Comments Off on Why early-stage investors should be pumping up their startups with data

Why early-stage investors should be pumping up their startups with data

Posted by | 2 June, 2012 | Startups

Original post by Jeb Stone via VB

“Startups are the sum of the decisions made by the people who run them,” Future Simple founder Uzi Shmilovici wrote in a recent post.

Uzi’s absolutely right — the earlier startups begin collecting data, the better their decisions will be. There’s only one catch: Most startups don’t have expertise in analytics. The time startups spend on developing clear success metrics, actionable campaign tracking, and automated reporting is time they DON’T spend developing a minimum viable product and pivoting to find their market — effectively leaving startups with limited or no real ability to compete on analytics.

The Big Idea
What if VCs provided centralized analytics and data management resources as part of their investment in startups? Giving startups the tools and resources they need to compete on analytics would give investment firms and their startups a huge competitive advantage. Startups would grow revenue faster, reducing their level of technology debt, and giving them access to specialized skillsets typically available only to better-funded players. Investors would see a significantly enhanced probability of return.

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