March 23, 2016
Getting data - and using it - is one of the most important tasks for a startup.
In a recent article, Doing Data for Startups Versus Enterprise: 3 Core Differences, Matthew Ritter explains some of the comparative (dis)advantages of big data analytics in these two types of companies. Ritter focuses on three areas: Data sources, Time horizons, and Politics.
As a startup company doing analytics for large organizations, we have dealt with these issues through the years, and in particular with regards to data sources and access to data. There are some aspects of data sources that are increasingly important - and that potentially change the "balance of power" between startups and enterprises when it comes to access to valuable data.
It's normally an advantage for enterprises that have been in business for a while to have data respositories. Over the years, smart businesses collect and organize information on customers, products, market conditions, and competitors, as well as the internal workings of the company. A lot could be said about the capabilities of enterprises in analyzing and utilizing these data mountains (or lakes...), but having data is a great starting point for doing analytics.
Startups are without data (among other things) and have to go out and get them. In the currently popular Lean Startup / Minimum Viable Product / fail-fast thinking a vital startup activity is getting data and analyzing it. A startup with new and unique business ideas will naturally have to create their own data on customer reactions and product viability.
Getting data for market research and business development is another matter. The fast-developing API economy, described in this Forbes article, is a great opportunity for startups. There are more and more open datasources (here are 20 of them) available through APIs, which means that a smart business can hook up to sources and combine external data with their own. Some of the most valuable data comes with a price tag (say real-time market data), but that's a cost-benefit consideration.
The cloud is another megatrend that can aid startups. It's no longer necessary to build internal computing capacity, not even for storing data. The big players - Google, Microsoft, Amazon, IBM - are working actively to share their Big Data technology with small businesses and startups. Here's a recent announcement from Microsoft as an example.
In combination, open datasources, APIs and the cloud make it possible for analytically-minded startups to eliminate the disadvantages of not having data. And as Matthew Ritter points out, there are a number of great analytics tools that can be utilized - no need for startups to re-invent the wheel. Get ready - set - go!