Startups should be Data-Informed, not Data-Driven

Data doesn’t dictate; it informs.

Every team I’ve been a part of takes a data-informed approach, not a data-driven approach.

What’s the difference?

A data-driven approach relies primarily on data for decision-making.

A data-informed approach considers data along with other factors such as experience, user feedback, and intuition.

Why is data-informed a better approach?

Data alone does not capture the complexity, nor does it encourage a decision that is best for user experience or long-term company success. To take a data-driven approach means that an organization should do whatever accomplishes its KPIs.

What’s an example of data-driven decisions gone awry?

The following sounds extreme, but it was not an uncommon tactic in the early years of the App Store.

Let’s say you have an iPhone app. A KPI for your company is probably Monthly Active Users (MAUs). During a critical software update, you manually log out all of your users, and each user receives a push notification that they have been logged out and need to log back in.

The day after, you notice a surge in Daily Active Users (DAUs), which also lifted your MAUs, helping you exceed your KPIs.

Do you celebrate? You shouldn’t.

• A data-driven approach would prompt your team to repeat the forced logout process to crush KPIs.

• A data-informed approach recognizes that interrupting user sessions with a forced logout is terrible for user experience and that any “leap” in DAUs or MAUs isn’t the result of increased product usage by a large number of users.