Analytics for Start-Ups!!!

Starting a start-up is like getting onto a highly turbulent plane ride for the first time. It has its ups and downs and occasionally, one might just feel nauseated. While this characteristic trait does attract many gold-diggers to the life of an entrepreneur, the inability of some to manage ambiguity and risk can be disconcerting. However, entrepreneurs with a flair for analytics, tend to manage this complexity better than their peers.

First and foremost, every great business idea needs to be teamed up with a set of KPIs that need to be measured throughout. KPIs and metrics help transforming aspirations into goals by appending measurable success factors to be achieved within a defined time-frame. Typically, in the nascent phases, it would serve entrepreneurs better if they focus on customer-engagement metrics that helps them chase customers and rather than chasing investors. This is all about getting the users, driving the usage and making money through a very clear monetization model. Once the product or a proposition is in an evolved stage, they can then focus on the metrics for organizational growth. Depending on the nature of the product and/or service being offered, metrics of growth will vary from one organization to another.

Once an entrepreneur, especially in the e-commerce business, has figured out what metrics to measure, analytics can play a major role in helping an entrepreneur manage the anxiety around decision making. This, many a time, is counter-intuitive to the spirit of an entrepreneur, who by very nature, tend to be a lot keener on risk taking and listening to their gut. This is also because of the fact that many a times numbers may not mean what they say. As an example, akin to the fact that footfall does not necessarily convert into sales, “number of clicks” may not necessarily be monetized, unless and until the business model allows the entrepreneur to have a clear stream of revenues.

Even with this caveat, entrepreneur who understand what KPIs to focus on at different stages of business maturity, stand a lesser chance of being rendered devoid of a competitive advantage. Entrepreneurs can leverage analytics to track stream of clicks and their flow (both in and out) and downloading patterns for Mobile apps. Mindful of the fact, there is always a risk of collecting too much data without precise analysis to derive actionable insights. Smart analytics can help e-commerce companies get deeper insights into consumer behavior, likes and dislikes and purchasing patterns. Multivariate analysis can help in testing the web-design, product promotion and pricing strategy. Dashboard analysis can help monitor the business KPIs both in short term and long-run. Finally, entrepreneurs need to understand that number of Twitter followers or number of people liking the Facebook page is irrelevant as long as it doesn’t impact the bottom line. The number of unique visitors to the website may be slightly helpful provided you are able to analyze and derive insights that what exactly is driving the flow!