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Business Intelligence for Startups

2023-07-21 // Nick End, Founder

BI for startups

The following post is an overview of business intelligence strategy for startups as they progress from pre-seed to Series B companies. Beyond Series B, Startups start to look more like big enterprises and business intelligence for those companies deserves its own post.

Introduction

In the early days of a startup, business intelligence (BI) and data analysis are not top of mind (unless you are building a better BI tool). You spend time talking to customers, building products, and shipping whatever it is that makes money or brings you closer to the elusive minimum viable product (or minimum lovable product, if you're going with the latest nomenclature).

As a business starts to form, startups begin tracking data using the cheapest and easiest products available, generally, spreadsheets. Startups eventually outgrow spreadsheets either due to data set size constraints or the desire for a dashboard and move to an enterprise grade BI tool. While enterprise BI tools sound nice, they have their share of drawbacks, including price, which is not covered here. In the paragraphs below, we discuss the nature of analytics at the pre-seed, seed, series A, and series B startup stages, Each section will identify common data sources, and suggest the appropriate tools for each stage

Pre-seed and seed stage startup data analytics

Analytics in a Pre-Seed and Seed Stage Startup In the beginning phase of a startup, it is rare for a company to have metrics to track. The focus is on user research to identify a problem to solve, market research to quantify the market opportunity, and technical research to prove or disprove the ability to build the product the founders envision.

How are pre-seed and seed stage analytics performed?

In many cases, companies are tracking sales, usage, and feedback, which are often small data sets. For highly interactive software products, you may be looking at logs, or user interactions with certain features of the product. Early processes are crude and often start and end in manual upload or data entry into a spreadsheet. In some cases, like pure software or highly complex hardware, you may use analytics services, like MixPanel or a metrics database, to gather data and analyze it. For most companies this level of fidelity makes sense. You are looking for big signals your product is delivering customer value. Metrics, like sales, time in the product, cost savings, or other high level figures are most important. Tracking copious amounts of high fidelity metrics is valuable if they are intimately tied to larger needle moving figures but can be a time sink if not needed.The strategy for pre-seed and seed stage startups is to keep things simple and track high level, needle moving, metrics. There are startups that necessitate detail metric tracking early on but they are the exception to the rule.

The best BI tool for pre-seed and seed stage startups

The spreadsheet wins for early stage startups. Excel and Google sheets are adequate solutions but in recent years, modern spreadsheets have popped up that offer better performance, connectivity to cloud data sources, and sharing capabilities. Row Zero is one such tool that is a blazingly fast spreadsheet that connects to cloud data sources and is easily shareable across a team.

Pre-seed and seed stage data sources

  • Data capture: Manual, logs, business systems
  • CRM: spreadsheets, pipedrive
  • Website traffic: Google Analytics
  • Bank Account: Mercury, Brex
  • Rudimentary data warehouse: Postgres, MySQL
  • Event analytics software: Mix Panel, Kiss Metrics, Hotjar

BI Tools for pre-seed and seed stage startups

  • RowZero - 100x more powerful than Excel and Sheets, shareable, and free
  • MS Excel - Ubiquitous familiar tool everyone knows, bundled with MS Office
  • Google Sheets - Part of the GSuite, easy to share, and the least powerful of the options.

Series A startup data analytics

How are analytics changing in a series A startup? When a company matures to a series A round of funding or reaches that stage on its own, its data analytics activities and BI tools are due for an upgrade. A Series A company should have some semblance of meaningful data as the business begins to take shape. The company is often making its first finance hire and formalizing ownership of reporting responsibilities and systems. A lightweight electronic resource planning (ERP) system may be implemented to track all operational data in one place. If not already created, a data warehouse is established to store product and business data.

How are series A data analytics performed?

Spreadsheets are still regularly used to track, analyze, and summarize data aggregated from disparate data sources. They are also used for various ad-hoc analysis throughout the company. In most cases, the complexity and data set size of data sets is small enough to fit in traditional spreadsheets. In the cases where traditional spreadsheets are no longer sufficient, startups will turn to enterprise grade BI tools, like Tableau and PowerBI. This is also the stage when many startups build dashboards to track their business performance across key departments, like sales, operations, finance, and manufacturing, further driving the desire to on-board with an expensive BI tool.

The best BI tool for a series A startup

The challenge with enterprise tools at the Series A stage is that companies are still evolving, learning, and developing. It is not always clear what metrics are meaningful or how to easily automate tracking. BI tools have relatively rigid analytical limitations that essentially amount to pivot table style analysis and dashboards. It is often the case that one person at the company knows how to use a BI tool and after they set it up users ask to export to a spreadsheet for all ad-hoc and supporting analysis. BI tools are simply too rigid and unfamiliar for a series A startup.

Instead of struggling with traditional spreadsheets or complex BI Tools, a series A startup is the opportune environment to build analytics tools with a powerful, connected, and shareable spreadsheet. Row Zero is one such product, which can connect to data warehouses and data lakes, import 100 million row files with ease, and be shared across a company to easily build dashboards and perform ad-hoc analysis without the burdensome setup of a traditional BI tool.

Common Series A Data Sources

  • Operations/Manufacturing: ERPs (Netsuite, Fishbowl, Sage)
  • CRM: Salesforce, Pipedrive
  • Website traffic: Google Analytics, SEMRush, AHRefs
  • Bank Account: Mercury, Brex
  • Data warehouse: Redshift, Postgres, MySQL, S3
  • Product/Event analytics: Logs, Mix Panel, Kiss Metrics, Hotjar
  • Marketing: Hubspot, MailChimp, Zoho CRM
  • Human Resource Information Systems (HRIS): Justworks, Rippling,

BI Tools for series A startups

  • RowZero - Pivot tables, charts, ad-hoc analysis, and dashboards
  • Tableau - Pivot tables, charts, and dashboards
  • PowerBI - Pivot tables, charts, and dashboards
  • Metabase - Dashboards

Series B startup data analytics

How are analytics changing in a series B startup? Upon reaching Series B status, a startup will put formal applications, departments, and business processes in place for all functional groups and activities. This may even include a BI or analytics hire. Metric tracking requests will pervade all functional groups within the company. Dashboards are requested to track progress towards goals and pretty soon everything is being measured or attempting to be measured.

One challenge at the series B stage is the transition to dashboards combined with the unpredictability of a startup means ad-hoc analyses are extremely common. The average dashboard will often produce confusing results that need to be investigated.

How are series B data analytics performed?

At a series B startup, BI tools are common. Purchase of a BI tool is seen as a way to help measure, focus, and grow the company. Often self-serve analytics is discussed as a way to enable everyone in the company to use data to make decisions and BI Tools, like Tableau and PowerBI, are seen as enablers. As soon as ad-hoc analysis or department level analysis is needed, analysis will jump back into a spreadsheet.

The best BI tool for a series B startup

Enterprise BI solutions, like PowerBI and Tableau, claim to enable self-serve analytics but few people outside of BI Teams know how to set up and use them. The self-serve promise rarely materializes. The joke among data engineers is as soon as they finish building a dashboard, they will be asked “how can I download this to a spreadsheet?” Nevertheless, dashboards are great for tracking routine high level metrics.

When it comes to performing ad-hoc analysis spreadsheets are still the most popular option. The challenge with series B startups and beyond is data sets sizes can begin to outgrow the capability of popular spreadsheets, like MS Excel and Google Sheets. Row Zero is an option the can support millions of rows, connect to data sources, and be shared across teams to create dashboards and ad-hoc analyses.

Common Series B Data Sources

  • Operations/Manufacturing ERP: Netsuite, SAP
  • CRM: Salesforce, pipedrive
  • Website traffic: Google Analytics, SEMRush
  • Bank Account: Mercury, Brex
  • Data warehouse: Snowflake, Redshift, S3
  • Product/Event analytics: Logs, Mix Panel, Kiss Metrics, Hotjar
  • Marketing: Hubspot, MailChimp, Zoho CRM
  • Human Resource Information Systems (HRIS): Justworks, Rippling, Gusto

BI Tools for Series B startups

  • RowZero - Pivot tables, charts, ad-hoc analysis, and dashboards
  • Tableau - Pivot tables, charts, and dashboards
  • PowerBI - Pivot tables, charts, and dashboards
  • Mode Analytics - Big data analysis, dashboards, in python and SQL
  • Thoughtspot - AI powered big data analysis using natural language prompts

Conclusion

In the beginning, startups rarely have a need for analytics solutions and spreadsheets are a sufficient solution. The advent of connected, shareable, and powerful spreadsheets, like Row Zero offers a more capable choice than legacy solutions. As a company progresses to Series A and series B maturity, there is often a tendency to purchase enterprise grade BI tools, like Tableau and Power BI. While these tools promise a lot they often fall short because of the inherent learning curve and because startups need more flexibility than they afford. Row Zero fills the needs of both early stage and maturing companies. The user interface and features are familiar and the power behind the application enables it to support a company's data set sizes all the way through an IPO.