Monday, July 15, 2024

Data infrastructure 101: Why it matters to your startup

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Engineering leaders at software startups are required to wear multiple hats: setting the product vision, leading application development, scaling the engineering team and managing data infrastructure. 

But why does data infrastructure matter to your startup, why you should prioritise it and how do you build it out?

What is data infrastructure?

Data infrastructure serves as the technological framework of any businesses’ entire data landscape. It plays a pivotal role in a software company’s ability to use business levers like cloud computing and AI to disrupt a market.

It encompasses a suite of components essential for managing, processing and deriving insights from data — this can include databases for storing data, data streaming, visualisation and analysis tools for interpreting that data, or monitoring solutions for performance.

“A robust data infrastructure is really indispensable for unlocking meaningful insights, facilitating informed decision-making and sustaining essential business operations,” Andra Nuta, programme manager at Aiven (pictured above), an open source data platform that works with many fast-growing tech startups such as Wolt, Mirakl and Hookdeck, tells Sifted. 

Aiven launched its Cluster startup programme to offer early-stage businesses up to $100k in credits, valid for a year, to spend on its platform to help manage their data infrastructure.

Why is it important for startups?

For Nuta, a critical decision point for a startup CTO is determining the right time to transition from an MVP infrastructure (a data infrastructure which can handle a minimal amount of users/transactions), to a more scalable approach, which can drive more user adoption and revenue.

Implementing security measures and ensuring compliance with data protection regulations from the early stages helps build trust with customers and with investors, too

A paradox is, however, that provisioning services for an early product iteration on your cloud of choice (Amazon Web Services, Google Cloud and Microsoft Azure) is deceptively straightforward — which can encourage teams to avoid addressing scaling challenges that may lie ahead. 

Martin Sahlen is cofounder at Estonia-based operational data lineage platform Alvin and is part of the Cluster programme. 

“When [data infrastructure] works, you don’t think about it and you can focus on adding value versus fighting fires on technical, security or cost aspects,” says Sahlen. “There are so many things that are hard about building a startup, so anything you can do to simplify and avoid spending time on is very valuable.”

Nuta says for time-poor startup leaders, efficient resource allocation is a key benefit of a considered data infrastructure, as it streamlines data processes, reduces redundancies and minimises operational costs. 

For example, understanding consumer behaviour is essential for refining a product and satisfying customers — here, a good data infrastructure facilitates this collection and analysis of customer data, enabling startups to gain valuable insights and deliver personalised experiences which can, in turn, be a competitive advantage.

Security and compliance is another important factor, adds Nuta. 

“Many startups handle sensitive customer information. Implementing security measures and ensuring compliance with data protection regulations from the early stages helps build trust with customers and with investors, too,” she says. 

Why should you prioritise it?

Nuta says founders don’t want to reach a point in their growth where their data infrastructure isn’t built to scale, stopping them growing as fast as they would like.

“Implementing something that is scalable from day one will save you a lot more time in the future,” she says. “Going back and re-architecting something that maybe hasn’t been done with scale in mind from the beginning is a lot more costly, too, than actually doing it right and fit for scale from the beginning.”

Implementing something that is scalable from day one will save you a lot more time in the future

Matthew Huxtable, staff platform engineer at virtual hospital Doccla, a Cluster programme participant, agrees that investment in data infrastructure should be prioritised, noting the importance of consistency that is hard to achieve with a mishmash of different cloud platforms or data products.

“You’ve got technical constraints of it needing to be fast, have efficient storage and be protected,” says Huxtable. “We see an increasingly strict compliance regime — not just GDPR, but more and more around the privacy angle, with consumers expecting privacy as well and having more concern over where their data is going and is hosted.”

How can you build out your data infrastructure?

Huxtable says that engineering teams can add the most value to a startup when they’re coming up with unique strategies and approaches — not working on data infrastructure. Therefore a lot of startups choose to delegate data infrastructure management to a trusted vendor, such as Aiven. 

You will get a far more secure, reliable service knowing that you’ve got a company dedicated to running your backups, performing disaster recovery and securing the infrastructure

“Data infrastructure isn’t differentiated work, so there is no need to build your own tech data-storage platform,” he says. “You will get a far more secure, reliable service knowing that you’ve got a company dedicated to running your backups, performing disaster recovery and securing the infrastructure.”

Nuta says that with Aiven, engineers can swiftly set up and deploy their data infrastructure on any major cloud provider within minutes.

So, how should you start?

“Begin with a plan and an audit of what you already have and where you want to go — you may have a bunch of databases and different cloud providers,” advises Huxtable. 

“You might also want to get more out of your data infrastructure, like meeting a business goal or gaining better insights,” he adds. “This approach gives you the opportunity to then look for vendors that are able to align with your needs.”

Nuta also recommends seeking providers that offer a diverse range of services that can grow with you.

“The more benefits that you can get from one single vendor both early on and in the future, the more efficient you can be in the long run.”

If you are looking to build the data infrastructure for your startup, you can access up to $100k in credits to spend on the Aiven Platform over 12 months. Learn more about the programme here

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