Data is like fire. It is a great servant and a terrible master. As many are celebrating data-based decision-making, I want to remind myself and everyone else that many bad decisions are made because of data misuse.
There are 2 main reasons for my argument.
- First. Data is like statistics. They are subject to individual interpretation.
- Too many people make flawed decisions just because they take data at surface value. This is what I called incomplete data and is worse than making decisions without data at all.
- For example, “Feature phone is 60% of the Philippines market, so the conclusion is to make more feature phones!”. All is well until they realized everyone is upgrading to smartphone… which is available upon further digging.
- On the other hand, someone might first decide on something and choose the data selectively to back up his point while ignoring the rest. This resulted in an incomplete view, hence a skewed decision.
- Hence, peel off data like an onion at least 3 layers (ask why, why and why), or at least analyze with 3 different dimensions to understand the actual situation.
- For example, when I was doing market entry analysis, I will analyze brands/ models/ features market share, pricing vs. brands/ models vs. features, and scout out all the relevant news. With that, I can understand the underlying reasons and make better decisions.
- Second. Market data does not figure in market disruption. And successful product happens because it disrupted the market.
- Market data is publicly available, as long as you paid for it or ask it from a “friend”. And if you can conclude the market trend from it, so could your competitors. And it is really likely you guys are making the same conclusion!
- Hence your product decision will not be smarter than your competitors, if you based solely on market data, since you guys basically even it out.
- However, market data, from an analyst, could always form the baseline.
- Because disruption usually doesn’t happen across all, but started from a point and then spread across.
- Hence, I will use the data as a baseline, and decided what I want to disrupt using fact-based prediction, which might be inconsistent with the data or trend.
- Another interesting fact is, if you are the dominant player, the market data is actually guessing what you are doing. So its accuracy depends on how close you are following the data!
Photo courtesy of thegoldguys.blogspot.com, used under Creative Commons license