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I have yet to meet the founder, who does not see data as one of their critical success factors as a startup. And still very few founders and their teams are fully confident, that their approach to data is having a strong impact on their growth, let alone using it’s full potential.
Why is that?
I have found that it comes down to a combination of clear objectives, organizational alignment and technical execution. We’ll be covering in this article, how data audits can help you identify where you and your organization currently stand, what the biggest potential sources of issues are, and give you first steps on getting them sustainably resolved.
Why Startups Need to Audit Their Data
Before diving into the 'how' of data auditing, it’s important that to have a clear understanding of the 'why'.
Being a data-informed startup with an active data-culture means decisions are supported regularly, if not always, with data. Data integrity is the foundation for this, as without it, any performed analysis is as risk to be flawed and lead to misguided strategies or tactical decisions.
Once trust in the data is lost, it is hard to win it back, often taking disproportionately more effort than having good data governance in the first place. Without intervention, a downward spiral of data quality leads back to decisions based on gut feeling and anecdotal knowledge.
Data audits serve multiple purposes, from compliance with regulatory standard like GDPR, to the quality of your data. For startups, where resources are limited and opportunity costs are high, it’s tempting to cut corners and “just quickly get it to work”. Similar to technical debt, these shortcuts can or lack of oversight might in the best case accumulate to a later costly rework, while in the worst case make certain data use cases impossible.
Consequently, we recommend startups to not aim to have every single rock turned around, but acknowledge certain guide rails and principles. At the end of the day, an audit should not be one-off mammoth effort, but something that can be facilitated in a defined regular cadence.
In the following we’ll cover how to run a data audit in a startup context, to ensure the data gathered is relevant, actionable, and directly tied to key performance indicators that reflect your startup's growth objectives.
The Data Audit Process: A Step-by-Step Guide
Conducting a data audit can seem daunting and, let’s be honest, won’t spark a lot of joy thinking about it for most of us. I like to see it as as plowing the field, while already excited for the later results growing from it. By breaking the approach down into manageable steps, you can approach the process methodically, and also loop in other team members where helpful. . With that, let’s dive into the step by step guide for you data audit journey.
1. Define Your Data Audit Goals
Start by establishing clear objectives for your audit. What do you hope to achieve? What are the business areas that are most important for you to cover?
The goals of the audit will depends on which data use cases you and your stakeholders has identified as important.
These use cases should be in support of your company goals of your annual or OKR planning.
Audit goals might be
- Identify issues in our marketing analytics
- Be confident in our revenue reporting for investors
- Flag potential issues on GDPR compliance
2. Gather Your Data In alignment with your data use cases, identify which data sources are relevant, and where the data currently lives (=saved / stored). You may ask:
- Through which data sources are your currently collecting data?
- Which data sources would be needed to support your use cases, but are currently not providing any data yet, and should be?
- Are the identified sources comprehensive for customer data, financial records / revenue data, marketing analytics, product / behavioral data, …? Think again which types of data are needed for your priority use cases and objectives.
- Which databases and systems store data? Is there a leading system, that is considered the most accurate?
3. Assess Data Quality And Format To evaluate the accuracy, completeness, and reliability of your data, start with your source of truth. What is the dataset you trust most? Go from there to identify inconsistencies, duplicates or missing data.
Keep in mind different systems and tools are handling data differently. For example, trying to have 100% matching data in Amplitude and GA4 is a losing battle. Going from your source of truth data set, you could match how many subscription confirmations you have for last month, with how many subscriptions are registered in your analytics tool.
We could write a whole book about data formats and tracking plans (and there are), so for the purpose of this article, we’ll stick to the high level concepts:
- Tracking Plan: For your behavioral analytics, make sure you have a tracking plan in place that maps your critical user flows and actions, and ensures a consistent logic of events, event properties and user properties
- Object based and event based: While some tools (especially in Business Intelligence) are working with an object based data format, others (e.g. Amplitude) are event based.
- Contextual data: When you look at your data from a use case perspective (e.g. marketing analytics), the action itself (e.g. a transaction) often won’t isn’t enough. Likely you will want to know which marketing initiative was contribution (e.g. campaign ID), what experience the user had leading up to the purchase (e.g. behavioral tracking history), and maybe what tech they were using (device family, OS, …). Consider which context needs to be carried over throughout the user journey and validate, that this is the case.
4. Review Data Collection Processes After identifying your data sources and the data your collecting, review how the data is collected exactly. Questions you may ask:
- Which gaps do you have?
- Is the data flow efficient and robust?
- What are the methods of data collection (SDK, Server-side, …)? Is this the best method for the respective context?
- How easily accessible is the collected data and where it is send to? Can the data be further exported or send to other systems, are is the destination a dead-end?
5. Check Data Compliance It’s no secret that Data Compliance (e.g. GDPR or CCPA) is often one of the least favorite items on any list, although the importance is hard to argue with. It’s not just about avoiding fines and reputational damage, but also respecting the trust users have given in handling their data.
I’ve found the topic to bring more enthusiasm, and even direct ROI potential, when taking the perspective of use cases. For example, if the goal is to have automated, personalised communication, what is needed for this?
Let’s go through an example:
We want to send an email to uses who have started but not completed their onboarding yet.
- Analytics tool: We’ll need to track the user behavior in the onboarding, and send the user who do not complete onboarding to an marketing automation tool.
- Marketing automation tool / CRM: Since the message should be personalized by name, the system needs to know the user name and onboarding status.
6. By identifying what the respective tool needs to know for the use case, we can also conclude what is not needed, and might be possible to remove:
- The analytics tool does not need to have the email address, post address or name of the user, by working with a unique user ID
- The CRM does not need to have any information on payment details or other sensitive information
7. Beside of running a regular compliance check, mapping out core use cases can be a good way to both check if / how they are possible, while identifying where personal or sensitive data can be removed without hurting the business needs.
8. Develop a Data Management Plan When moving through the steps above, make sure to document your findings, and the new ideal state. From there, create a plan on how to get to that ideal state. I personally like to start with a gap analysis (current state vs. ideal state) and create a plan on how to bridge it.
In order to sustainably have a good level of data quality, data maintenance has to be part of your data culture. Therefore the initial improvement plan is just to set the foundation to then build on with a solid data governance, that consists of routine processes, stakeholders roles and documentation.
Appointing multiple people for specific areas is an effective way to share the load and hold each other accountable. These roles may follow the expertise and focus of the team member. A data enthusiast product manager can be a great fit to be responsible to flag any data issues in Amplitude. While a performance marketer overlooks marketing analytics. It’s important to discuss responsibilities of roles: It’s a thin line between monitoring and flagging issues, and solving them.
9. Implement Changes Teams are rarely happy if changes are done to them, rather than with them. It’s best to start out with all needed stakeholders from step 1. Having heard and considered all voices, together with their goals and needs for the data, and having developed a plan to address them, will feel very different, than jumping out of the blue with a list of seemingly random action items.
With the documentation created throughout the audit, you can recap the initial goals and use cases to ensure everybody is on the same page on the context and why this is relevant not just for the business, but for them individually and their team. The plan of action for the initial foundation and the later processes should be understood by everybody, both in principle and where needed in detail.
Be concrete in the next steps, and timings. Already sending calendar invites for regrouping, can ensure the topic doesn’t drop from the agenda. As with any change management, the day to day business and habits can get in the way fast, before the new ways of working take hold.
10. Monitor and Review Data management is an ongoing process. Find a cadence that is works for you and the team, and is realistic in maintaining sustainably. You may start with a more frequent cadence, and space them out further once everybody found their rhythm. How often you run data audits, relates to how rapidly your goals and use cases are evolving.
Conclusion
Running a data audit is a powerful tool for startups to establish a solid data foundation for growth. By ensuring data integrity, identifying gaps, and creating a clear roadmap for data usage, you can make sure that your startup is not building up “data debt” that needs to be painfully addressed down the line. Data Compliancy and being effective in addressing your data use cases often go hand in hand. Identifying the synergies is an efficient method in being great in both areas.
Data can be one of your most valuable assets — Being conscious and clear about how it is gathered and maintained, let’s it realize it’s potential, and it will serve as a powerful engine for your startup's growth.
FAQs:
How frequently should a startup conduct data audits to maintain data integrity as it scales?
Startups should conduct data audits at least annually or bi-annually, with additional audits triggered by significant data changes, new data regulations, or major business transitions to ensure ongoing data integrity.
Can the data audit process be automated, and if so, what tools or platforms are recommended?
Yes, data audit processes can be partially automated using tools like data management platforms (DMPs), customer data platforms (CDPs), and specific audit software that provide analytics, reporting, and monitoring capabilities.
How to prioritize actions resulting from a data audit, especially when resources are limited?
Prioritize actions based on their impact on the business goals, regulatory compliance requirements, and the severity of data integrity issues. Focus first on high-risk areas and those that directly affect customer experience or operational efficiency.
