which visitors are repeatedly visiting the website.

All this insight lets the startups recognize their most loyal customers. When businesses have a list of prospective customers, they can lure them further by coaxing them with emails, and sending them personalized recommendations to stimulate sales.

Just like the CIO of $700 million freight company, Scott Sullivan said, “There’s a lot of data within your four walls — be innovative and look for challenging ways to use it.”

Data Analytics Let Startups know their competitors

Wars are won by getting behind enemy lines and data analytics is the best partner for startups to take with them to this secret mission.

When competitors are describing their products, sharing features, and interacting with their customers, and customers interacting back, highlighting flaws and sharing opinions, it is all opening up a Pandora box of data for the startups to analyze.

Data analytics will provide an instant outline of what needs to be improved in the particular niche, the trends, the customers’ demands, and which features need to go etc.

Data analytics tool become the eyes and ears of startups and provide a constant update on what’s going on. When startups focus on what the target markets want and what is it that the competitors are doing and not doing, and base their decisions on it, there’s little chance for them to go wrong.

 Data Analytics Help the Startups Remain Consistent

One of the most common reasons behind the downfall of businesses is the inconsistency in their products. Inconsistency is especially a curse for B2B brands, who eventually end up losing their clients because of it.

On the other hand, remaining consistent is one of the key traits of successful businesses. McDonald’s, for instance, tastes the same everywhere in the world. While not a startup, but Coca-Cola benefitted from data analytics when they started dabbling in orange juice for the first time. The data engineers at Coca Cola identified more than 600 possible flavors and built an algorithm to ensure the same texture and taste in every bottle of their orange juice.

Data analytics is not a temporary or trendy project. When managed appropriately and taken full advantage of, data analytics can become the biggest asset for a startup. On the back of data analytics, any startup can harness growth and competitive advantage. The modern tools of data analytics have eliminated the flaws that used to make startups shy away from using data before. Data analytics is not time-consuming anymore and practically works on its own with minimum human guidance.

The startups that rely on data analytics deliver faster and provide more accurate and innovative products that the customers have no choice but to love–seeing as how they were the ones to suggest it.

Omnisys Solutions helps companies leverage the data they already have to get tangible dollar benefits. With a focus on business value, Omnisys helps its customers make the most of their technology investments and define the right roadmap for them.

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