Using Data for Business Development and Strategic Decision Making
Growth Africa is an East African accelerator, which aspires to support ambitious, committed and capable entrepreneurs through strategic advice and access to investments. Part of its recent efforts to reach out to entrepreneurs is the introduction of a series of masterclasses designed for ventures that have been in existence for a minimum of two years with existing products or services already in the market. The first masterclass revolved around the use of data for business development and strategic decision making, and took place on July 13th, in Nairobi.
As early-stage startups, we often misunderstand the meaning of data, and what role it serves for our company, hence it was very valuable for my team and I to attend the event and learn from an expert how we could better our data collection and analysis processes. Ashley Speyer, a Senior Associate from Acumen and proponent of the concept of Lean Data led the discussion.
The concept of Lean Data is one that I find very interesting. It is based on the following tenets:
- Customers first: Take a bottom-up approach and ask yourself what data will help you better serve your customers.
- Mobile based: Use technological tools for data collection (eg: Echo Mobile, Qualtrics, Voto, M-survey, Engage spark, and Excel).
- Standard survey tools: Ask standardized questions to your beneficiaries in order to compare results and for ease of analysis.
- Blend of social and business insights: You might not always have a social impact, but still you have to show how you improve the lives of your customers.
So, how to go about data collection and analysis?
Step 1: DESIGN by highlighting strategic priorities, decisions and stakeholders
Step 2: COLLECT through chosen method (print surveys, phone calls, SMS, IVR, online, in-Person, etc.)
Step 3: DATA ENTRY through Excel, Qualtrics, Google docs, etc.
Step 4: ANALYZE data and compare to initial hypothesis that you had at the beginning
Step 5: ACT ON THE DATA for business decisions
Other things you should know:
- Having an in-house research team is always preferred.
- Make an hypothesis before conducting data collection to test how well you understand your customers.
- Do not provide monetary incentive for customers to answer your surveys. This is not sustainable! Furthermore, your real customers will feel happy to provide you with feedback.
When to reach out?
This is a major question especially when the last thing you want is to spam your customers. To figure it out, it is essential to draw your customer journey, pre-purchase and post-purchase. At each stage of the customer journey, you are expected to ask key questions which will inform whether your business is on the right track:
- AWARE: How did they hear about your service?
- RESEARCH: What competitors/alternatives are they comparing your service to?
- CHOOSE: Why did they choose your service? What’s the purchase trigger?
- PURCHASE: Was the purchasing process smooth?
- USE: Any challenges using your service?
- SUPPORT: Did they require any support post-purchase?
- RENEW+REFER: How likely are they to recommend your service to a friend/colleague?
Well, asking all these questions let you know who your unconverted leads are, and why they did not buy from you. It will inform you on ways to remove barriers to purchase, and whether your assumed value proposition is clearly reflected in your marketing materials. You will be able to identify your referrers, which you might want to turn into brand ambassadors.
Cool, we have decided to be customer-focused!
When it comes to providing data to potential investors, you need to address the three areas of the Acumen Impact Framework, which are:
- BREADTH: this is your scale, how many users have you reached.
- DEPTH: how meaningful is your (social) value proposition, any change in end user well being (before vs. after)
- POVERTY FOCUS: income levels of your users (particularly valuable, if you are targeting impact investors or donors).
I am not writing this post to simply tell you about what has been said during the masterclass but instead share with you some thoughts regarding the way we have mystified the acquisition and use of data in our Sub-Saharan African startup scene.
I truly believe that we are confused about the meaning of data to a point where we associate data acquisition to a complicated and sophisticated science. Often, there is an assumption that we need help from Western researchers to jump in and help us create data-centered startups. While I don’t disagree that Western organizations have taken more time and effort to streamline the way we conduct data collection and analysis, I argue that us as African entrepreneurs have taken this excuse to not do the work and simply wait for an outsider to come do it for us.
Acquiring data is far from being an embedded task in many African startups’ day-to-day operations. It is very much postponed and at the back of everyone’s head. One of the reasons that justifies that data collection has not been made a priority in our African startup scene, is that there is a misleading assumption that we need high-end tools and fancy skills to acquire and analyze data from the communities around us.
This is the right time for African entrepreneurs to fully commit to build data-centered enterprises, as we more and more find ourselves reporting to investors and donors from all over the world with regards to the impact we are making in our communities. Let us inspire our teams to value the importance of data, especially because data has to be collected from all levels of the organization, from staff to agents. Furthermore, with the rise of social media activity, we will see increasingly more customers reaching out to brands for compliments and complaints of all sorts. This qualitative feedback is not to be neglected as it says a lot about the way our customers experience our product/service. As companies, we will engage more with our customers, and must use this opportunity to collect essential data about our business and simultaneously build a lasting relationship with our customers.
I am ending this piece with the advice above, hoping it will serve more than one African founder on their entrepreneurial journey.
If you are interested in Growth Africa, you can check out their 6-month accelerator program here: