The global Big Data explosion and associated analytics opportunities have been well spoken and written about by now, courtesy the Economic Times, NASSCOM Product Conclave and the usual suspect – Gartner. To cite one example, global retailers such as Walmart and Tesco collected tons of customer data through the 80’s and 90’s and then realized that making sense of this data could be instrumental in improving their business efficacy. I still remember reading a brilliant Harvard case in business school, on a casino company in the US that had utilized customer data analytics to drill down to details of individual customers, including how much time each of them was spending inside the casino, and in what part was the maximum time spent. Similar instances of strategically utilizing data also exist in the B2B space. But wait a second – this article is not about the Walmarts and Tescos of the world! That’s precisely the point – as a startup, DATA could be your single most valuable and differentiating asset much sooner than you think.
Most young companies are trying to solve innovative and hitherto unmet needs of both enterprises and individuals. Ventures with attention to detail (or alternately, with VCs hounding them on the board!) end up collecting heaps of business data. What makes this data really valuable is the fact that disruptive ventures end up analyzing processes and business metrics that were unmonitored as yet. For instance, a venture providing ERP software for hospitals can be rest assured that majority of these institutions are not geared up to track even basic customer metrics. Similarly, ventures in the hospitality space would find that even large hotel chains rely on very basic and primitive data analysis to grow their business. SMEs, in particular, operate under extreme resource constraints and therefore, data collection and analytics is last on their priority list, even though every dollar allocated more efficiently or collected more effectively would impact them the most. This is only a small sample of widespread under-appreciation of the importance of business data across sectors.
As investors, we see our portfolio companies as well as other upcoming ventures smartly utilize data capture and analytics. A few cases have been presented below, with the objective of motivating thoughts about how your own venture can unlock value in a similar way:
SMEs as customers – data has tremendous implications for this segment
If your venture has targeted offerings for the SME space, rest assured that your clients will appreciate the value of insights from their business data the most. For instance, if you are offering software products related to supply chain or customer relationship management for SMEs, even basic supply chain intelligence and insights into behavior of their clients can go a long way in helping them boost both top and bottom lines. Another pain point for them is managing sales force, more often than not done manually. Can the data being collected via your offering give them quantifiable insights into how each of their sales persons is performing? You might be pleasantly surprised by how much these smallish companies are ready to pay for these value additions, provided enough bang for the buck can be demonstrated.
Healthcare and medical devices – stakeholders have traditionally failed to recognize value of analytics
As a venture operating in the healthcare and medical device space, I am sure you must be amazed by the total lack of appreciation for data analytics and quantitative techniques by hospital chains, specialty clinics and centers, standalone physicians etc. These segments are traditionally not geared to understand the value of these opportunities, though this is gradually changing with rapid professionalization of management and institutional investors stepping into the space. Ventures that are able to provide value added analytics on patient data can create a significant impact on the space. Understanding more about rural patient data can help chains such as Arvind Eye Hospital and LV Prasad design their rural camps and vision center processes in a better way. Raw data on specific ailments such as diabetes, osteoporosis etc. also provides empirical evidence on impact of new treatments and guidance on their optimization. Commercial multi-specialty chains such as Apollo and Max would be glad to know of any cross-selling opportunities based on footfall analysis of patients across multiple departments. For ventures playing in the healthcare ecosystem, these are add-on opportunities waiting to be monetized.
Any business model with fragmented “point-of-sales” – node intelligence is crucial
Any business that involves fragmented and spread out point of sales or nodes, be it FMCG retailing through mom-and-pop stores, distribution of agri-commodities, telecom services, food outlets etc., intelligence on business efficiencies at each node is crucial. If you are a mobile startup providing logistics management and tracking through handheld devices, analytics on the information being entered by each node can be critical to bottoms-up insights into the business. If you are providing a cloud based mechanism for interaction between on-ground sales force and sales managers at the headquarters, the data being captured in the process holds several answers to optimizing sales processes. While it would be routine to capture these data points, an additional revenue stream for ventures could be creating an analytics dashboard that tells customers what this data is saying. Businesses with fragmented point-of-sales also tend to be capital intensive, in turn implying the presence of deep pocketed customers who will be happy to shell out money for these value-added offerings.
Advent of the cloud – why not provide real-time access to data and analysis for customers
Widespread penetration of the cloud has meant that data can be accessed anytime and from anywhere through web-based interfaces. In several sectors, time lag of intelligence becomes much more important than the data or quality of analysis itself, case in point being logistics, retailing etc. A simple way of providing a value added service to customers is capturing all business data real-time on the cloud, and providing managers with anytime anywhere access to this intelligence. There’s nothing like getting access to critical information and inputs when you need them. Though simple, this initiative is sure to delight your customers, especially the most demanding ones.
For the venture itself – utilize data to refine your offerings
Think about it! Even at the end of say a year of operation, you have this amazing raw data that can potentially help you refine your algorithms, understand the customer’s business better and accordingly tweak your offerings, incorporate these insights into your product roadmap and visualize the next generation of offerings, better estimating your addressable market size by quantifying frequency, amount, price etc. If nothing else, business data can be a valuable internal guiding light for the venture.
The above points have been presented to only provide a broad flavor of how value can be unlocked out of data your venture in all likelihood is already capturing, or potentially missing out on. The possibilities are endless and limited only by a venture’s own creativity.
The views and opinions expressed in this column are strictly personal, and not those of any organization/institution the author is or has been a part of, nor is made in any official capacity of such organization/institution, unless explicitly stated otherwise. None of the information, views and opinions in the column should be construed as business or legal advice.