How to overcome the biggest data challenges in startups

Startups can be incredibly exciting and exhilarating to be involved in. It’s a fast-paced and fast-moving world. If you marry that with the rapidly expanding world of data – with it’s constant change, innovation, and ever-growing volumes of information, we get an explosive environment which is developing and evolving at speed. It’s an amazing place to be, however, with it comes a variety of challenges, and unfortunately, many startups often find it difficult to implement effective data strategies and then fail to harness this incredibly valuable asset. Here we explore what some of the key challenges that often present themselves to startups are, and what to do about them.

Financial and budgeting constraints

Most startups have limited funds available to them to use from the outset. This capital must be carefully allocated across various parts of the business to support it’s growth and development. Unfortunately, this often means that data initiatives are sidelined, not prioritise and not given the investment that it needs to make a real impact in the business.

Many startups seem to believe that data strategies, good data governance and data management are something that only larger organisations need to invest in, or have the luxury to invest in. There is a rising trend for roles dedicated to data such as Chief Data Officer (CDO), Chief Analytics Officer, Head of Data, and Head of Data Infrastructure and so on.  Companies are competing to invest more and more in data and the opportunities that it presents in securing a competitive advantage and offering increased business intelligence.  This approach, however, is often seen as reserved purely for established companies with big teams to manage and monitor, but this doesn’t have to be the case.

A cost-effective and relatively simple way to harness and benefit from the skills and impact of a CDO or Data Expert, is to bring one in temporarily, to help build and establish the foundations needed for a data-driven organisation. This can be done via CDO-as-a-Service and is usually delivered by specialists companies such as Register Dynamics Ltd. They are experienced in partnering with startups and in acting as an extension of your startup team to drive and deliver your data agenda, vision, and goals.  It is a good option to consider if you intend to compete with others in the market and to make the most of your organisations insights and data.

Limited data resources

Startups often lack access to individuals with specialised data skills such as data scientists, data analysts or data engineers. Hiring and retaining such talent can be really difficult and time-consuming, especially when competing against larger organisations who can often offer much higher salaries and more attractive benefits packages.

Without the necessary data skills, startups may face challenges around data security and compliance which can lead to data breaches and heavy regulatory fines if they’re not careful. The business’ ability to scale their data infrastructure and operational processes effectively is often restricted and their ability to draw meaningful insights from their data will also be affected.

Therefore, it is often wise to find a reliable source for bringing in those much needed data skills and to plug skills gaps as quickly as possible. If you look more closely at CDO-as-a-service, you will find that it also gives you access to a talent pool of data experts (i.e. data scientists, data architects, data engineers, data security / protection specialists, data analysts etc), who will be available to you to help build your data capability whenever you need it.  This is an incredibly valuable resource that you can activate and manage to suit your specific needs. It can reduce the need to spend your time trying to find and hire specific people for your business as well as being a cost effective and flexible option that can evolve with your business.

Conclusion

Startups face many challenges, with financial and resourcing constraints often at its core. There are a variety of competing priorities all as part of the journey to building and scaling a successful business. Some founders underestimate the importance of having a solid data strategy and data management plan from the beginning, and others simply believe they cannot afford to invest in it right away.

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However, the misconception that a startup has no need to invest in data and data strategies early on, can hinder it’s ability to scale, to make informed data-led and evidence backed decisions, and to innovate effectively.  It is not a sacrifice that has to be made. Data resources and expert skills aren’t something that only large organisations can have but smart, strategic and forward thinking startups can also have this and more.

By working with trusted partners who can support your journey and bring in the data expertise you need, you can reap the benefits of a data-driven business from day one! You can have everything and have it now! So, don’t settle for less or let your challenges overwhelm you. Seek help when you need it and help will come!