Sun Tzu and the Art of Running a Data-Driven Business.

“If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

― Sun Tzu, The Art of War

Look at any activity you are doing in your company right now. Measure that activity. Can you predict with a high degree of accuracy how that activity contributes to how profitable your business will be?

You can be a Fortune 50 company or fortunate startup. You need to understand your market, customers, competition and create your product accordingly. And you have to do it faster than the others. To do that, you have to constantly collect data and learn from it. You’re looking for a diamond in the rough, which could make all the difference.

Usually, companies look in the wrong place for that data diamond. For instance, you just received financials from your accountant. That is good enough for the tax man. However, the report is at best 3 month past your year-end. Any decision you make now, based on these numbers will take 6 months to implement -- and now you are 9 months into your current fiscal year. This isn’t so useful. Move from reactive to proactive (He who excels at resolving difficulties does so before they arise, as Sun Tzu noted).

I’ll give you an example from my own experience. Let’s say you ran an online marketing business. Today, you received a cheque for $100,000 from one of the suppliers. But can you identify which activity (and when) led to this amount? Last week, last month or 5 months ago? And how long ago could you have reacted by increasing marketing spend, so the customer bought more -- and the payment was not $100,000 -- but $150,000?

In this case, we mapped the journey of a customer visiting a website all the way to the company receiving the final payment. The time span was between 3 to 9 months. We identified critical data points/time points and were able to model the whole business flow -- and know that spending X amount of dollars would result in Y dollars on a particular day.