Winning with Data

Winning with Data explores the cultural changes big data brings to business, and shows you how to adapt your organization to leverage data to maximum effect. Authors Tomasz Tunguz and Frank Bien draw on extensive background in big data, business intelligence, and business strategy to provide a blueprint for companies looking to move head-on into the data wave. Instrumentation is discussed in detail, but the core of the change is in the culture—this book provides sound guidance on building the type of organizational culture that creates and leverages data daily, in every aspect of the business. Real-world examples illustrate these important concepts at work: you'll learn how data helped Warby-Parker disrupt a $13 billion monopolized market, how ThredUp uses data to process more than 20 thousand items of clothing every day, how Venmo leverages data to build better products, how HubSpot empowers their salespeople to be more productive, and more. From decision making and strategy to shipping and sales, this book shows you how data makes better business.

Big data has taken on buzzword status, but there is little real guidance for companies seeking everyday business data solutions. This book takes a deeper look at big data in business, and shows you how to shift internal culture ahead of the curve.

• Understand the changes a data culture brings to companies
• Instrument your company for maximum benefit
• Utilize data to optimize every aspect of your business
• Improve decision making and transform business strategy

Big data is becoming the number-one topic in business, yet no one is asking the right questions. Leveraging the full power of data requires more than good IT—organization-wide buy-in is essential for long-term success. Winning with Data is the expert guide to making data work for your business, and your needs.

Introduction ix

Chapter 1 Mad Men to Math Men: The Power of the Data-Driven Culture 1

Operationalizing Data: Uber’s Competitive Weapon 2

The Era of Instant Data: You Better Get Yourself Together 4

Data Supply Chains: Buckling Under the Load 6

Management by Opinion: The Illusion of Knowledge 8

Our Vantage Points 10

Chapter 2 Four Problems with Data Today: Breadlines, Obscurity, Fragmentation, and Brawls 15

Data Breadlines for the Data-Poor 15

Data Obscurity: The Failure of the Card Catalog 17

Rogue Databases and Analysts: The Data Fragmentation Problem 19

Data Brawls: When Miscommunication Devolves into Arguments 21

Chapter 3 Business Intelligence: How We Got Here 23

Business Intelligence Is Born: The First Query 23

Databases for the Masses: Oracle Commercializes Codd’s Invention 24

Legacy BI: A Three-Layer Cake 26

Google’s Answer to Huge Data: Vanilla Boxes 27

600 Petabytes per Day: HiPal at Facebook 30

Extreme Data Collection: The New Normal 32

Looker: Weaving the Data Fabric 33

Chapter 4 Achieving Data Enlightenment: Gathering Data in the Morning and Changing Your Business’s Operations in the Afternoon 37

Not Just Another Person with an Opinion 37

Aligning Sales Teams in Real Time 48

Scaling Sales Teams with Data 50

Determining Customer Satisfaction at Every Point in the Buyer Journey 52

The Rosetta Stone: Developing a Shared Data Language 55

The One Equation That Defines the Business 57

Brutal Intellectual Honesty: Speaking Data to Power 60

Putting Pride in Its Place: How Data Transforms Cultures 66

Chapter 5 Five Steps to Creating a Data-Driven Company—From Recruiting to Regression, It All Starts with Curiosity: Changing the Culture 71

It All Starts with Curiosity 71

Why You Should Stop Listening to Your Boss 72

How to Recruit Curious People 76

Chapter 6 From Hacks to Harmony: The Typical Progression of Data-Driven Companies 83

Step 1: Ask Your Friend, the Engineer 84

Step 2: Bastardize an Existing Solution 84

Step 3: Access Raw Data 85

The Crux of the Problem 85

Bring Your Own BI: The Five Letters That Will Change the Data World 86

The Power of a Unified Data-Modeling Layer 89

The Final Step: A Data Fabric 92

Chapter 7 Data Literacy and Empowerment: The Core Responsibilities of the Data Team 95

The Illusion of Validity: How to Avoid Data Biases 95

Correlation versus Causation 98

How Facebook and Zendesk Engender Data Literacy 100

Walking the Data Gemba: Training by Walking Around 104

Chapter 8 Deeper Analyses: Asking the Right Questions 109

When Data Confounds Our Intuition: How to Handle Ambiguity 112

Data Is Useless Unless You Can Act on It 115

Defining New Opportunities by Creating New Metrics That Matter 120

The Fastest Growing Media Site of All Time 122

How to Run a Data-Backed Experiment: Step by Step 124

Chapter 9 Changing the Way We Operate 129

Change Begins with a Story 129

Deliver Data with Panache: Structuring Presentations to Inspire 133

Chapter 10 Putting It All Together 141

Acknowledgments 145

Appendix: Revenue Metrics 147

Index 155

TOMASZ TUNGUZ is a venture capitalist at Redpoint and writes daily, data-driven blog posts about key topics for startups including fundraising, startup benchmarks, best practices, and team building.

FRANK BIEN is CEO of Looker, exploration and discovery business intelligence platform. He has built his career on nurturing strong corporate culture and highly efficient teams.

The biggest hotel company owns no hotel rooms, and the largest taxi company owns no taxis. Both organizations wield data better than any of their competitors to disrupt their industries. That's how powerful data can be when it's optimally leveraged. To gain a competitive advantage and dominate markets with data, you need to harness the power of curiosity and forge it into innovation with the step-by-step process in Winning with Data.

Venture capitalist Tomasz Tunguz and seasoned executive Frank Bien provide a rare insider's look at the transformative cultural changes data engenders in teams and companies. Winning with Data provides tactical advice gleaned from category-defining companies so you can replicate these techniques. Whether you need to merchandise inventory better, measure and respond to customer requests faster, incentivize go-to-market teams effectively, or metamorphose your team's culture, the clear and easy-to-practice guidance inside gives you everything you need to spark and fuel data-based conversations and decisions.

Illustrative, trenchant case studies give you an up-close and detailed look at how the leading data-driven companies disrupt industries with data. Get a privileged look at the specific strategies, techniques, and thinking behind how data is used by:

• Hubspot to develop best-in-class sales measurement and execution
• Warby-Parker to determine what models to ship and subsequently disrupt a $13 billion monopolized market
• ThredUp to transform the second-hand clothing business and process more than twenty thousand items of clothing every day
• Venmo to gain insight into user behavior in order to build the wallet for the millennial generation

Data is transforming the nature of business in fundamental ways but most people are asking the wrong questions: big data, small data, structured data, unstructured data. Instead, the right questions are, "How do we get exactly the right insight into everyone's hands at the moment they need it?" With the authors' widely practiced methodology, the entire company can speak the same language and decide based on the same facts—not opinions—to outperform.

TRANSFORM YOUR COMPANY'S CULTURE TO CREATE COMPETITIVE ADVANTAGE

Winning with Data is the authoritative guide to revolutionizing your team's and company's culture to wield data to gain a superior competitive edge over your competition. Until now, organizations have had very little dependable guidance for analyzing data to develop sustainable competitive advantage. This practical guide shares the techniques, tools and tactics used by some of the most disruptive companies in the world, and explains the methods to replicate these patterns. Leading experts in big data, business intelligence, and business strategy Tomasz Tunguz and Frank Bien demonstrate leveraging the full power of data requires more than good infrastructure—it demands a universal lexicon, agreements between teams, ongoing education and infusing meetings with data.

This complete resource illustrates how to efficiently instrument a company to collect and analyze the wealth of data available, including:

• Developing the right metrics to collaborate effectively across teams
• Structuring experiments and conversations with data effectively—along with tips for avoiding common data biases that lead teams to the wrong conclusion
• Educating your team and company on the most effective mechanisms for answering key business questions
• Sharing and presenting analyses and conclusions to reach the best decision

The incisive case studies from some of the most disruptive companies in the world inform how other companies can transform their cultures to invent and develop their own competitive advantages. Start turning information into competitive advantage today with Winning with Data.