"business analytics so important for entrepreneurship and innovation"

Not certain if this is a statement or a question. Why and based on what do you say this?

Generally the entrepreneur needs to know how to actually operate and run his business. Can be as important as having a good idea.

I think that the question is not clear. In general, statistics and business analyses are important for entrepreneurship. They allow managers to make good decisions.

The analysis of the market environment allows to situate the company itself or future business, in order to see if it can or how it can compete.

This really should be the question: when is business analytics important to entrepreneurs?

Business analytics are irrelevant to the entrepreneur in the early stages of a new venture. Unless of course your new venture is selling software or services for business analytics.

Where BI/BA becomes important is the crucial stage when a firm delivers a product/service to market and has had a period of successful selling. It is at this stage where all the controls get put in place. (This is also the point at which founders, if they have relinquished control to VCs while raising money, get forced out of leadership positions and 'adult supervision' gets hired by the VCs to run the company.)

There are several places where analytics become important. First of course is in finance--where is the money going, can it be spent better in other ways. This is not the same situation an established firm finds itself in. New ventures run themselves according to their statement of cash flows not their income statement or balance sheet. Cash management is king for the new venture. The balance sheet is mostly irrelevant. The crucial test is can I make payroll and pay my bills? How long do I have before the money runs out? If the firm crosses the chasm (cf. Geoffrey Moore's Crossing the Chasm), you will begin to run the firm as a more established business and the usual financial controls get put in place and the management accounting gets more conventional like you learned in business school.

Some of the interesting areas for analytics in new ventures revolve around opportunities for improving sales. One of the most difficult aspects of innovation is how to price it. A guide to pricing a new product/service is lacking. BI/BA can help with modeling.

A story: At my last go-round in a startup, we ended up completely redoing the business model. (I came in with the 'adult supervision'.) The firm's original business plan was taking an open source software project commercial and selling off the web. It was an utter failure. What we discovered was that at $99 off a web store, the customer perceived no value over the free open source project. We redid the business model on an direct enterprise software selling model and that worked. We then, over a period of 4 years, ratcheted up pricing to find the sweet spot where we were maximizing revenue. (It settled around $5,000 a copy plus 30% annually for support, versus $99!) This could have been handled better if we had had a smart MBA in business operations modeling the elasticity of demand.

Another area where analytics can help is in choosing where to innovate. I am a big proponent of Outcome Driven Innovation. It is a structured innovation paradigm and here there is value in number-crunching survey results to help decide where to put precious engineering resources to work. A common trap that small companies serving enterprise customers fall into is roadmap capture. Because the stakes are very high in every sale, one or two noisy customers end up capturing the roadmap with features for themselves. Sales people are coin operated and will be advocating to product management/engineering for innovation according to the last deal. Knowing where to innovate to address the largest market from ODI is a better way to drive feature set.

A word about entrepreneurship education

Since you asked about curriculum, I'll give you my $0.02 about entrepreneurship education in business school. It is wholly inadequate. I got my MBA while in my 3rd startup, so I had been around the block a few times. I took the entrepreneurship class for the heck of it. The course was taught by a professor who had started his own business, so had experience, which is good. The down side, was the course was overly focused on the business plan. The business plan is actually not a plan. It is a sales document you will use for raising money.

Doing the business plan is good for the entrepreneur because it forces the entrepreneur to answer the hard questions, but it is not a plan. It is a fiction (especially the finance portion). The business plan will not survive first contact with reality (see the original selling model in startup #3 above).

Were I teaching entrepreneurship, I would leverage guest speakers to impart wisdom in launching new ventures. Bring in a VC to talk about how they make decisions to invest. Bring in an HR person from a startup to talk about how they make early hires. Bring in an experienced CFO to talk about 'guerrilla finance' (the tricks they use to keep the money flowing (convertible debt, lines of credit, extending payment terms, prioritizing vendors, etc.). Bring in a VP of Engineering to talk about their development process and prioritizing scarce resources. Bring in a product manager to talk about pricing and roadmap prioritization. Finally, teach sales models: OEM, enterprise, SME, government, consumer. All have their unique challenges and affect the business plan greatly, yet the average business student has no clue. They usually come with the idea: 'I will build the best product I can and see what happens'. Business schools do a great job at teaching everything in business except selling. Business schools teach marketing but they don't teach sales. There is this sort of magical thinking in academia that if I market the product right, then sales just happen. It is because academics like to think in terms of impersonal forces. The reality is that sales models really matter. As an entrepreneur you will be faced with having to decide very early on a sales model based on direct/indirect and the target market (OEM, enterprise, etc.). Choose the wrong one for the product and you are doomed before you even start.

Business analytics helps an entrepreneur to make better decisions and forecasting.

Business analytics is crucial for success, but could be better if we separate the order of analyzes. for instance below mentioned ways can give total view of business effectiveness, such as:

HR analyzes;

Management decision analyzes;

Marketing analyzes;

Financial analyzes and etc.,

and finally we'll get overall statistical data ….. I think this is a simple way to develop innovations in business.

Interesting discussion! Following

interesting

I add for this discussion the following: what is the difference between analysis and analytics?

analytics refer more to the tools of analysis

Following answers

Hi,

Just as Business Intelligence collects and helps to understand data from the past, Business Analytics, in turn, allows us to build a clearer vision of the future. Therefore, in my point of view, BA can be important for the prediction of future events and identify business opportunities, including innovation in startups or in established companies.

Business analytics is the field of business about gathering and describing data, analyzing past data to predict the future and using data to suggest a course of action. Without business analytics proper managing of a business is almost impossible. On every field of an organization (personnel, information, organization, finance, marketing) data (past and present) must be gathered, properly described to use for prediction and taking action on strategic, tactical and operational level. That’s why every business is a data business, because gathering, describing, using them for prediction and taking action is very important for every organizarion.

So for entrepreneurship data analytics is key. If you want to take certain action or making certain decision you have to base on on data. As is it for innovation.

Data Science helps in making the right business decisions.

Data science is a tool to use in for business analytics and for gaining information which decisions to make. But no matter how good your analysis and information are, if not interpreted and implemented well, it will be useless. So the enterpreneur must understand the analytics well.

La analítica es la base sobre la cual se construye y fortalece la decisión en el ámbito de la gestión empresarial, al tiempo de conjurar el riesgo inherente a toda improvisación.

thank you for your contribution to this discussion.

Still interested to other comments.

Business analytics is important, but is also has its negative side. Metrics as part of business analytics can't replace good strategy. It is good to read The Harvard Business Review (September-October 2019, Volume 97, Issue 5): Are Metrics Undermining Your Business?