Rather than choosing the comfort and security of a well-paid position at a large company, some of these coveted technicians choose to forge something of their own. A number of the most successful data startups have data scientists at their helm.
VentureBeat talked with a series of data scientists who went on to become founders and CEOs to learn more about how their background influences their leadership, product, and business strategies — and what it takes to succeed in an increasingly competitive, data-driven world.
All these data scientists-turned-CEOs put a heavy emphasis on data in their own business. They make data a core part of their strategy, operations, and decision-making process. Ultimately, data is only as valuable as what you do with it, and as self-described “data nerds,” these CEOs have an edge.
Editor’s note: Our upcoming DataBeat/Data Science Summit, tomorrow and Thurdsay in Redwood City, will focus on the most compelling opportunities for businesses in the area of datascience and data analytics. There are only a few seats left, so be sure to register now!
Shashi Upadhyay has a Ph.D in physics from Cornell. He analyzed humongous datasets as part of his doctoral research. After graduation, many of his classmates and colleagues took jobs on Wall Street, where they were well compensated for their knowledge of math and statistics.
Upadhyay accepted a position with McKinsey Consulting (a global management consulting firm), where he spent six and a half years advising on sales and marketing problems before founding Lattice Engines.
“As the world has gone digital, data volume has exploded, and retailers tend to have humongous amounts of data,” Upadhyay said in an interview. “I realized there was an opportunity to connect the dots between my experiences. It is hard for most companies to put together a data-science team and compete in the war for talent, and I thought instead they would look for automated solutions.”
LatticeEngines bills itself as “big data for big sales.” Its platform analyzes data and delivers real-time reports with specific data to sales representatives, who can use the information to generate leads and close deals. The engine uses predictive analytics to help sales people anticipate their customers’ behavior.
Upadhyay said that founders and execs of datacompanies must be the “masters” of three domains: They must have unique subject matter expertise, an understanding of machine learning, and the capability to build systems that can scale. And it’s rare to find a leader with a grasp of all three.
“If you spend all your life analyzing data, like I have, certain things become muscle memory,” he said. “You know what is important to the end users, what the problems are, what is doable, and how long something will take. What makes us differentiates us is we have all three of those pieces.”
Upadhyay’s datascience background is also important for recruiting data scientists to the Lattice team and ensuring they are productive and happy employees.
“Other companies make the mistake of bringing in data scientists and treating them like developers, but they are not the same,” he said. “Data scientists care about having an impact on the business, but companies systematically underinvest in training them in the domain and forming a linkage with other parts of the business.”
Thomas Thurston is something of a renaissance man when it comes to datascience. He has an MBA and a law degree and is a member of Harvard Business School’s Forum for Growth and Innovation.
Thurston spent a stint working at Intel Capital, serves as the chief technology officer and fund manager of the Ironstone Group (a venture firm that uses datascience to make investments), and is the founder and CEO of Growth Science, which uses data to predict if businesses will survive or fail.
“I think of datascience as a way of thinking about the world in terms of hypotheses, testing, confidence, and error margins,” Thurston told VentureBeat. “A background in datascience tends to help CEOs ask better questions and get better feedback, because it brings conversations down to a level of reality and practicality. Facts, data, and probabilities can have a way of removing the ego, politics, and hand-waving from a conversation.”
Thurston said that he favors hard data over more intuitive considerations. Like Upadhyay, he is a proponent of challenging all ideas until they are backed up with data and not taking anything for granted.
“It’s not that I don’t value intuition or more ‘soft’ inputs – sometimes they’re so important they can override everything else,” he said. “It’s just all too often in datascience that you see intuition, anecdote, and feeling get turned on its head by actual data. Everyone thought the world was flat. It looked that way. It felt that way. It was intuitive. It was also dead wrong. I find it corrective to try to keep this in mind. Like it or not, I can be wrong at any moment, so I must be willing to adapt.”
Thurston said his favorite “datascience moments” are when he learns something that flies in the face of conventional wisdom, and that these can become significant commercial advantages.
However datascience and the advantages it brings have yet to make their way into more mainstream businesses. Both Thurston and Upadhyay expect that the evolution of this field will involve making datascience more accessible to smaller, less tech savvy businesses.
Instagram isn't only a place to share perfectly framed photos of sunsets and selfies – some business owners have realized that the site works for pushing product, too. Today, e-commerce startup Soldsie, which previously focused only on businesses selling to their Facebook Page visitors, will now bring similar functionality to Facebook-owned Instagram.
More broadly speaking, Instagram's ability to be a marketing vehicle for businesses and brands has led to the growth of others, like Oracle-acquired Vitrue and Salesforce-acquired Buddy Media for example, which help companies manage their social media presence and run campaigns. And more recently, Instagram began experimenting with brand advertisements of its own.
But Soldsie's system is designed primarily for small to medium-sized merchants running daily and weekly sales, as opposed to individuals selling their own items, or those running some sort of marketing campaign.
“It's kind of like creating an e-commerce site, but putting it through Facebook and Instagram,” explains Soldsie co-founder Chris Bennett.
He notes that Soldsie had been quietly testing Instagramsupport with a smallnumber of merchants (under a dozen) since September, ahead of rolling it out more publicly today. And as with Soldsie's Facebook support, the process for selling on Instagram is simple for merchants and shoppers alike: a seller posts a photo of an item for sale and instructs users to comment “sold” along with their email address.
Buyers using Soldsie on Facebook complete their transactions on the site, but Instagramshoppers are treated a little differently. After commenting, buyers are automatically sent an invoice for the item in question via email, though the company is also offering an option that would direct shoppers to a form hosted by Soldsie instead.
The company is also now working with its merchant customers more closely, says Bennett, providing them support that includes advice on how to better run their sales, communicate with their customer base, and more. The pricing for either service – Facebook or Instagram – is not set in stone, Bennett adds, saying that it's now a mix of a minimum of sales or a percentage of sales.
During the beta period, the first business to test the Instagram selling feature saw 72 orders in its first day, and another business is seeing $ 1,000 per day in sales on average, says Bennett. “People are beginning to build their following counts on Instagram, and it's great to see that the businesses we work with are seeing a great return on investment for building up their following base,” he says.
However, Soldsie's beta tests have been too small to draw larger conclusions from at this point. What we do know is that social media can drive purchases – see, for example, the value of a Pinterest pin – but whether or not it will ever drive a significant number of in-stream purchases, so to speak, is something that's still being proven.
Earlier this summer, Soldsiereported over $ 10 million in transactions processed on its platform, and a reach of over 1,000 merchants. Bennett says the company is growing and has now seen $ 15 million in transactions as of today.
Matt Winn is Volusion’s marketing communications manager.
With the Internetsales tax debate lingering in Congress, many online retailers are anxiously waiting to see how passage will impact their business operations and bottom line. One major item that’s in flux is the “smallseller exception,” which states that online retailers earning less than $ 1 million in out-of-state sales each year are exempt from the requirements of the Internetsales tax legislation.
The idea behind the smallseller exception is to help remove the burden of the online sales tax from smallbusinesses and prevent any long-term impact on their growth. And while that notion may be an admirable one, the $ 1 million threshold is far too low and should be raised to a much larger amount.
1. The $ 1 million figure is arbitrary The wording of the current Senate bill implies that a “small seller” is one who generates less than $ 1 million in out-of-state yearly revenues. This threshold, however, is in no way related to the size standards defined by the Small Business Association. For some context, the SBA’s size standards “define whether a business entity is small, and thus, eligible for Government programs and preferences reserved for ‘small business’ concerns.”
In fact, the SBA has very specific definitions of a small business based on annual receipts or an organization’s number of employees. This information can be found in Title 13, Section 121 of the Code of Federal Regulations. Some examples of smallbusinesses within the “Retail Trade” industry include:
Furniture Stores: $ 19 million
Electronics Stores: $ 30 million
Women’s Clothing Stores: $ 25.5 million
Sporting Goods Stores: $ 14 million
With current small business standards already in place, the Marketplace Fairness Act has an approved baseline for what revenue amounts should and should not be exempt from an online sales tax. By following these guidelines, not only does it move the thresholds to an agreed upon standard, it helps protect smallbusinesses from the burdens imposed by a new online sales tax.
2. The $ 1 million figure puts a burden on small online retailers, impacting economic growth While the smallseller exception has good intentions in protecting the smallest of businesses from taking on the cost of implementing the online sales tax, it still places a big weight on the backs of small to medium-sized retailers. One study commissioned by a group known as the True Simplification of Taxation (TruST) states that retailers with five to fifty million dollars in annual sales will spend $ 80,000 to $ 290,000 in setup and integration costs, with annual costs ranging from $ 57,500 to $ 260,000.
Beyond implementation costs, here are some additional implications that the miniscule $ 1 million threshold could have on the economy:
Reduced incentive to grow an interstate ecommerce business: Why sell across borders and be forced to implement taxes when you can just sell at home?
A negative impact on overall online sales: Unlike in a retail store, online shoppers are typically required to pay an additional shipping fee. Mix this with an unexpected sales tax amount and online retailers will see a lift in abandoned carts and lost sales.
A potentially adverse effect on the macroeconomic landscape: Ecommerce has been a bright spot in the economic recovery, experiencing double digit growth across a span of multiple years. A potential slowdown in ecommerce growth could have larger implications for the economy as a whole.
3. The $ 1 million figure hurts the competitiveness of small businesses against mega-retailers
The fact that mega-retailers such as Amazon support the online sales tax legislation should be a red flag to smaller merchants. Whereas in the earlier days of the internet, when online selling was only accessible to the largest players, ecommerce is now readily available for businesses of all sizes. Because of this increased competition, mega-retailers see the Internetsales tax as an opportunity to increase their market share online, as these big brands can bear the brunt of the taxes that might otherwise harm smaller players.
To further demonstrate the play againstsmall businesses, Amazon is openly championing the Marketplace Fairness Act because, in many states, the company is exempt from collecting sales tax. Pair that with their lobbying and political power to further expand these exemptions, and it becomes clear that the world’s largest retailer is looking to expand its presence at the expense of small businesses.
Whether you agree or disagree with the idea of an online sales tax, it’s hard to argue that in its current form, the implications of the smallseller exception being set so low are real. Even more concerning, a recent House bill on the matter removes the small seller exception completely. As the debate continues across the country, small business owners would be well-advised to keep a close eye on this legislation.
Matt Winn is Volusion’s marketing communications manager, where he helps oversee the organization’s branding and communications efforts. Matt has created hundreds of articles, videos and seminars on all things ecommerce, ranging from online marketing to web design and customer experience.
Think the current pace of digital business is fast and furious? According to a new Forresterreport on the top technology trends, you should hold onto your virtual hat. The future is real-time, agile, elastic, engaged — and accelerating the blending of digital and physical businesses.
For startups looking for a new competitive advantage, a multilingual presence may be the answer.
While non-nativeEnglish speakers have long realized the value of pushing their products to the English-speaking market, nativeEnglish speakers are just beginning to realize the value of a multilingual strategy. More than just being able to launch a business in a second language, the world is becoming a multilingual marketplace. And whether it be Spanish, French, or even Mandarin, an additional language is becoming a necessity for many entrepreneurs to get ahead as the process of globalization continues to accelerate.
So what are the real advantages of a multilingual strategy? When we launched Everypost, a social media management mobile application, we made the app available in six languages from the start. Why? Because it was a more cost effective way to market our new product against larger competitors and create more awareness for our brand quickly. We were able to reach an international audience, giving us more users and more feedback faster than we could ever generate from solely launching in the English market. With each additional language, we had the opportunity to reach more customers. A multilingual approach is a cost effective way of marketing, widening your reach, and promoting your brand in new markets without having to spend heavily on other strategies.
With every additional language, the potential customer base widens. There are few other ways to receive a dramatic increase in customers for such little investment. In our case, we discovered there are over 101 million Internet users in Japan, over 17 million of whom are on Facebook — so translating our mobile application into Japanese was a definite way to find targeted users that would appreciate our social media solution. Even though our nativelanguages are English and Spanish, a large segment of our customers are using the app in Japanese.
French startupLikebook, a service that pulls users’ Facebook updates, photos, comments, and compiles the information into a unique paperback or hardback book, quickly internationalized as well. That company offers the service in six languages, specifically building on an enormous opportunity in Brazil — the country with the second largest number of Facebook users in the world.
Another company that took on the “reach-as-many-as-you-can” strategy from the start is Kiip’s self-service advertising platform, offering businesses the ability to instantly run their own ad campaigns to offer users real-world rewards. Kipp made the move to launch the self-service product globally in a whopping 11 languages across Latin America, Europe, the Mideast, Asia, and Japan — giving brands more reach, and giving developers of Kipp apps greater opportunity to successfully monetize their creations.
Setting up a business in multiple languages isn’t an easy task, but it’s feasible — and there are ways to make it easier. If you are just starting out or want to test offering your products or services in another language, try translating your business website with the help of a multilingual website plugin. It also helps having a multilingual team as part of your long term global strategy. This will ease the costs of translation services and you’ll receive continuous feedback from native speakers.
ClickBus, a Brazilian online booking platform for bus travel, has set out to reach 14 countries in its first year. After immediate success in Brazil, the decision to move into Mexico and Germany – after a law binding all German bus companies to the government came to an end — is giving ClickBus a huge chance to capitalize on the situation and expand its global customer base. With headquarters in Brazil, ClickBus plans to employ local representatives in each new market — a great way to smooth out the process of setting up shop in another language.
A multilingual business strategy is not only a gateway to global success, but also a tremendous advantage to increasing awareness for your brand. With Internet and mobile phone usage growing at an accelerated pace in the non-English speaking world, your business needs to plan how to keep up and stay ahead of competition. It is only a matter of time before multiple languages will become a standard for businesses, so by investing the time and energy now — or before even launching — your business can reap the benefits of the global marketplace.
Fernando Cuscuela is an experienced entrepreneur who likes nothing better than to start new businesses and make them profitable. He founded a successful Digital Media Agency, Clickbunker, and most recently he started Everypost, where he now focuses most of his attention.
Let’s make one thing really clear at the outset – most businesses in your niche look and sound exactly the same. Why? Because they are like 95 percent of all businesses – they are followers. After all, it has been said that 95 per cent of the world’s wealth is held by 5 per centMore Info »