(Step 1) Dear Advisor: How do I get Started on a Data Strategy from the Beginning?

October 2022

Also in this series:

You’ve probably heard me say: "you can’t get insight from data you didn’t collect". :) So you may also agree that it’s never too early to get started collecting data about your business and customers. But how do you get started?! And how can you keep it going in small, sustainable chucks? Here’s some advice for busy non-technical and technical founders.

Step 1 (No Code): Start with the End Goal of Go-to-Market (GTM) and/or Product-Market-Fit (PMF) in Mind

e.g. "Why do we Need Data in the First Place?"

I’d argue that, at its core, the main purpose of collecting data about your business and your customers is to: understand where there’s friction, diagnose potential causes, try out different solutions aiming to reduce that friction – all with the end goal of growing your business and becoming more profitable

One way that businesses tend to do this is by starting with key metrics around end goals for the business. These can be investor (if pitching a pre-seed company) or board metrics, and/or the One Metric That Matters

To get there, brainstorm and write/draw out:

Notice that there’s no code – or data – involved yet. One side-effect of this step is that this document or drawings (AKA business architecture diagrams) will also help all of the teams (and employees) get on the same page about terminology and target outcomes your business is looking to impact.

Step 2 (No Code): "How is your Business Doing?"

e.g. Start to Manually Collect Some Data to Establish Metric Benchmark

Now we know what the end goal we’re trying to reach, e.g. trying to summarize the state and health of the business with a key metric from Step 1, here’s how to get to that 1-number summary:

Notice that we won't be using any Engineering resources (!).

Side note with advice on retracing steps in data collection:

This way, you’ll always be able to go back and identify (for example) which Marketing copy on Reddit was the most effective over the last month, for example. 

Step 3: (No Code) Evaluate Metric and/or What’s Missing

Now that you’ve collected some data about (just) your interactions (to start) with your product or business, let’s evaluate how easy/difficult it was to complete Step 2.

Most likely, you weren’t able to; no worries! At least you now know your first pain point in the business: not everything is connected the way you’d expect. And it’s not too late to try to fix this, and to do this in small steps, iteratively (more on how, below). 

If you were able to complete Step 2, congratulations! This very rarely happens on the first try.

Step 4: (No-to-Low Code) Iterate to Improve Metric and Time-to Metric

Whether you were able to complete the previous step – or not, now, think about the next smallest step you can do to improve that process. Whether that’s getting you to:

If you’re not sure what to start on next, go back to the document/map of Step 1, here's more advice in these blog posts on how to uncover what to potentially focus on next: 

And feel free to ask your team, mentors and/or advisors on what they see as the biggest blockers/opportunities. 

Step 5: Optimize for GTM

Once you’re able to complete Steps 1-4 to establish one of your key business metrics, and get data to start flowing using your desired tool of choice, you’ll be able to try to summarize how well your business is doing in the document/diagram you created in Step 1, for each of the flows in diagram. 

Repeat these steps for each flow in your diagrams in Step 1, to start optimizing your business for GTM and PMF; for more advice on how to do this, please see my blog post here.

I’ll caution you that you may find that the road between the steps is non-linear, and sometimes it will seem very time-consuming, and the resulting data may not make sense. That’s all OK!

The earlier you start on this journey, the earlier you’ll find and fix the bugs in the app/product that cause these bugs and friction, the easier it will be to do product experimentation to identify potential pathways to scale the business. Don’t wait until you have 100K+ customers to try this!

If you took a stab at the above, have a full-time backend engineer or technical CTO, and need more support on your product-market-fit journey, please schedule a call to share your progress and where you’re stuck. 

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