Data as a business philosophy
If Facebook has taught us nothing else, the social network makes it clear that there are huge profits to be made from making sense of our users data.
If there is one thing that startups can learn from the rise of Facebook it's that making sense of data you collect is where the money is.
Lots of companies collect data and do nothing meaningful with it. But thanks to new tools and the realization that knowing more about what your users are doing is the way to monetize, there are plenty of opportunities to take advantage the information collected.
In case you've been living in a cave, Facebook hasat an enormous valuation, based largely on the fact that the company has consistently attracted more users and encouraged people to give them all of their relevant personal data. This data is in turn analyzed and turned into advertisements that are ostensibly more relevant thanks to all of the personalized information that is collected and sorted through.
And while this seems an obvious thing to do--take your users' data, make sense of it, and monetize it--it's much harder than it seems and requires a lot more forethought than most startups have when they initially construct their products.
To generalize a bit, by analyzing a combination of real-time customer engagement streams and data already available in CRM, billing, and support systems, you can start to figure out which sales and marketing actions yield the best results at the lowest cost.
I discussed some of these ideas with Dominique Levin, CMO at Totango, who referred me to a blog post by venture capitalist Evangelos Simoudis that discusses Insight-as-a-Service (and no, we don't need another -aaS but bear with me), which refers to "action-oriented, analytic-driven solutions that operate on data generated by SaaS applications, proprietary corporate data, as well as syndicated and open source data and are delivered over the cloud."
Insight-as-a-Service holds a great deal of appeal for companies that don't have the teams or skillsets to analyze their own data but also introduces a new market opportunity for startups--both as providers of data services as well as consumers of data service offerings.
Data-driven startups should become easier to build as hosted services that process data and find insights for users become more readily available. And, the notion of having insight-as-a-service is applicable to businesses of every size and shape. Now is the time to consider data first when you build your applications.