Many startups find it nearly impossible to find their ideal business intelligence tool. While one may provide baseline analytics that gives a good overall snapshot of their business, it may lack the ability to track specific user behavior, or it doesn’t have the detailed analytics for their particular industry. So what’s the best option for a startup looking to get granular and track the specific metrics they need to grow their business? It’s time to get personal and build a custom solution.
The benefits of building a custom analytics tool
Adam Schwartz, co-founder and COO of TeePublic, puts it best when he says, “Relying on a third party to give you that data is equivalent to relying on a third party for understanding your business better than you do. I would advocate that everyone build their own custom reporting system because building a foundational layer of data is as important as anything you'll do in the early stage. I don’t think any of the enterprise analytics software provide a lot of value. We are very data-driven in our decision-making, and I don’t think those enterprise solutions gets to the bottom of what you need to know.” Schwartz has worked his way through many BI tools. He notes that Mixpanel and Kissmetrics are useful to early-stage companies and, as you grow, HubSpot is a little better “because it's a larger integration with your site as a whole, so it's possible to get down to the more individual lifetime value of very specific subsets--but it takes a lot of work to get to that point. And even then, the results you get are in a box that Hubspot has created. It's like doing all of that development work on someone else's platform. It’s better to just build an internal system.”
The frustration of not receiving exactly what you need from the out-of-the-box BI solutions, in addition to the expense of those solutions as your business grows, is felt throughout the Stacklist community; nearly 20% of our users have built their own custom analytics tools. Zohar Babin of Kaltura states, “We use Salesforce, Google Analytics, Totango and our own custom systems. Each tool has its own benefits, but I'd love to find a tool that can do it all and just understand my bottom line. None of them does that, which is why we also have lots of homegrown solutions.”
It should be noted that startups that choose to build their own custom solutions tend to use those in conjunction with established analytics tools, and find that the combination gives them a more comprehensive BI experience and valuable insights into their key performance indicators. Jessica Lessin, founder of The Information, tell us that they use Mixpanel, in addition to their own custom tool: “You can really go deep with Mixpanel, but it can’t handle all of the data that’s unique to our product. There's some data that's very unique to our product, like how many subscriptions a particular story drove. For those data points, it was easier to build a custom analytics platform.”
Should you build your own BI/analytics tool?
When deciding whether it’s better to build your own BI platform or embed an existing tool into your application, consider the following:
How much control do you want over your BI? Are you looking only for the data you need, and nothing else?
How important is it to you to maintain a consistent look and feel across your organization, without having to launch a third-party application for added functionality?
Have you identified BI tools that support the functionality you need?
Will it be quicker to build your own tool than to integrate a commercial BI tool within your application? Remember, even once you set up an out-of-the-box tool, it’s still necessary to put in work upfront to get the results you’re looking for.
Consider cost, and recognize that as you scale your business, BI and analytics tools can become quite pricy.
Do you have the time and resources to devote to building and maintaining an effective BI platform?
If you’re not sure whether building a custom BI platform is the right move for your startup, click here to find information on the best BI tools for startups of all sizes.