More data was created in the last two years than the previous 5,000 years of humanity. This year we will exceed that, creating even more data in only one year.
The types of data are expanding rapidly across a wide range of industries: Biotech, energy, IoT, healthcare, automotive, space and deep sea explorations, cybersecurity, social media, telecom, consumer electronics, manufacturing, gaming and entertainment – the list goes on. Cloud platforms and new database technologies mean data has become cheaper to store and easier to access.
No matter what your company does, gaining insights from your data, making predictions, and learning and taking action will play an increasingly important role in helping your business thrive and survive.
Start-ups lead the way for data-driven companies
Start-ups are the most data-savvy companies of all, often disrupting established business models capitalizing on the power of data to create barriers to entry and competitive advantage. These businesses are being engineered from inception to obtain insights from every transaction and from every action performed on their business platforms. Data analytics inform their decisions, from manufacturing and logistics to sales, marketing, and ongoing customer service.
Acorns micro investing company uses data as a competitive advantage
Consider Acorns, the company that launched a consumer app in 2014 which allows people to create an investment portfolio using small change. All that is required to get started is to download the app onto a smartphone and you begin investing from as little as a few cents at a time.
Real time reports including investment performance, analysis of spending patterns, and your Acorns investment history ensure you are always informed and in control. The extent of reporting is an essential part of Acorns’ value proposition, and it’s a key reason why consumers trust Acorns with their banking and credit card details.
It’s all a world away from the quarterly reports and (if you’re lucky) annual suit-and-tie meetings with financial managers that most people associate with investing. Acorns’ simplicity of approach and its smart sharing of data have been spectacularly successful. During its first year of trading, consumers made more than 20 million transactions.
While Wikipedia lists Acorns’ industry as “Investment services”, it’s competitive edge comes from being a data company and the lessons we can learn from their rapid success include:
- Disruption of traditional stock trading business models with self-service data applications for customers to track their investment performance, and
- Delighting customers with spend data analysis and cash-flow forecasts not available from traditional banks
Netflix and Amazon disrupt old ways
While on the subject of disruptors using data to win, you’ve only got to look at the media industry where relatively new combatants like Netflix and Amazon are challenging decades-old subscription premium channels and other producers.
Netflix started as a DVD distribution business but was transformed when it started to aggregate and stream “old” TV series and movies which it sells as a monthly subscription. Best in class recommendations have helped minimize churn by steering the viewer to similar shows where they can indulge themselves, watching whole series at a single sitting if they so wish. It is these viewing habits that provide the “science” that tells Netflix which new TV series will win. So, here again, we have Netflix reinventing the television industry by:
- Smart use of behavioral data to predict what other “similar” customers might want to buy next in order to improve retention and lifetime value, and
- Identification of “hot” product categories where investment is likely to produce the highest returns
These upstart companies represent the new face of business and their successes contain a clear message for every organization and every manager today: If you want to compete, you have to become more data- and consumer- centric. And if you want to win, you need to not only capture data, you also need to analyze, gain insights, spot trends, learn, and act on that data.
In short, you need to become a data company.
Read more about how you can use data in your business, You’d be surprised what you can do with your business data.