6 Use Cases of Business Intelligence for every Startup
As startups are increasingly shifting focus to profitability, it’s more important than ever that startups are efficient with their talent and resources. For many startups, it’s typical to get business performance reports (typically in the form of a month-end close) on the 15th of the following month, meaning decision-makers are waiting up to 45 days to get visibility into basic events that occur in their business. High performing founders are no longer content with a 45-day lag to get eyes on a static business performance report. Instead, they rely on real-time insights to make data-driven decisions quickly and efficiently.
Here are six use cases of Business Intelligence that every startup can leverage to become more efficient:
1. Financial Planning and Analysis (FP&A)
Instead of waiting until the 15th of the month to receive a static close report. Startups can leverage BI tools to have real-time insights into financial performance, cash forecasts, and runway. Founders and executives should have a pulse on cash, working capital, and runway at all times. By the time your accountants tell you at the end of the month, your options have already been significantly limited.
2. Understanding of Customer Behavior
For startups, the name of the game is product-market fit. If you can build a group of loyal users faster than they erode, you’ll thrive - but you have to understand customer behavior before they vanish or else it’s too late (Alistair Croll and Benjamin Yoskovitz’s “Lean Analytics”) . Business intelligence helps transform your team’s decision-making from reactive to proactive.
3. Identifying trends in Sales and Marketing Data
Many startups have struggle to understand how their sales and marketing dollars generate high-performing customers. Successful startups are aggressive with sales and marketing because they can back up their strategy with strong analytical metrics such as conversion rates, customer acquisition cost, and lifetime value. If you can’t determine how many leads are needed to hit your revenue targets, you need an analytical solution.
4. Optimizing operational processes
With self-service BI, stakeholders at all levels have access to the same source of truth at their fingertips. Instead of a managers spending 10 hours every month pulling reports for their supervisor, the manager and supervisor can have access to the same report in real-time throughout the month, allowing teams to diagnose and address problems quickly. Even accounting teams that take 10-15+ days to close the books every month can benefit from better data solutions. Instead of hiring another staff accountant because you have too many systems to reconcile, implement strong data practices so your accountants can spend more time analyzing data and less time collecting data.
5. Removing Data Silos & Creating a Single Source of Truth
If you’ve ever dealt with the struggle of manually reconciling mismatched data sources together, then you’re familiar with the concept (or at least the pain points) of data silos. Data silos are created as each business unit collects data for its own purposes and are incredibly common with fast-paced startups as growing organizations are continuously adding new teams and software. You can eliminate your never-ending reconciliation between your disparate data sources by centralizing data in a well-thought-out data warehouse.
6. Alignment to Metrics that Matter
The most successful startups have alignment between stakeholders at all levels. From investors to executives to managers, a self-service BI solution can ensure transparency and alignment within an organization by simply putting the most important metrics in front of people, embedding them into the teams culture and ensuring everyone is pulling in the same direction.
For example, in our blog series “So What?”, we explain why LTV:CAC is one of the most crucial KPI’s for startups to track as it’s a great indicator of product-market fit. And as famously said by Marty Cagan, "The reality of startup life is that you're in a race to achieve product/market fit before you run out of money. Nothing else much matters until you can come up with a strong product that meets the needs of an initial market, so most of the focus of the young company is necessarily on the product."
Aligning each team to the part they play in LTV:CAC is a strong recipe for a successful startup.
How to Get Started
High performing founders and executives don’t need convincing that business intelligence and data analytics add value to their startup. What most founders need is a low-friction way to get started.
SeedMetrics is a fully managed business intelligence solution that’s designed to bring insights directly to decision-makers through plug-and-play software integrations and pre-built reporting tools that are fully customizable to your needs. Companies like LV Lumber have already seen a 40% increase in customer retention and 30% increase in AOV in the matter of weeks. Try our free demo today to see the immediate impact SeedMetrics can have on your startup.
Also read: What is Business Intelligence: A Guide for Startups
