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Mistakes That Cause Data-Driven Innovations to Fail

Chris Porteous
Chris Porteous

These seven mistakes can prevent your app's success.

The online marketplace is a very competitive space. A lot of innovation will simply fail before it has a chance to be noticed and adopted by the population. Gartner stated in 2014 that by 2018, less than 0.01% of apps developed for the marketplace will be considered successes by their developers. This seems like a nail in the coffin for those of us who want to innovate, but the problems that innovations face in the current tech space can be boiled down to a few salient points. 

1. Relying on external data

One of the most common mistakes app developers make is putting the majority of their stock into data provided by a third party. Third-party data services can be very helpful, but the downside is that the data they provide is available to just about anyone. In this case, the challenge of innovation comes from utilizing and presenting this data in a unique way so that users feel more inclined to use your platform over someone else's despite the same data being present in both.

Why do so many app developers succumb to this problem? Far too many of them believe that third-party data services can help them cut down on the costs of doing business, but they don't realize that cheap services provide shoddy results. Businesses may be reluctant to spend more on data, but the truth is that you get what you pay for when it comes to digital services.

2. Misunderstanding data as a product

Data has a tendency to be copied. A single digital asset can be copied multiple times over when the amount spent initially is simply the amount of a single purchase, despite hundreds of copies of the asset existing. This is a serious problem for some innovators, leading to a high risk of data breaches. But it is a problem that entrepreneurs and business innovators can deal with.

Data as an asset can keep producing value for the company of origin long after it has been sold. Facebook collects data and has said, according to CNN Business, that it uses this data to improve the accuracy of its own ads as well as to help identify fraudulent accounts. This is a good example of how data can keep working for a company long after it has left the company's possession.

3. Ignorance of Metcalfe's law

Techopedia defines Metcalfe's law as a method of representing the value of a particular network using the nodes within that network to calculate a relative strength. In layman's terms, the value of a network is equivalent to the square of the number of users on that network.

By understanding this, innovators can leverage this to promote their innovation. It serves as a useful tool to companies that leverage a lot of the network in their marketing campaigns, but also offers niche situations for smaller companies to get a hold and work outward.

4. Inability to suit a market

Probably the most significant problem innovators run into is building their applications to suit the needs of a target audience. Finding a problem that needs solving is key to success in this area. Once an innovator finds a niche that they can successfully publish a solution to, that application is likely to succeed. However, if the solution published isn't competitive, is derivative or doesn't seek to actually solve a problem, then the innovation will rightfully fail to make an impact.

5. Not building a user community

What sets good innovators apart from those who fail to make an impact is how they treat the fans of their innovation. Companies that focus on building a community will get far more out of their innovation than they would by simply throwing it out there. In the innovation space, "build it and they will come" is not the approach to take. Rather, your promotion should be supported by a community, with each stakeholder having input and an impact on the final product.

Many open-source programs go this route. Savvy developers and innovators understand that their community offers them an ideal way to test-run ambitious new products or services before rolling them out into the larger marketplace. Businesses that fail to solicit feedback from the community by offering open betas and collecting user responses to their experiences are dooming themselves to failure.

Sometimes, it can benefit innovators to make their community alluring to prospective new entrants. By demonstrating that the users in your community benefit from your products and services, and by illustrating to them that you care about their needs by collecting their opinions, you'll build bridges between yourself and a future consumer base that can propel you to greater profits.

6. Not finding a niche

All innovators who set the trends in a market have something in common: They found a niche they can successfully cater to, and they created a solution within that niche that is a lot better than the current alternatives or provides a previously unknown service to the market. Finding that niche is the best way to make an impactful innovation. Even so, keeping in mind the other information mentioned here is crucial to not falling prey to the very real threat of failure. Staying one step ahead of potential problems is a necessity for any developer.

How, then, should a business go about finding its niche? This is much easier said than done, as it requires a great deal of introspection and a willingness to confess your weaknesses. Something as simple as a SWOT analysis, however, can go a long way toward teaching you about your strengths and weaknesses. After you've ascertained your strengths as an innovator, you can focus on bolstering your weaknesses while simultaneously honing the skills you’re already great at.

7. Using low-quality data

Finally, most data-driven innovations fail in the business environment because too many entrepreneurs and data professionals rely on unclean, low-quality data that's cheap to attain and store. While cutting down on the costs of doing business by investing in cheap data sources can be a tantalizing option, you need to invest plenty of money into your data generation and maintenance regimes if you want them to pay off in the long run.

Don't content yourself with lazy data engineers and analysts who are happy with subpar data; opt for high-shelf workers who can determine which data is useful for your company and which information is best ignored. If you're tapping into the best data available to fuel your innovative potential, your ambitious new schemes are much more likely to succeed than those of your competitors who are saving money but losing out on quality when it comes to data.

Relying on only the best external data and producing your own high-quality data in-house is crucial to protect your innovations against failure. Remember that quality must be elevated above all else, and your data-driven business plan will be far more successful.

Image Credit: Undry/Shutterstock
Chris Porteous
Chris Porteous Member
I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge,, Forbes,, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.