Data driven decision making: A non-negotiable in startups' journey

In continuation of?our views on?“Areas where Founders and VCs can collaborate beyond investments,"?this week?we?want to share our experience and thoughts on data-driven decision-making.

In the fast-paced world of startups, founders must have a data-driven decision-making process. For this, they need to have the right tools that can provide invaluable insights and streamline operations. Based on our experience, here are some tactical tools that?can be considered?in the following six business areas:

1. Marketing:?Effective marketing strategies require data-driven insights.?This?is a must for continuous testing and?refinement,?and?based on that, identifying winning strategies. Tools like TripleWhale, Measured, Google Analytics, HubSpot, and Klaviyo can help startups analyze user behavior, optimize campaigns, and measure performance. TripleWhale and Measured can help online stores centralize their advertising data and accurately attribute sales to respective marketing channels using a first-party pixel. Google Analytics can offer detailed website traffic insights, while HubSpot, Klaviyo, and Mailchimp can facilitate customer relationship management (CRM) and email marketing, respectively.
2. Operations and Supply Chain Management: Data plays a critical role in efficient operations and supply chain management. This decision can have a significant business impact; hence, founders need to deploy the right tools for data-backed decision-making. Inventory management, order processing, and logistics tracking are?quite?complex and critical processes. Some of the tools, such as Crest.ai and UniCommerce, can provide comprehensive solutions to maintain optimal stock levels, streamline operations, and ensure timely delivery of products. Similarly, for distribution and retail management, tools such as Bizom and Botree can provide actionable insights to help increase sales.
3. Accounting:?Accurate financials are a must for tracking a?startup’s?health. Founders need to have the right accounting tools in place for the accurate recording of transactions, generate correct financial reports and KPIs, and monitor the health parameters of their companies. At an early stage, these tools need to be simple to operate, cost-effective, and sufficient to meet their requirements. TallyPrime and Zoho are widely used accounting tools in India, while Quickbooks has been a go-to option for early-stage companies domiciled outside India, especially in the USA. These platforms simplify expense tracking, invoicing, and financial reporting. They can also integrate with various banking and payment systems, allowing seamless management of financial transactions and real-time visibility into financial health with a lean team. As companies mature and complexity increases,?it’s?important?for businesses to gradually pivot to more sophisticated ERPs such as SAP, Oracle, and Netsuite, as they can handle functionalities beyond plain accounting.
4. Data Engineering:?Data engineering involves collecting and managing data from varied sources in meaningful formats and analyzing them to cull out insights for informed decision-making. For startups, tools like Amazon Redshift, Google BigQuery, and Snowflake are popular choices. These platforms can offer scalable, cost-effective solutions for storing and analyzing large datasets. They can enable founders to perform complex queries, generate reports, and gain actionable insights quickly. For founders without a technical background, no-code platforms such as Hyperquery and Panoply can allow them to manage and analyze large datasets.
5. Human Resources:?Managing human resources?effectively?is?key to?scaling any company. HROne, Keka, and Darwinbox are some of the popular HR tools. These platforms can offer solutions for recruiting, onboarding, payroll processing, and performance management. They help founders automate HR tasks, ensure compliance, be able to evaluate their performance, and foster a positive workplace culture.
6. Customer Delight:?Ensuring customer satisfaction is paramount for startups. Tools like Gorgias, Zendesk, Freshworks, SurveyMonkey, and AskNicely enhance customer support and engagement. These platforms can offer features like live chat, help desk management, and customer feedback analysis. They enable startups to respond promptly to customer inquiries, resolve issues efficiently, and build lasting relationships. These tools can also help in analyzing customer support data to identify?key?issues faced by them and help improve offering and service levels and?thereby?retention.

Utilizing these tactical tools across various business functions can empower startup founders to make informed decisions, optimize operations, and drive growth.