Without data , you’re just another person with an opinion — W. Edward Deming
I’ve been thinking about what differentiates the “Be”s and “Wannabe”s in the tech community (Be’s are successful startups, and Wannabe’s are the potential challengers). There are many reasons, timing, product/market fit, culture — and a countless list that I won’t even attempt to create. But as a new bright-eyed and bushy-tailed startup, where do you even begin to emulate some best practices?
And this is where it falls apart for most people. They fail to see or understand what is under the hood of the car — Data, and how it enables the right process in developing successful strategies. Often times, they see high growth companies like Shopify and their brilliant Facebook campaigns or Intercom and their enticing content and say: “We’ve got to be on Facebook!”, or “We need to hire content marketers ASAP!”. It’s these set of narratives that often lead towards a dangerous path of thinking “If it worked for them, it will work for us”. The result? Expensive experiments and expensive costs to culture.
So you may ask, how does data play a role in all of this, especially on the cultural side?
Here’s the jist: every single decision requires a heuristic that falls somewhere in the spectrum data-driven — vs — opinion-driven. Unfortunately, most companies do not equip decision influencers (which should be everyone by the way), with data — so how else are decisions made? With opinions. Actually, most companies do not even have the right data infrastructure set up to enable all this, even if they wanted to.
What are the consequences of opinion-driven decisions? You lose the ability to have brutally honest intellectual conversations and end up with HiPPO (highest paid person’s opinion) decisions. You begin to cultivate a culture of team members leaning on the HiPPO to make the judgement call, losing your competitive advantage of speed. Over time, team members will experience loss of motivation due to the removal of their autonomy (See Daniel Pink’s Drive), and morale from their idea being shut down if it does not align with the HiPPO’s opinion — resulting in the costliest expense for your company.
And what about those Facebook ads or content pieces you’ve been publishing this whole time? Maybe it will succeed through dumb luck. Who knows? But one thing is for sure — when market dynamics change (which is very often) you will not be equipped to navigate this new environment other than relying on plain, old, luck. How long can your luck last for?
I’d love to learn about your personal experiences on this topic.
Stay tuned for future pieces on: 1) Becoming a data enabled company and 2) data-driven decision making.
Don’t want to wait? Check out Winning with Data by Tom Tunguz, which largely inspired this piece.
