Focus on improvements
It’s a bit pity to see so-called “next business unicorns” widely sharing their success stories on how they are changing the world but one thing they keep forgetting is that the core idea of having business is to make money and focus on operational excellence to make even more money. I know and I completely understand that stories sell, but how do you explain to your investors that a 4 year-old company (I don’t dare to call it a ‘startup’ anymore) hasn’t even reached the breakeven point and is still dreaming of future customer life time calculations? Do you tell them that the financial success is just “around the corner” and they just have to scale a little more?
Instead of “talking big” I’d rather prefer to focus on operational excellence and bootstrapping to actually do stuff, make business happen and make money. But hey – I am not the one who can change your business. I am just the one who can share my experience and a good piece of advice for free: forget the big talk and the Big Data. Focus on Smart Data instead.
Smart Data = secure, qualitative and economical
You might, by now, have heard of Smart Data. Smart Data is Big Data’s “cousin” with better genetics compared to its counterpart: it does not invade clients' privacy, focuses on quality (disregards and filters noise) and, overall, is a lot more economical. Big data is bulky and lacks the precision as it involves a lot of noise, and this is where Smart data comes in with data aggregation.
Using information from Social media, on which Big Data supporters rely, can bring questionable consequences due to potential personal data leakage. With Smart Data approach a number of data points are “made” on site and are therefore directly valuable.
Having lots of data is not enough, data needs to be rigorously analyzed and assessed for its regularity and uniformity. Once the quantity of information increases, big data tends to get more difficult to manage. But Smart Data becomes more intelligent as it disseminates unnecessary information and focuses on value-adding data. The purpose of smart data is to get rid of unnecessary information, or so-called "noise". The rule is simple - if it's not value-adding, it's not needed.
Smart data is more economical due to the need of smaller amount of data. I believe every company is interested in minimizing the costs and when your data sources can affect budgeting positive it's yet another advantage. In addition to the above mentioned, models with moderate numbers of variables result in higher stability, plus it is much less of a burden for the customer to provide significantly less information and that turns into a higher conversion rate. Overall, from my experience, focus on Smart Data can result in significant cost-cutting & can add an actually measurable amount of value added to the overall service pace & budgeting aspect.
Being Chief Operating Officer in the company (and previously – a Chief Risk Officer) I am used to analysis and all I rely on is measures – i.e. data that can be measured and analyzed and can be used to optimize our operations. To focus on operational excellence we had a long obstacle course to go thorough, which we did, and it resulted in a default rate nearly twice lower the industry average. We figured out the tricks. But where‘s the magic you ask? Focus on data instead of headlines. Focus on accuracy and making money instead of talking big names, calling yourself unicorns and talking on how big your big data is.