Amongst all of the buzzwords startups use when pitching traders and of their advertising and marketing, “data-driven” is sort of on the prime of the pile. However what does being data-driven actually imply?
Investments are slowing down and VCs are tightening their purse strings. Beforehand trending tech startups in fields like BNPL, crypto and the supply market are struggling to point out the expansion and returns they promised of their preliminary funding rounds.
Smaller startups with extra modest targets can entice VCs in search of safer, smaller offers, however approaching an early-stage enterprise with a data-driven technique is a one-sided method — one that usually disadvantages startups.
Easy however mandatory shifts in mindsets can change the best way startups and traders take a look at information when making main funding choices. Listed here are a couple of ideas:
Cease utilizing unfiltered information
Utilizing uncooked, unfiltered information is widespread at startups that donʼt know how you can correctly filter their data, and so they typically find yourself offloading information irrelevant to their firm and mission.
For instance, donʼt present traders the overall visits to your webpage with out additionally exhibiting the typical length of these visits — veteran traders will choose up on this.
As an alternative of merely showcasing development, showcase your development towards the backdrop of the funding you’ve raised.
Unfiltered information can skew towards biases and trigger extra hurt than good. Many fast-evolving AI packages have unintentionally developed racial or gender biases based mostly on the unfiltered information fed to them. Understanding how you can filter information to correctly inform a companyʼs story is vital to understanding the place an organization shines and the place thereʼs room for enchancment.
To keep away from this, phase your information and use outliers to your benefit.
Filtering information to precisely depict operations and efficiency ensures that you simply’re evaluating apples to apples. Unfiltered information creates a collection of inaccurate comparisons, highlights the fallacious features of the enterprise and muddles vital outliers that VCs search for.