Owning your own startup company seems like a dream come true. After a lot of hard work, networking, and gaining support, you finally manage to start one. With the dream of being the next Bill Gates or Jeff Bezos, it feels like the whole world is at your fingertips.
But, let’s not get too ahead of ourselves. You just started and you have a hundred and one things going on that deserve your attention.
One of the most important items that a founder needs to be aware of is data collecting. If you track your data metrics, it can help you learn what kind of revenue you would be making. It also helps you attract investors and offers insight into your target demographics and how customers interact with your brand. Perhaps most importantly it helps you understand their opinion on your product or service.
Why Collect Data?
There is a benefit to collecting data. It is essential in dealing with effective decision-making, it helps point out the leaky holes of your ship, and so many other options. It also doesn’t matter if you are experienced in founding startups. Data collecting will help make or break the company, and let you know if you are heading in the right direction. Data is so instrumental that following your gut may not always lead you in the right direction. With data, you have the evidence that can support you and your decision-making. This can also help with investors feeling unsure about the business.
The most important thing as the founder is that you need to have a clear path to making profits. Otherwise, you will be in the hole within months. This also helps determine whether or not your business can thrive in the long run. You can have data that relates to all aspects of the business like expenses and marketing, but you can never calculate what the future holds.
There are several metrics that a founder needs to calculate that the investors will be watching out for. These include the Return on Investment (ROI), Customer Acquisition Cost (CAC), and others. All of these need tracked at the very beginning of your startup.
What Data Should Be Collected?
Some basic data can easily be calculated, like sales figures, to understand what is selling, how much is being made, and the average order size, among others.
Yes, swimming in a sea of statistics and numbers can be a daunting process. Luckily, in the age of information, you have many tools at your disposal. Part of the process should be organizing the data. The investors will probably want to see this, so if you showcase the wrong report or unorganized data, then investors quickly will lose interest in your company or even leave it.
However, one key question needs to be answered that will help you collect your data. Depending on where you live, what product will grow sales in that area? Once you know this, then use your data to find the answer.
What Sources Can a Startup Use to Collect Data?
With data collecting, many different types of sources potentially are used to determine your metrics. One of the clearest and most precise sources is the customer. Figure out how the customer interacts with the product or service, with the employees, and with the company as a whole.
If you have a website, then look at who visits. Learn what they looked at and for how long they stayed on the site. Web analytics that collects and tracks data easily handles these types of figures.
Also, determine who is the demographic that interacts with your brand, your website, and social media, as well as for how long.
The good news is that you don’t need to be a tech-savvy person to collect data and analyze it. Through your online marketing campaigns, you can use marketers like Google AdWords and Facebook Ads. Those make it easy to analyze the pros and cons of the business.
Data and Privacy
One of the most important things that a startup or any business needs to do is be open and transparent. If you are collecting data, you need to have an open and honest relationship with the customers. Tell them when you are collecting, what you are collecting, and how you are going to use that data.
Many people value their privacy, so a breach of trust such as a leak or selling the data to others will cause massive backlash and can hurt your business and reputation. Plus, once the customer learns how your business uses the collected data, then it is up to them to decide whether or not they share data as a consumer.
The problem is that most countries have no to little data regulation and law. As a business person and as a human being, it is your duty to be as moral and ethically correct as possible to not lose that trust in the public.
Data collecting is key to any startup. Data helps you gain the trust of investors, make decisions, and keep the business alive. When it comes to collecting the data, you need to have a line drawn that you do not want to cross for the welfare of your business.