The Power of Data to Understand Your Own Business

Applied technology has always been an enabler of productivity. It is very easy to see the benefits of using tools, as for a long time they have allowed humans to make things faster, to make more things with fewer materials, or to make things that would otherwise be impossible to make. While the more obvious and immediate purpose of technology tends to always be pragmatic in nature, it’s important to consider that it can also help us see things in a different light and, in turn, think better about a business.

Building a business from the ground up — and then keeping it afloat — requires creativity and vision, which are elements that are easy to take for granted as they’re not exactly quantifiable, and it’s expected that anyone who starts a business will have both. It is also very common for entrepreneurs to put in a lot of effort to develop their creativity in ways that can be applied to concrete situations, like problem-solving, and the same happens with vision, which people want to refine through experience and constant learning.

On the other hand, understanding a business that is already running is not always the main priority, as we tend to assume that we comprehend all its required aspects and that our time will be better spent working on pressing matters. Even if this is mostly true to a fair degree, there are many ways in which we can improve how we see, measure, and think about our business, which in turn will impact its direction. One of the most immediate, convenient, and actionable  ways to do this is using data.

Stressing the importance of data for growing a business seems like a very obvious or even redundant idea, but the point is that we need to go beyond the obvious: data can serve not only to estimate the quantity of a determined product a retail business needs to request from its suppliers in order to meet the upcoming holiday season’s demand, it can also help us understand if our internal processes are a drawback, if our employees are happy, if our vision is too narrow, or even if our business model is the right one.

The first step is analyzing all the data we are already collecting — it doesn’t matter what its original purpose was, or our intention for such data. We need to start looking at it from every possible angle, even if it does not seem useful at first, because eventually, we will begin to see correlations, causalities, or even critical gaps.

One easy example would be an online retailer that is keeping track of all of its customers’ queries; such a data set can inform us if we are selling what people want to buy, which we can use as a guide for our commercial and supply teams. That is a pretty standard procedure. But what if we look closer at their searches and try to make sense of the hour of the day, the day of the week, or maybe the general location of such customers? Maybe we’ll find out that we don’t need to push them to buy from us once a week, but once a month, except in a different quantity; or that we currently sell them ingredients for cooking when ready-to-eat food would make their lives easier; or it’s possible that we keep trying to sell them products, but what they actually need is a service we can provide. Right there is where data insights can help us better understand our own business, leading us to actionable conclusions.

It is not a coincidence that several tech companies that started out in the business of mobility expanded their model into the world of delivery. They were able to do that because they had a thorough and insightful understanding of their customers. More than just knowing how users interacted with their service,  these companies used data to grasp their customers’ lifestyles and needs to the point where they developed new services that added a value beyond their original mobility business.

Data isn’t just a fixed tool that can measure if a company is hitting its sales targets, or if our team is meeting the required KPIs. Data can tell us a story about our community, our industry, and even about ourselves. We just have to be ready to look carefully and read between the lines. Although it will not be always so obvious — because at the beginning we won’t know exactly what we’re looking for — studying our own data with an open mind, and with a willingness to consider all options, is definitely worth the effort, as it gives us the mirror our company needs to look at itself and understand that, maybe, it is time to change, because that is usually something nobody will  tell you before it’s too late.