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How Much Should Data Affect Your Strategy?

Data should be consulted, but not be the be-all-and-end-all

23Dec

The world has gone data crazy. It doesn't matter what field you are in, or what decision you have to make, data is supposedly the key.

While data brings competitive advantages, it's caused some to question whether we've forgotten how to use our own initiative. In an interview in Fortune, Morgan Hermand-Waiche, CEO, Adore Me, explains that his education had made him into a 'data-driven decision maker', with gut instinct secondary to hard facts.

During his time at Harvard, Hermand-Waiche realized that there was an opportunity in the lingerie market to deliver a cheaper, more personalized service. He didn't, however, have any prior experience in lingerie, so naturally turned to data to find where the opportunities lay. The stats didn't make for good reading. The market was dominated by a single player, barriers to entry were high, and every company that had tried to make headway had failed.

Adore Me generated $16.2 million in sales in 2014. It has been an overnight success, and was included in the Inc. 5000. Evidently, Hermand-Waiche ignored the data and went with his gut instinct. It demonstrates that data, particularly when you have a disruptive product, can be misleading. You can't measure the success of your company by using the same metrics as a multinational, because your end-goal is different. As such, relevant metrics will develop over time, with bigger risks needed to be taken early on in development. This is accentuated if you're entering a new market, which has yet to mature. The metrics for success won't be available yet, increasing the importance of intuition.

Des Traynor - Co-founder at Intercom - gets frustrated with everyone's reliance on data. He states: 'Data is a false God. You can tag every link, generate every metric, and run split tests for every decision, but no matter how deep you go, no matter how many hours you invest, you’re only looking at one piece of the puzzle. Besides, has anyone ever A/B tested the practice of running A/B tests? There could be better, albeit less measurable things, for a development team to do.'

Nobody can say that data hasn't had a positive impact on many decisions. It isn't, however, always applicable. The core concept of innovation is about starting something new, and as Alan Cooper, prominent software designer and programmer says: 'You can innovate or you can predict and measure performance, but not both. Which will it be, Mr Businessman?'

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