You wash up on a desert island in a lifeboat. All you have are the clothes on your back, the materials in the life raft, and whatever you can find in your new haven. You can prioritize different essentials. There’s shelter, food, water, and maybe even rescue to focus on. And each of them will require your effort and resources, but the priority of one may be replaced by another when the situation changes.
You may be prioritizing drinking water only to be hit by a raging storm on your first night and be forced to cobble together some rushed shelter. Or, you could spend time trying to figure out what edible plants exist on the island, when all of a sudden you see a ship sailing across the horizon with no way to signal your existence to them. Meaning you’ll be stuck longer than you could have, had you focused on rescue.
No matter your focus, when presented with new information, you’ll have to evaluate if a shift needs to occur. Life is about choices, and data only tells part of the story. What matters with data is what you do with it. And as an operator of a subscription business, these are the choices that you have to make every day. Granted, you’re probably not making choices with the life or death stakes of being stranded on a desert island, but I’m sure at times it can definitely feel like it.
Someone who I’d be privileged to be stranded on a desert island with is Derek Steer, CEO of Mode. Derek is on a mission to shorten the time it takes to make decisions, which is ideal when faced with survival. But it’s not just about using data the right way. Derek even suggests that data might not be all that it’s cracked up to be. What does he have to say about that? Find out...
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Here we summarize the main takeaways for you to implement or hand off to your team for implementation.
What is data?
Data are facts and statistics gathered for reference or analysis. And as per the dictionary: “Data are units of information, often numeric, that are collected through observation. In a more technical sense, data are a set of values of qualitative or quantitative variables about one or more persons or objects.” Additionally, “data are things known or assumed as facts, making the basis of reasoning or calculation.”
Why is it important?
We are living in a data-driven world. And good data is crucial to making informed decisions. It allows you to plan and strategize properly, so that you may attain your goals in the most efficient and accurate way possible to keep growing. Data allows you to measure quality and effectiveness, taking the guesswork out, to help you improve your product and customer relationships. And in business, this is paramount.
It’s worth mentioning that, you can have all the data you need and want, but if you don’t understand it, it’s as good as not having it at all. Be sure you have the right people in place to help you thoroughly understand what your data is revealing, so you can use it properly.
What to do today:
Follow Derek Steer.
Schedule a time to meet with your data and analytics team or whomever manages your data and analytics to assess your current data process.
What to do next quarter:
After discussing with your team how your company is currently working with data, you can start to build or improve your data infrastructure. And depending on the stage of your business, this could mean implementing data-tracking tools, gathering more detailed data, building a team to manage your data, etc. No matter what phase your business is in, data is key. And by using data effectively you’ll achieve faster growth.
It’s important to understand what phase you are in your business in order to implement the right team, tools, and processes to more effectively use your data. So we gathered some intel straight from data expert, Derek Steer, to help you gather, track, and use data correctly, according to the phase of your business—beginning with phase 0. You can read The Evolution of a Data-Driven Startup for the complete and detailed guide.
Here’s a preview:
Before you launch your product, the majority of your data is qualitative. As you talk to potential users, you’ll (hopefully) start to see the feedback center around specific topics.
These qualitative data points—the problems for which you are creating a painkiller—are likely the inputs that will inform your initial data strategy.
Use early, qualitative customer insights to inform your quantitative data strategy.
Track events as if your key metrics will change. That means tracking everything with as much granularity as possible.
After your product launches, your first challenge is to figure out what’s happening. Questions in this phase often sound like: How many people signed up today? Where’d they come from? Are people coming back? How often?
As you take stock of what’s happening, leverage ad-hoc analysis of raw data to develop core metrics that fit your business.
Establish a culture of data literacy by talking transparently about metrics with the whole team early and often.
So, once you’ve nailed the “whats,”—you will start hearing more “whys:” Why do customers who invite friends stick around longer? Why do customers interact with feature X but not feature Y? Why did growth suddenly evaporate last Wednesday?
When your data questions increasingly start with “why” it’s likely time to hire an analytics team.
Make your analytics team as effective as possible by automating answers to “what” and “how” questions—and give everyone in your company access to the information.
Often, this phase sneaks up quietly. The nuanced difference between the “why” stage and this one is proactive discovery.
To move into stage three, you’ll need to make sure a few things are in place:
Routine reporting that does not require human intervention.
When reporting problems do arise, the technical and organizational infrastructure is in place to respond quickly.
Because your infrastructure is solid, reporting problems are rare in the first place.
Enabling everyone throughout your company to use data effectively can free up analysts to work proactively on high-value projects.
Once you’ve solidified your data infrastructure, it’s time to implement it. And as with anything else, always evaluate the output of your efforts to continue improving and growing.
Who should own this?
Anyone working with and/or managing data. The more you enable your team members to use data, the faster you’ll grow.
Who's up next week?
Next week, Meghan Keaney Anderson discusses all things marketing and content.
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This is a ProfitWell Recur production—the first media network dedicated entirely to the SaaS and subscription space.
By Patrick Campbell
Founder & CEO of ProfitWell, the software for helping subscription companies with their monetization and retention strategies, as well as providing free turnkey subscription financial metrics for over 20,000 companies. Prior to ProfitWell Patrick led Strategic Initiatives for Boston-based Gemvara and was an Economist at Google and the US Intelligence community.