#### **_How to increase the valuation of your business by converting it into a data business?_** You might have heard the following news: - Mr. Mukesh Ambani said that data is the new oil. - Facebook has invested $5.7 Billion or Rs. 45000 crores in Reliance Jio. #### Do you know what does such news means or what actually is happening? In this Corona time, the value of crude oil is decreasing and the value of data is increasing. How can you convert your business into a data business? If you can convert your business into a data business, then the valuation of your company will increase drastically. ## **#1 Examples of Data Companies** #### **1. Reliance Jio** - It is a mobile handset company in general but actually it is a complete data ecosystem. - When you buy Reliance Jio connection along with their phones, then they provide you several Reliance Apps like Reliance Music, Savaan, etc. - If you have a Reliance connection, then Reliance knows your location, call details and duration, data consumption, search list of websites, etc. - So, Reliance has so much data about you that it can easily target any advertisement to you and influence your buying decision. - Suppose you have searched a particular product on the Amazon website on your Jio connection, then Reliance knows what product are you looking for and provide you advertisements related to it. #### **2.** [**Amazon.com**](http://amazon.com/) - Amazon.com is an online shopping company; but, actually, it is a data company. - If you buy a product on the Amazon website or search for a product, then you will start getting advertisements related to these products when you visit Facebook or any other website. - Similarly, you might have observed that the products at the home page of Amazon in your mobile or system are different from the products at the home page of Amazon of your family or friends mobile or system. - All this is because of data. When you make an account on Amazon and buy a product, then Amazon has your complete data including your location, your contact details, your product interests, your payment mode, etc. - Thus, Amazon is actually a data company. This is the reason because of which Amazon’s stock prices are high despite huge losses (Amazon makes money but it also has incurred many losses). - Amazon has entered the business of rentals by making Amazon Cloud, which is Amazon Web Services. - Today, various big companies are using Amazon Cloud, i.e. these companies run their different applications on Amazon Cloud, which means that Amazon Cloud has the data of these companies. So, if Amazon wants, it can stop your services anytime. This is the complete rental business. If you do not give rent to Amazon for one month, they will close your services that month. In such a case, your App is finished. - Thus, Amazon has complete data about these applications including their number of users, the time duration for which the application is running, the usage of applications, etc. #### **3. OYO Rooms** - People think that OYO Rooms is just an application to get hotel rooms. However, it is also a data company. - When you download the OYO App, your mobile number reached to their data. After that, your location, traveling place, amount of money you are spending on travelling, your hotel room details, your interests, etc. - All this data has made the value of OYO Rooms. - If you think that OYO Rooms get the billion dollars investment because it has bought so many hotels or it has made some model, this is not true. - OYO Rooms value is not decreasing despite the Coronavirus pandemic because it is a data business. - The value of a data business will not decline until the internet is not removed from the entire world, which will never happen, and the coming time will be the internet world. #### **4. Banks** - Whether it is a small or big bank, especially the big banks like ICICI, HDFC, etc. all are into the data business. - Though the fundamental valuation of a bank is done based on the money transaction they are doing, i.e. the amount of money they are lending and they are getting interested in it. - However, the banks nowadays, which are also called Fintech (Financial Technologies). There are several Fintech companies that have more valuation than banks like PayPal. - PayPal is a global company that started in the US and Mr. Elon Musk, a big entrepreneur, is its co-founder. The value of PayPal is more than the sum of the values of several small banks. - However, PayPal is not a bank; it is a Financial Technology company. This has opened the eyes of several banks. - Today, almost every bank including ICICI, HDFC, Standard Chartered, and even SBI has started online banking as well as their mobile applications and asks customers to do all the transactions via Apps. It is all about the business of data. - If you have the correct data from your customer, then you can predict the needs of your customers and can grow your business drastically. - Earlier, people go to astrologers to predict their future. However, today, any company whose app you are using knows everything about you. This is the business of data. #### **5. Hospitals and Path labs** - When you go to any hospital or pathology lab for the blood tests, then at the registration counter you need to give several details like your mobile number, address, payment details, blood group, diseases you have, etc. So, you have given all your information to this hospital or pathology lab. - Apart from telling about your health issues, these path labs and hospitals have a big data engine. This data can be easily used to predict that in a city, say Delhi, how many people will become diabetic. - If 1000 patients visit you every day for the blood tests and you are working for 30 days in a month, then in a month, 30,000 unique people are coming to you for the blood test. You have information about all these 30,000 people that which disease they had in the past and which disease they can have in the future. So, you can easily partner with an Insurance company and take advantage of this data. - However, due to this, various compliances have been passed like in European countries, the GDPR law or rule is enforced to maintain the privacy of your data and restricts any private company to misuse this data. - Despite this, the misuse of data continues like hacking of Facebook, Banks, etc. It also has various disadvantages. In the near future, the businesses which look themselves as data business will become big businesses. # **#2 How to look at your business as a data business?** Let us take some examples to understand this. #### **1. Saree Shop** - Suppose you have a saree shop. So, you know who your customers are and in which age category they fall. You can know about their interest while talking to them. - Also, you can ask them to fill up a feedback form wherein they need to mention their date of birth, marriage anniversary, etc. along with other details. This will help you to provide them discounts and offers on their special day. - Gradually, when you are able to get the complete profile of customers, then you can easily predict the buying pattern of your customers. - If you have 1000-5000 customers and out of them, 500 customers have their birthday today, then you can send them an automatic message and give them 20% discount and call them in your shop. This you can predict even 3 months because you have the data whose birthday is coming and what offer you should give to bring him to your shop. #### **2. Pathology Lab** - In Baroda, there is a Pathology Lab owner, whom Mr. Paritosh Sharma suggests that he can raise not only 1-2 crores funds but 100 crores funds because he has massive data. - He can use this data to predict the diseases people will be going to have in upcoming years. This is possible if he has a computerised tool. # **#3 Tools to convert your business into the data business** Whether you are into any business, you need to implement the following tools in your business to convert it into a data business: #### **1. CRM (Customer Relationship Management) tool** - It is a tool in which you feed the information about your customer. - You should employ a junior employee on the task to collect all the information about the customer and make a long and solid profile of the customer. - After that, hire a senior manager and deploy him/her on data analytics. The manager will help you to predict how much sales can be done in which month, what are the ways to increase sales, and what are the reasons for the decline in sales. - If you are able to predict this, you will get a huge power in your hands. #### **2. ERP (Enterprise Resource Planning)** - This tool is beneficial for every business and especially for manufacturing business. - Several small and big companies provide ERP tools like SalesForce, Zoho, etc. - You should take an ERP tool that solves the burning problem of your business. - In an ERP tool, you define all your business processes whether internal or external. - ERP will provide you information about your every business process on a daily basis at any time on your mobile app or laptop. **For example:** - Due to lockdown, schools are functioning online. So, they have connected all the parents through their ERP. - Today, schools have complete data of parents and students on their ERP app. So, they have a lot of information. Now, the school can use this data to make things better. If you have the data, then you will also have the responsibility because it is your customer data and you cannot misuse it. You should meet all the compliances related to data business. For this, you can hire a lawyer. The lawyer will explain you all the compliances so that the customer cannot file any case against you. #### **3. HTTPS** - It is a security to a protocol that you should buy to keep your customer data private and safe from hackers because if your customer data is lying on your website or app openly, then it can be easily hacked. In such a case, your company will get closed. - You should hire proper agencies to make your website or app so that they can provide your customers with a safe web interface. Data will help you to provide a world-class experience to your customers. As you know about the details and buying patterns of customers, so, you can give relevant products to your customers and save his/her time. All the businesses are doing the same and you should also start doing this to make your company grow 10 times.