How to recognise when you really need a CDO in your Startup
As we have explored in previous posts, startups don’t need a CDO (Chief Data Officer) to start with, as the responsibilities of the role can be split between existing team members and ad-hoc outsourcing to specialists covering any skills not available in-house. But you will need to seriously consider having a CDO before you start losing money due to data handling issues, spending lots on processing and storage that’s not needed, malware attacks, and the opportunity costs of not knowing enough about your business and customers. First see: What a Chief Data Officer does for a startup if you want to know more about the CDO role itself.
So now - how do you know when it’s time to bite the bullet and set up a proper CDO function within your growing business?
Sign 1: Rising Costs
The most immediately obvious sign will be the growing costs of building and maintaining data maturity within your startup. These may be immediate monetary costs of taking a scattergun approach to bringing in consultants for more and more ad-hoc tasks, or the more invisible costs of other team members taking time away from their main tasks to build and maintain data infrastructure, audit for compliance with legal and ethical obligations, and so on. It can also be the opportunity costs of “making do” without proper data infrastructure, policies, and practices: those little projects everyone agrees we “should do as soon as possible, because it’ll enable us to really understand our user’s behaviours” but keep getting put off because nobody has time.
Sign 2: Growing risks
A subtler sign, but more alarming when you do notice it, is that your startup’s data landscape is full of uncertainty and fear. When people aren’t sure if a huge log file or database dump found lurking (and costing you significantly) in a cloud storage bucket is still needed for anything, or nobody can confidently tell you where all the customer personal data is, or whether you’re compliant with all the regulations that apply to you, when you have absolutely no way of knowing if some malware is leaking all your data to a third party - or if when you happen to find such malware by chance, you have no way of telling how long it’s been around or what it’s had access to, or when you know you’re losing important insights because you’re not doing the analytics you should be.
What to do next?
When you’re seeing either or both of those signs, you’re losing money and risking trouble, so it’s time to act fast. If you can find and afford to hire a full-time CDO, you need to get started on that as soon as you can - it’ll take a while to get them on board, and for them to audit and understand your already-messy data landscape before they can start making improvements.
But if you can’t get a full-time CDO yet, you need to outsource: CDO As A Service will include an initial audit, producing a report including documentation of what you actually have as well as prioritised recommendations ranging from urgent compliance/security concerns down to “nice to have” suggestions. They can then work on a retainer basis to provide ongoing support and development of culture, procedures and policies, and will reduce the cost of ad-hoc consultancy required to build infrastructure by using their understanding of your organisation to bypass the discovery and analysis phases that a consultant would normally require. They will be able to scale up their involvement as your needs grow, until you are ready to bring on your first full-time CDO - at which point they can hand over a data-mature organisation and get your CDO up to speed quickly.
If you’re seeing the signs that your startup needs a CDO, get in touch with us to discuss how to get started.
Author
Tags: