“It’s like saying, I gave Stacy a pen, therefore she’s a journalist,” said ZestFinance CEO Douglas Merrill at GigaOM’s Structure:Data conference this March. We’re not automatically great decision makers just because we have big data.
In fact, the hazards of relying strictly on data to make decisions have received a good amount of press, including a set of columns from David Brooks (see here, here, and here). He says that while data helps us keep tabs on our confidence, a worldview bounded by data won’t predict, for example, the customer trust a business might lose if it neglects a market—even if financial performance data puts the market at a lower priority. Out of context, data on the health risks of smoking might have us think we’ll quit—yet we don’t.
Arguments such as Brooks’s and Merrill’s have prompted a few rebuttals (here’s one good one), but entrepreneurs should heed their cautions, especially those exploring data-intensive business models. Here are a few human-centered activities any entrepreneur should allocate time toward when making decisions with data.