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Want Success in the Gig Economy? Get Data.

Contingent workers—or freelancers—now make up an impressive 34 percent of the American workforce, which has created the gig economy. Competition between the companies operating based on the gig economy is undoubtedly tightening, and companies are fighting to stay relevant.

Even with an influx of job-seeking, freelance talent, survival for companies that have a business model based on the gig economy is far from guaranteed. Given current market conditions, business leaders must determine how to maintain relevancy in such a crowded and unpredictable space.

The answer to this challenge is data. Companies that appropriately leverage data to make smart business decisions will be well on their way to ensuring continued success.

Take the Data into Your Own Hands

The gig economy is largely built on the notion of sharing—but when it comes to data, sharing isn’t always caring. Instead, sharing data could mean falling victim to fierce competitive forces.  

For example, Uber, faced with profit loss and growing competition, announced its decision to invest in proprietary data for its internal mapping program. Currently, Uber relies on a mix of mapping data, including data from Google, to guide its drivers. However, with both Uber and Google rumored to be developing driverless cars, Uber made the smart decision to invest in its own proprietary data to not only fuel its new inventions, but to maintain its competitive edge.

Your Employees Are Your Company—Choose Wisely

Data is now at the heart of any company, in any industry, and data scientists or self-taught “citizen data scientists” must be valued employees who are trusted to guide both tactical recommendations and business decisions. Smart startup leaders will hire talent that can analyze data sets and convert them into actionable insights. You need people who both understand the data, and can succinctly explain to others what the data means, leading to smart, informed business decisions.

Success is Never Guaranteed—Plan Accordingly

To help ensure continued growth and success, startup leaders must rely on data to drive strategic decision-making.

Take Airbnb, for example. In the company’s early days, Airbnb data scientists found that their simple search was not resulting in the number of bookings they needed to be successful. Upon analyzing a data set comprised of host and guest interactions, the team decided to implement a search model that presented customers with more personalized results, leading to better customer experiences and more bookings.

Without this data analysis that improve their business model, Airbnb may have never reached a valuation of more than $25 billion dollars.

Data is King

The gig economy isn’t slowing down—in fact, it’s far from reaching its saturation point. To rise above the noise, companies based on the gig economy must continue to evolve their services to meet changing consumer demands. No matter the atmosphere, gig economy startups have the potential to succeed, but only those who rely on data will realize their full potential. 

Written by

Caitlin Ridge
December 7, 2016