4 out of 5 businesses have no data & analytic support in their first 5 years
Coincidence, Correlation, Causality — there is no one to ask!
We all know that 4 out of 5 businesses fail in their first 5 years. Your odds are worse if you are starting a restaurant. But they really aren’t much better for anyone else. Building a new business is hard!
There is plenty of popularized theories and even a little data on what the causes of failure are. Unfortunately, the very thing that could actually cast some light and a solid plan on this problem is missing — data & analytics. Most companies under 5 years old, don’t invest in data & analytics. I talk a lot about why — and why that is wrong.
Even companies that do build an analytic function early are most often selling that service. It is outward facing, there is little time, resource, or attention put on inward issues. I have my own company in this space, under five years old, and even I struggle making time to analyze us.
Common wisdom is full of ideas on why businesses fail. They even try to put numbers to it. There are two clear realities:
- First, if any business truly understood why they failed, they would have fixed it.
- Next, an overwhelming number of these supposed causes speak to a need for more learning, information, planning, and decision-making. In other words, data & analytics!
Why do businesses fail — they didn’t know enough! They weren’t able to learn what they needed to know fast enough! They believed data & analytics was a tool for bigger and more mature businesses.
In the past, I often find myself putting a positive spin on most company’s data & analytic issues. Truth is — almost all are easy to solve, if you know what you are doing. But the unfortunate reality is — too many companies would rather wait than invest in science and discipline they themselves don’t understand. Often it is too late before they act. They either never do, or they do so only in a final act of desperation. The odds are against you.
An important note, I take issue with the use of “small” in so much of the “common wisdom”. I have been embedded in the corporate world for over two decades. The truth is 4 out of 5 departments fail (or at least 3 — my data is anecdotal). The difference is portfolio management — large businesses are diversified. As long as 1 or 2 departments “kill it”, the company will live to hire new management for the rest…
Finally — as much as I preach, evangelize, and profess — the popular refrain of “I just can’t afford that right now.” will not die. I am sorry — you are wrong! You are wrong about that and probably a half-dozen other things. Odds are — a few of those will combine to destroy your company in the very near future! I hope I am wrong… but the odds are in my favor, not yours.
Get help today — in weeks not months, for hundreds not hundreds of thousands, by investing in you & your people — not other people’s sales goals or technology.
