Data. The word alone is enough to stir up some sort of reaction. Regardless, we can’t live without it. It drives our economies, our political systems, our societies. Indeed, the field of data collection and analysis shows no signs of slowing down.
However, with its rise comes a number of obstacles that have the ability to impact businesses, governments, and NGOs; these concerns are especially relevant to SMEs who are in their fundraising period, or are putting together a business plan.
So what are some of the current issues in data collection and data extraction; what do they mean for entrepreneurs and SMEs, particularly those in emerging markets; and what solution does AlliedCrowds provide?
Challenges in Data Collection
Data quality. The larger the dataset, the more susceptible it is to low-quality data. This includes:
Noisy data: data with large amounts of additional, useless information: As an example, suppose I am a social entrepreneur seeking data from an NGO on the number of Syrian refugees in Amman. However, when I receive this data, it is for the total number of refugees across the Arab world. Whilst this data may be important, it is meaningless to me, as I have a specific focus.
Poor representation in data sampling, which increases the likelihood of sampling errors: Let us assume that I want to conduct a study on the average return on investment (ROI) for cryptocurrencies. I reach out to 100,000 crypto traders, but only get responses from 20,000 — this group reports an average ROI of 65%. From this data, I conclude that gains for cryptocurrency securities are particularly strong. What I don’t realize is that the 80,000 traders experienced average losses of 40%. Therefore my data is unreliable.
Expensive to manage. The cost of tools such as database management systems and data mining software can effectively price out developing countries. This creates information asymmetry, and entrepreneurs in these environments are forced to make do with low-quality data that affects their ability to seek funding, the quality of business plans, and other factors that will negatively impact their success.
The Effect on Entrepreneurs and SMEs
Where does one begin? Due to the presence of infrastructural voids, knowing where to start looking for data is a challenge in itself. Even if one does know, having access to reliable resources that accommodate data needs is an obstacle. For instance, good internet speed is paramount to ensuring that data needs are met in an efficient manner.
However, according to content delivery network Akamai Technologies, the highest average internet bandwidth speeds in sub-Saharan Africa are in Kenya (12.2 Mbps), South Africa (6.7 Mbps), Morocco (5.2Mbps), Nigeria, (3.9Mbps), and Namibia (2.9 Mbps). This significantly affects the ability of entrepreneurs and SMEs to compete with those located in Norway (23.5 Mbps) and Sweden (22.5 Mbps), countries with the highest average internet bandwidth speeds.
Cost factors: Storage costs have certainly come a long way since the 1960s, when the price of 1GB of data was over $1 million. Today that price is around $0.02; however, storage costs can be prohibitively expensive. Cloud storage company Nasuni lists the average cost to store 1TB (1000GB) of file data is $3,351 per year.
For local backup, hardware, and replication to another site, the price is $4,000, and since it is typical for companies to hold three copies of data, the price can be as much as $17,872 per TB ($17.87 per GB). In Nigeria, where GNI per capita is $2,080, or in Kenya, where GNI per capita is $1,440, such costs are prohibitive for most SMEs.
Without access to quality data, the standard of business plans, pitches, and financial statements that entrepreneurs produce suffers. For instance, when carrying out market research into potential target audiences, poor representation in data sampling will skew an entrepreneur’s findings. So will the lack of older or comparable data.
So we see how these difficulties create serious wide-reaching implications for entrepreneurs and SMEs. Indeed, the number of inaccuracies that may be present in large datasets can stifle significant investment in research and development, especially when one considers the costs involved. Entrepreneurs therefore need access to an economical resource that provides accurate, easily-accessible data that meets their needs.
Where does AlliedCrowds come in?
The Capital Finder tool is an interactive database that is like no other in the development space. It has been built to address an information gap for SMEs, and takes into consideration the challenges outlined above.
We start by using our proprietary web scraper to gather relevant data from hundreds of thousands of web sites. This data is then stored in the cloud for safekeeping and accessibility. Next, and importantly, the data is cleaned, and then trained, tested, and validated to ensure its reliability. This process saves our clients considerable time and resources, allowing them to focus on growing their businesses.
Entrepreneurs are given free access to over 7,000 capital providers that invest in emerging markets. and have the ability to generate custom reports on these providers in an easily shareable format. We are constantly working to ensure our data is as accurate, complete and up-to-date as possible.
Importantly, our database does not require fast internet bandwidth speeds. Many of our clients operate in conditions with limited or unreliable internet access, and so we build our database mobile-first. This has the added benefit of reducing data consumption costs.
Other great features include the keyword / phrase searching capability, which allows users to enter terms like “agri-tech” or “software development”, and will run a bespoke matching algorithm to identify the capital providers most relevant to your needs.
This allows entrepreneurs to research the investment ecosystems across developing countries, both for the purpose of market research, and to identify potential funders for their business. The Capital Finder database is reliable, easy to access, and not bandwidth-heavy, making it a perfect solution for entrepreneurs in emerging markets.
This article was written by David Alfred-Olufeyimi.
Image: “VIP tour to the innovation hub (the iHub), Nairobi, Kenya” is licensed by ITU Pictures CC BY 2.0