How Entrepreneurs Can Win With Big Data
Entrepreneurs and startups operate within a David versus Goliath environment. With small budgets, limited staff and inexperience, they somehow have to find a way to make a name for themselves, and compete against much bigger organizations. Big data offers many promises in a number of different industries, but does it have the ability to help small businesses?
Big Data Analytics
The importance of data, often referred to as big data, is a fairly common topic these days. The idea is that all the information we create every day, whether on social media or in-store purchases, could help companies better understand things like consumer behavior. Then, using big data analytics, organizations can use this information to create predictive models, run ad hoc analysis or recognize industry trends.
Despite its name, big data analytics aren’t just for big companies. In fact, improvements in technology, like big data as a service, mean there are options for all companies regardless if they’re massive corporations or fledgling startups.
The Advantages of Big Data for Smaller Companies
While big data services might be available to all companies, that doesn’t mean it has to remain a level playing field. There are definitely ways small startups and entrepreneurs can use data to gain a significant advantage.
Entrepreneurs and Flexibility
One of the greatest advantages entrepreneurs and small businesses have over larger companies is their flexibility. They’re able to try new things and adopt new ideas faster than big companies that operate with established cultures and lots of red tape. This may be why big data has had such a slow implementation rate among major companies. Despite the reported benefits, and companies already collecting lots of information, fewer than 30 percent have adopted big data strategies to improve operations.
This is a weakness entrepreneurs need to exploit. With how quickly technology moves, the first to adopt these kinds of policies will be much further ahead of those who don’t. While larger companies struggle to decide whether or not to adopt data as a focus, and how to do it, small companies can make quick decisions and be well on their way to finding hidden insights.
Big Data isn’t Just for External Use
Many people who argue for the benefits of big data love to point out all the external benefits of big data, like finding trends or creating models. Far too little time is spent discussing how it can help internal processes.
The initial stages of a startup are the most volatile and risky. Early decisions can make or break the eventual success of a company. For every Facebook and Apple, there are thousands of tech companies that fell through the cracks and never to make it. Data analytics can help entrepreneurs learn the most essential first steps that will increase the chances of success. Whether that be how to be cost effective, how much debt to take on, or even the best places to go looking for investors.
Challenges Facing Entrepreneurs
Unfortunately, there are some drawbacks as well. Big data can offer tremendous benefits to entrepreneurs, but they’ll need to be mindful of their weaknesses, and how that could impact data integration.
Unavailability of Talent
As mentioned earlier, big data platforms and analytical tools are in the reach of almost any budget. However, it isn’t just the tools that are important, but the people using them. Unfortunately, there isn’t an infinite supply of data talent available. In fact, there’s a shortage. When there’s high demand, there’s also high prices. Hiring the right talent to maximize the potential of data programs will be very difficult for smaller companies because of how costly these professionals can be. This means startups will be left with inexperienced data analysts, if they’re lucky to have any at all. This will put them at a disadvantage compared to other organizations that have the resources to hire the very best.
Dealing with Inexperience
Right on the coattails of not having the right talent is the overall inexperience of dealing with data elements. Without experienced professionals to explain processes and the right tools to use, companies will need to figure it out on their own. That means at first, implementation and usage of big data will be a slow process. There won’t be an initial return, which may frustrate many entrepreneurs desperate for quick results. It’ll take time and energy, which many would rather devote to other functions they view as being more central and profitable to their business.
