The 3 Key Pillars of Startup Data Distribution
This post is an excerpt from The Ultimate Guide to Startup Data Distribution, a book published by Visible focused on helping companies professionalize the way they distribute key information to the most important stakeholders. You can download The Ultimate Guide to Startup Data Distribution here for free.
Data Distribution & Why It’s important
Every company has a unique story to tell and the success of your business comes down, in a lot of ways, to how effectively you tell that story to all of your key stakeholders each and every day. “Data Distribution” describes the systems and processes a company has for gathering key metrics around the business and getting them to the right people at the right time in order to support the company’s continued growth.
In short, the way that your company builds your specific data distribution philosophy centers around how you want to tell your company’s story and who you want to tell that story to.
The way that you track the key metrics around your business and the way you get them into the hands of the right people in the right format work in lock step to form your data distribution system. However, simply tracking the right metrics is not enough. In order to effectively tell your company’s story, the data needs to be in one place, in a digestible format and accessible with minimal friction. Regular updates, or better yet a real-time dashboard, where stakeholders can quickly understand how things are going, are key in establishing trust, building accountability and keeping everyone rowing in the same direction.
In an interview with Fortune reporter Dan Primack, Andreessen Horowitz’s Marc Andreessen talked about the discipline that comes with taking the relationship with your stakeholders seriously.
This mentality lies at the core of any successful data distribution strategy and is echoed by many other top investors and operators. Because of the trajectory of so many early stage businesses in today’s market – faster product, news and funding cycles for example – it is more important than ever to keep lines of stakeholder communication open. Remaining disciplined around data distribution and stakeholder engagement means keeping things simple, consistent and in the same format from period to period.
3 Key Pillars of Startup Data Distribution
The bar for early stage technology products is constantly increasing, making simplicity and elegance table stakes in the product development process. The same should be true for data distribution processes in early stage companies. Competition for customers, employees and follow on funding makes it more important than ever to build a simple stakeholder interface into your business.
Management teams at young companies often fail to realize the negative impact that stems from not having a stakeholder engagement strategy. Investors and advisors have built strong networks and can be a great source of inexpensive customer leads, key partners, and talented team members if you make it as frictionless as possible for them to do so.
Everybody knows investors need a simple story to understand what you are working to accomplish in your business.
Investors like to focus on the companies where they can have the biggest positive impact and the ability to make an impact starts with being armed with actionable data. Investors that know what data they can expect and when they can expect it are far more likely to stay engaged and deliver on the network connections that can help accelerate your company.
In “Hooked”, author Nir Eyal talks extensively about using triggers in product design and working to align internal triggers with external triggers to form effective association. The best way to align these two types of triggers for the purpose of investor reporting is through consistency. When a new month or quarter starts, investors begin to expect the results from the previous period for their companies (internal trigger). Working to match your monthly or quarterly update with this expectation helps keep your company top of mind for your investors each period.
Format is an extension of the previous two points and again drives home the importance of setting expectations among your stakeholders and meeting those expectations on a period by period basis. Sending an Excel spreadsheet one month, a Powerpoint deck the next, then an email with a PDF attachment leads to disjointed communication and too much mental overhead for investors to effectively manage, especially when you take into account that another dozen companies that they work with may be doing something similar.
Keeping information in a central repository and in a structured, well-understood format helps you stand out and removes barriers that may prevent an investor or advisor from going the extra mile for your company.
Illustration by Visible.VC
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