Big data isn't only helpful to huge enterprises. Your SMB can also learn a lot and make stronger decisions from big data.
Big data encompasses a wide range of analytics and data-gathering strategies. Essentially, it's the ability to capture, store and analyze data on a mass scale to inform business decisions. It follows basic logic: The more you know about a problem or issue, the more reliable the solution.
"Modern data analysis, including big data, is really just an extension of old methods," said James Patounas, senior data scientist at Source One Management Services. "Sometimes scaling too big is really not necessary and will simply unnecessarily increase the complexity."
In other words, big data is an opportunity for businesses to be more thorough in the way they analyze and understand the world. For a small business owner, it may not be feasible to use big data on the same scale as enterprise businesses. However, by fostering healthy data collection habits, and hypothesizing and running experiments on data you have at your disposal, you can make more informed business decisions. [See related story: How Businesses Are Collecting Your Data]
Big data vs. little data
Data is a resource – it provides companies with information to draw insights from. Big data is a growing field in both technology and business. There are several big data companies, like Tableau and Splunk, that businesses partner with to collect, interpret and understand data to help drive business decision-making. Other large companies have teams of data scientists who also specialize in this area. Either way, big data provides a new view into traditional metrics, like sales and marketing information.
"From a sales perspective, big data provides the most powerful insight into a target market," said Jason Sinchak, cybersecurity advisor at QxBranch. "It is the aggregation of demographic data beyond anything that has ever existed in the past. Businesses can employ this data to laser-focus marketing and sales spending."
While big data has become a buzzword in the tech industry, the way large companies use it illuminates what small businesses can do to make better business decisions.
Manny Medina, CEO of Seattle-based sales engagement platform Outreach, said small business owners shouldn't be intimidated by data. He is a former employee of both Microsoft and Amazon, and he said it's important for business owners to use whatever data is at their disposal.
"Use the data that you have. Get used to this world of data capturing, because everybody has a website and a website is tracking everything," he said. "Don't throw up your hands and say, 'Oh, I'm not a big data person, so I can't do anything' – no, use it."
The only real difference between big data and small data is scope: Big businesses with teams of data scientists are working with data on hundreds of thousands of customers. By the law of averages, this will ensure their insights and findings are more precise. Medina said this may be an advantage to big data, but small businesses and startups can reach similar insights through experimentation.
"With larger sample sizes, you have more certainty than you have with smaller sample sizes, but that doesn't make your result less valid," he said. "When you have small data, you have to rely on observations and experiments to make a decision. When you have large data, you can do all sorts of other things."
Big data means deeper insights and more certain findings. The breadth of information provides businesses with more reliable insights and can drive more confident decisions. For smaller businesses using data, drawing new insights starts with the approach.
The trick to thinking about data
Using data means starting with questions about your business. What are you trying to figure out? How can data provide you with an answer? By breaking down questions about your business and considering how data can help inform different decisions in those areas, small businesses can use information at their disposal in an efficient and productive way.
"Data is dumb; the interpretation of the data is what makes it very interesting," Medina said. "The way that I think about it is it's way more important to focus anybody's time on the kind of questions, breaking down the kind of questions that you want to ask [about your business] in the future."
For a business owner, this means thinking critically about your customers, product and goals as a business. Developing questions and hypotheses, then testing these ideas with data experiments and drawing observations is the best way anyone can use data. The overall concepts mirror big data practices; however, the outcomes can differ because of the breadth of information available.
In Medina's case, his company analyzed large amounts of data and was able to draw entirely new insights separate from an initial hypothesis about sales teams' performance.
"The luxury big data brings [is], all of a sudden, the data is whispering you some stories that you don't get with small data," he said.
Big data is a growing field that gives enterprise-level businesses the resources to make important, informed business decisions. There are several large companies that handle and analyze big data for businesses of varying sizes. While it's a modern concept, big data contributes to a business's overall decision-making in a somewhat traditional way: It allows companies to consider new ideas and make more informed decisions.
In the small business arena, there are several insights one can learn from larger companies working with big data. Small business owners should use whatever data is available to them. In the end, it's important to use data to make informed decisions.
"For small businesses – you're not Twitter," Medina said. "You don't have data scientists sitting around with data. You have to make a go-no-go decision almost on a daily basis. You can't wait."