Why Data Before Ideas Should be the Mantra of all Entrepreneurs
‘I’ve had this idea…’ It’s apparently ideas that drive entrepreneurs. Spotting a gap in the market, formulating an amazing product or service that will answer it. Why hasn’t anyone thought of it before? Good ideas are everything when it comes to starting a business… That is, until you find yourself blindsided by an idea that doesn’t take you anywhere because it has no data to back it up. Because while ideas are the entrepreneur’s bread and butter, it’s data that powers their production. At least, that’s been my experience.
Why data is key to successful business formation and growth
Data is necessary throughout all areas of business creation and growth. It shows us where the potential lies, provides insight into where we can look to optimise successful outcomes, and provides us with the backbone necessary to make transformative decisions. But to begin with, its role is to show us how things really are, not just what we expect them to be. And that’s integral to creating a product that is capable of finding a market. Why? Because data doesn’t lie.
No bias, no expectation
The thing about data is that it’s truthful. It can, of course, be manipulated and skewed. But when you’re working with pure data, the numbers lead the way. It shows us what’s really there, removing bias and expectation from every decision. And this can be transformative for a business, opening up no end of unexpected avenues. Our insurance product, Rideshur, is an unintended consequence of the data-driven machine-learning we were conducting for our core business.
Machine learning demands data. Without it, you reach a dead end. And there is more data at your fingertips than you realise; a great starting point is academic papers for specific industries, the sources of data included within can be a potential goldmine. Having an interest in the autonomous vehicle sector, we turned to transportation as our data source. Partly because the previously failed attempt by others to launch data-driven vehicle insurance had amassed vast quantities of unrefined data. And partly because deciphering it would require extremely sophisticated technology – which presented us with a challenge. If we could create software capable of extrapolating that data into useful packets suitable for the insurance market, we’d have our tech product. As it turns out, it also delivered a valuable insurance product ready to take to market. It’s not what we were planning, but it’s what the data showed as being needed – and therefore being possible as a business proposition.
Building a business around data provides startups with a solid foundation. It provides you with the muscle to answer every investor query and every industry objection. Because businesses need facts to thrive. Data not only shows the gaps in the market, but the direction the market is heading, the needs of potential customers and their purchasing and/or behavioural patterns. And it opens up accidental avenues of exploration. From there, you can build your ideas and use your creativity. But if you want to succeed in business, data is where you need to start.