Business ideas for 2014: Data analytics
You won’t be first to the party here, but the depth of opportunity to capitalise on the unending rise of Big Data in 2014 remains vast
It is estimated 90% of all the information on the web has been created in the last two years.
Social media and mobile devices are driving a veritable explosion in the amount of readily-accessible information. Meanwhile, increasingly sophisticated information gathering techniques store the data on countless hard drives and servers around the world.
The rise of ‘Big Data’, as it has become known, was one of our 2013 predictions that has more than fulfilled its promise, and the opportunity to start a data-based business isn’t going away.
Starting a data analytics business: Why it’s a good business idea
Companies in industries ranging from advertising to sports will gather terabytes more data in 2014 as more and more people voluntarily share a wealth of information about themselves – one estimate predicts there will be 5,400 gigabytes of data per person on the planet by 2020.
This big data revolution represents a goldmine for companies, from improving their internal efficiency to managing supply-chain systems and targeting consumers. The problem for them is that old ways of sifting through data just cannot handle the sheer amount of information, and most do not have the internal resources required.
Enter big data analytics companies – firms dedicated to breaking down, processing and forecasting this information into real, workable solutions for clients. By making sense of and navigating data, they help companies take advantage of the information they hold through efficiencies and the decisions they make.
This market represents a huge potential opportunity for entrepreneurs smart enough to capitalise on it; IBM research claims that the big data analytics market will grow by around 30% a year, so there is lots of opportunity for new companies to enter this space.
Data analytics business opportunities?
Big data opportunities are everywhere; virtually any kind of data can be sorted and leveraged for commercial gain, so it is a question of picking a sector you’re familiar with and creating an app or website that crunches and presents the data insights clients need.
It is predicted cloud-based ‘predictive analytics’ software will be where the money is going forward – in other words, software that not only makes sense of existing data but uses it to learn and accurately predict future trends.
Retail and e-commerce is a particular industry that is set to benefit from big data analytics. Research by MGI and Mckinsey’s Business Technology office claims a retailer using big data could increase its operating margins by more than 60% compared to one that does not.
More and more transactions are being completed online and this, coupled with increasingly sophisticated location-tracking and data collection methods, means retailers have the capacity to build up a complete picture of who is buying their products, when, and in what quantities.
Not only that, more and more products remain ‘connected’ after purchase and the ‘Internet of Things’ ensures data will pulse constantly from them.
Another related avenue is in advertising and marketing – especially in social media. Marketers are still getting their head around audience targeting on social media sites such as Facebook.
But the reality is a single user of social media is likely to have a collection of social media profiles (on Facebook, Twitter, YouTube and so on) which they will use for different purposes. There are a number of ways you could pull this disparate information together, and if you can find something unique to offer marketers with it your start-up could really take off.
Last year, the government published a white paper detailing its commitment to making public sector information as open as possible, in recognition of the key role open data can have in driving economic growth in the country.
It has committed to opening all non-sensitive public sector data to free use by 2015 via data.gov.uk –opening a veritable goldmine for potential analytics companies. Some 40,000 highly detailed data files are already being turned into apps and showcased by the government.
With government departments continually on the hunt for greater insights and efficiency and the chance to use public data to create commercial apps and websites, the coalition’s open data pledge is hugely significant.
As cabinet office minister Francis Maude said: “This is a huge step forward and will be a particular boost for the innovators and entrepreneurs who can use open data to create products and businesses that will fuel growth in our economies.”
Who else has started a data analytics business?
This probably isn’t a start-up opportunity for newcomers. A background in IT, analysis or boasting a wealth of industry knowledge, are near prerequisites.
Analytics companies are already making big strides in social media, which is perhaps the most well-developed sector area.
Reading-based data mining start-up Datasift, which aggregates, filters and extracts insight from social media sites across the web, recently raised a huge $42m in a Series C funding round, taking the total raised to $70m – you can’t get a clearer endorsement of the sector’s potential than that.
One of a growing number of Manchester-based tech start-ups, CANDDI is a big-data analytics platform that promises to tell businesses who visited its website, who they work for and what they did during their visit.
Founded in 2009, the proposition has clearly struck a chord with clients as the company now has 190 customers around the world, including France’s biggest discount shopping site.
Mike Tuchen, chief executive of cloud-based data analytics company Talend:
“Big data was arguably one of the most hyped concepts of 2013. Everyone speaks about the value of big data, but data-driven organisations have got so much more potential to uncover. .
“To succeed in 2014, these organisations will need to leverage big data and the cloud to derive insights that enable them to optimise their processes, take advantage of emerging opportunities, and deliver better business outcomes.”