Data should be used to create accurate assumptions of the near future, not just to show off growth rates
Data is only worth analyzing depending on your intentions. I ask myself all the time what it is I want to do with the results. Is it really to create an assumption to grow my company or am I doing it to "prove a point"?
It is easy to manipulate an analysis of data into a result you desire. I can choose the parameters in a way that the results are showcasing the desired outcome. The sad part is that this even happens unconsciously. We are so focused on "proving" our point that we lose focus on how we use the data we have.
I can have 10 users who gave me feedback and tell the world that I have 90% user satisfaction! Or an 80% increase in users.
Obviously, we can do the same thing when we want to analyze data to improve our products. We can use data in a way that will show us the results we want.
But if we use data to create an assumption of where we are headed, to predict the market, the estimated amount of users etc. the intention of growing our company becomes more important now instead of the need of showing how much the company has grown.
This approach has helped my company to predict what type of users are benefiting our Web-App, and on what device they log in from. We improved our mobile framework and are seeing an increase in users and time spent on the app. However, I am not concluding that it is all thanks to the framework improvement. Because we have also been more focused on marketing that is visible via phone (think of LinkedIn and Instagram) and we have users that are re-directed via these platforms.
The fact that we keep track of these data is helping us to grow and predict the marketing strategy even more.
I think half the challenge is choosing the right metrics. It's very tempting to work from the bottom up, and cherry pick what numbers look good in order to give yourself a win. But the nice thing about forecasting, especially when you work from the top down, is you force yourself to identify the metrics that really move the needle.
Yes, loving the "work from the top down" frame. Would love to know what metrics you've chosen or would choose!
I am basically in the business of making financial models, mainly for investors. What i've found is that in SaaS, if you can maintain strong Net Revenue Retention and short CAC Payback period - it's almost impossible to fail.
Yes, there is power in predictive analytics. It is like a beam of light in total darkness if used right.
Absolutely, the IF here is the pitfall, would love to hear your experience in it!