In this blog post, we will explain the concept of Data Visualization, why startups need to utilize it, and how they can do so in an effective and valuable way.
What is Data Visualization?
Data Visualization is the process of converting data and information into a visual representation in order to make the information more apprehensible for the viewer. This is done by transforming data such as values and numbers into visuals such as graphs, images, and charts (Brush, 2020).
Why Should Startups use Data Visualization?
First of all, the main reason why a startup should use Data Visualization is that they should be collecting large amounts of data. According to Statista (2022), the total amount of data generated, acquired, and consumed will increase dramatically and will be worth 103 USD Billions by 2023. Big Data is here to stay and it is not only useful for large corporations, startups also need to take advantage of this business opportunity and start collecting large amounts of data (you can read more about big data for startups in our previous blog post here).
Data Visualization becomes important when it is time to actually make some meaning out of a large amount of data. Interpreting data can be an overwhelming process and if you are not an analytics expert, it could be hard to understand the large amounts of values. By transforming the data into visuals, both you and the intended viewer can quickly understand what meaning and insights the data contain. Therefore, Data Visualization is an essential skill set for any startup to have in order to seize business and marketing opportunities hidden in a large amount of data.
How can Startups utilize Data Visualization?
There are plenty of valuable ways for a startup to utilize Data Visualization. The data can be both quantitive and qualitative and the purpose is usually to either communicate or examine data. Look through our list of different types of data visualization methods and see if you can identify which areas you find the most valuable.
1. To make business decisions
Data is becoming increasingly important in business decision-making and a visual representation of the data is often required in order to spot the patterns and trends that can facilitate the decisions (Dublin Business School, 2021). This could for example be visualizing a sales report in order to be able to compare the monthly results and identify differences. You can also use tools that are automatically updated with new data such as key performance indicators (Brush, 2020).
Having the numbers on an apprehensible visual allows you to get fast insights into your startup. Especially in the growing stage of your company, you want to continuously collect interpretive data in order to seize all opportunities. Data visualization allows you to make a first quick analysis before you go more in-depth into the data (Brush, 2020).
2. For Idea generation
If your startup consists of a team, it is a good idea to make sure to simplify the data and make it available to everyone. When your team begins to understand your metrics and data, they can also generate better ideas, find solutions to problems and identify where to make improvements. Transparent communication of company data can have a big impact on team motivation, productivity, and engagement, allowing your startup to achieve success faster and with fewer mistakes (Meraki Musings, 2021). Through conceptional sketches and diagrams, you and your team can have meaningful internal meetings where you solve problems, innovate, and discover new opportunities.
3. Present to stakeholders or investors
At the startup stage of your business, you are likely to have a lot of meetings with stakeholders and investors. A great way of presenting your startup, ideas, and the logic behind your ideas in these conversations is to use data visualization. Through idea illustration, you can present complex ideas that can be more easily understood Trough General data visualization you can support your argument by using basic self-exploratory charts. This will also increase the chance of potential investors to actually remember the important key takeaways. Studies show that while people remember only 20% of what they read, they remember 80% of what they see (Meraki Musings, 2021).
4. Identify insights that could not be found in any other way
Data Visualisation offers tools that will identify important information in your data that you might otherwise not be aware of. Trough Visual exploration you can change values and parameters in your graphs in order to test possible outcomes as well as access dynamic and real-time data (Dublin Business School, 2021). It also allows you to monitor your marketing campaigns and track important metrics such as CTR, open rate, and conversion rates (Brush, 2020). Simply put; If you have a question about your performance or a need to understand data that you have collected - the best way to get some answers is through data visualization.
What makes good Data Visualization?
Now that you know why and how you can use Data Visualization we will start to look at important factors to consider while creating your visuals. No matter if you plan on using the data visualization to show for investors, make business decisions or generate ideas in your team - the following list will enable you to make strong and important visuals for your data.
1. Understand your viewer
One main factor to remember when creating Data Visualizations is that you must always consider the viewer to which the visuals will be presented. In order to make sure that you do you can follow the three stages of understanding which are;
- Perceiving: At the perceiving stage, the viewer tries to understand what is being shown to them. Consider if your viewer will understand all the parameters and values or if you need to make headlines and clearer designs.
- Interpreting: At this second stage, the viewer starts to apply meaning to what they are seeing. Here, you should consider the viewer's previous knowledge of the subject and level of interest.
- Comprehending: At the last stage the viewer decides how the data matters to them. This could be that they will be motivated to make a decision, have gained new valuable knowledge, or have an emotional impact.
(Dublin Business School, 2021)
2. Tell a story
By creating a compelling story rather than just presenting the data the viewer will understand the story behind the data and why it is important. This will increase the impact of the visuals and allow them to understand how they relate to them as well as increase the viewer's ability to make a good decision based on the visuals presented. This is especially important when you are presenting the data to viewers outside of the internal team such as investors and stakeholders that do not know your startup as well as you do. This concept is often referred to as ”storytelling” and includes three main factors; Data visuals and narrative (Dublin Business School, 2021).
3. Create an emotional Connection
Sometimes we can all be drawn to focus more on the positive side of our business intelligence, looking for opportunities rather than dwelling on the past. This however could be a mistake; knowing the full picture of the story behind both the positive and negative data, will create an emotional experience of loss that can motivate change (Dublin Business School, 2021). This concept is called Emotional Data Visualisation and ”the more that the clients are persuaded to connect emotionally to the story, the more likely it that they will feel compiled to act - whether that is to elect a change or for decision making” (Dublin Business School, 2021).
4. Choose the right tool
As a startup on a budget, there is no need to pay a data scientist for the interpretation of your data, instead, you can use free or budget-friendly data visualizations tools. When it comes to the selection of tools there are plenty to choose from. Many people begin with entering values on a Microsoft excel sheet and transforming them into graphs. This is good for small amounts of data and to practice your data visualization skills. However, there are better tools to choose from.
We recommend that you use Tableau.
The free version allows you to create all kinds of graphs and charts with great designs. There will be a Tableau logo attached to all visuals in the free version, so if you have an important investment meeting we would suggest that you upgrade to the premium version. The tool is one of the most popular Data visualization tools and it is not without reason.
There are plenty of other options as well such as Google charts, Data studio, Qlik, and Tibco. Canva has a really easy-to-use graph function that allows you to create good-looking designs, perfect for smaller amounts of data (Meraki Musings, 2021).
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You have now finished our article about Data Visualization, we hope that you have gained valuable insights and understood the truly great potential this tool holds.
Keep visiting the blog for more useful articles related to your startup business.
This article was written by Elin Jonsson, on March 6th, 2022
#Startups #DataVisualization #Marketing #StartupBudget #Data
References:
Brush, K (2020) ”Data Visualization”, Tech Target.
Available at: https://www.techtarget.com/searchbusinessanalytics/definition/data-visualization
Accessed on: 6 March 2022.
Dublin Business School (2021) ”Digital Marketing Analytics and Metrics: Data Visualisation”
Available at: https://study.dbs.ie/2021/hdip-dm/dataanalytics/u7/index.html#/lessons/FmrjSmRzxia7d1y-HRkVwWE15IW760k1
Accessed on: 5 March 2022
SR Analytics (2020) ”Is it worth investing in data visualization tools for SMEs?”
Available at: https://sranalytics.io/blog/data-visualization-for-small-businesses/
Accessed on: 5 March 2022
SR Analytics (2020) ”Data visualization: The practical guide for SME businesses”
Available at: https://sranalytics.io/blog/what-is-data-visualization-guide-for-business-owners/
Accessed on: 5 March 2022
Statista (2022) ”Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2025”
Available at: https://www.statista.com/statistics/871513/worldwide-data-created/
Accessed on: 5 March 2022
Meraki Musings (2021) ”Data Visualization for Small Businesses and Entrepreneurs”
Available at: https://merakimusings.org/data-visualization/
Accessed on: 5 March 2022
I really enjoyed the part about telling a story with your data rather then just presenting it which could cause a viewer to lose interest. I feel that by utilising storytelling to present your data it will increase your chances of achieving your third point which is to create an emotional connection with the viewer. I also liked the fact you recommended the tool Tableau to help with data visualisation and it showed me that you really know your audience since this tool is free. I look forward to using Tableau myself next time I have to present data so thank you for the tip! A great read and I very much look forward to reading the next blog!
ReplyDeleteI enjoyed the part when you talked about how to display the data; it is crucial to tell a story rather than just give facts, and that narrative should be presented differently depending on who is listening in order to establish an emotional connection with the correct tools. Marketers would sometimes give information about statistics without thoroughly evaluating what those numbers signify other than a value. This article is really interesting to me since it teaches me how to manage the information that I acquire.
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