Saturday, May 31, 2003

Concrete Data

by Asim Jalis

One of the things I learned in the consulting course is the importance of concrete data. I need to make sure I remember this insight. Concrete data can lead to insights inaccessible without concreteness. While data and statistical inference seems like a weak substitute for real understanding, I think I discount the importance of real concrete data too much. As I mentioned earlier, knowing how much it costs to send a piece of direct mail, or the cost per subscriber of advertising in a small circulation newsletter, all these things suggest business models and insights that are inaccessible without the numbers. In the end a business succeeds of fails because of numbers. Revenues must be greater than costs or the business fails. This seems like a naively one-dimensional criteria. But the fact is that this is how the world works. Numbers are like unit tests in some way. They ground ideas into reality. They provide a kind of grounding that Ne/Ni ideas frequently lack. Numbers have a logic of their own. Divided and multiplied with each other they can generate important insights. For example, it costs $5000 to have a booth at a 3-day trade show. This is meaningless data. The trade show is open for 8 hours every day. So what? A new person visits the booth every five minutes. This is all still pretty boring. But now take a look at this: Cost per visitor: $5000/(3*8*12) = $5000/3*96 = $5000/288 =~ $5000/300 = $50/3 =~ $16. Whoa! It costs $16 per visitor. So then it makes perfect sense to give every visitor a mug that costs $1.52. There is real insight somewhere in there. That calculation is extremely illuminating, much more than any of the individual numbers. The numbers leverage each other to produce something that did not exist before.