Masters of Scale with Reid Hoffman – Sheila Lirio Marcelo: No data no scale
No matter what phase of growth you’re in, you need useful, cost-effective data. Data is essential to scale. Take it from Sheila Lirio Marcelo, the founder and former CEO of Care.com, the two-sided marketplace connecting working families with care providers.
Marcelo scaled her business past the competition by getting the right data at the right time. As she says, “Something I coach a lot of entrepreneurs on is this: You can have a great vision and idea, but start with a lot of data and testing.”
Art fields: transforming a small town through art
ArtFields, an annual celebration of Southern visual art, transformed the small town of Lake City, South Carolina, from a dead Main Street to a bustling small town. The celebration showcased paintings, sculptures, installations, and quilts and boosted the small businesses of Lake City.
The artwork was placed in businesses instead of galleries, which allowed visitors to naturally become customers. The economic impact of ArtFields has been significant; a study in the first year saw over 20,000 people come to the event, generating $5.4 million in revenue.
Gathering data and feedback from local businesses helps to highlight the impact of the event and provide valuable insight into its effectiveness. Therefore, data is critical to scale, and collecting useful and cost-effective data is important at each phase of growth.
The importance of being data-driven when scaling a business
When gathering data to scale a business, it’s important to get the right kind of data. Asking friends and family for support may provide a boost, but it won’t necessarily lead to scaling. Surveying only a specific population, like diabetics, won’t be useful either. Gathering data from a large group of people can be expensive and impractical.
Example: Sheila Lirio Marcelo, founder of Care.com, emphasizes the importance of being data-driven and testing ideas with data. She grew up in a family of entrepreneurs and learned the value of embedding culture and language in children. Gathering information regularly and strategically is crucial to scaling a business.
Test and iterate
Testing and iterating early on in a company’s development can lead to valuable insights and greater success. Learning from unintended outcomes and seeking the right information will help build a strong foundation for a thriving company.
While personal experience can motivate entrepreneurship, gathering data is crucial to ensure that a business idea can work for a broader market. Seek advice and gather information to determine the scale of the target customer.
No data, no scale. But not all data is created equal. So look for the most useful—and most cost-effective—data you can at each phase of growth.
Something I coach a lot of entrepreneurs: You can have a great vision and idea, but start with a lot of data and testing.
Data is not just numbers. It’s also stories. It’s also emotions. It’s also feedback. It’s also testimonials
Analyzing feedback data
- Asking for feedback from professionals and gathering market data can help determine the potential success of your business idea.
- Starting with cost-effective methods like asking the right questions and observing market trends can lead to successful growth.
- Hire a small team of college students to analyze your target platform, use data to make informed decisions, analyze user data to determine target markets and verticals, pivot when necessary for growth, consider charging or making the marketplace free for liquidity.
Focus on impact
- Gain more users to gather data, adjust to macro trends, consider safety and social impact, and focus on economic productivity while having a vision for social change.
- By focusing on impact instead of earnings, not-for-profits and social mission-driven for-profit companies can achieve sustainable success. Entrepreneurs of all organization types can benefit from data-driven decision-making to scale their mission.