Data Won’t Solve Your Problems

Here’s an article about how companies fail to put “big data” – the reams and reams of information he accumulate – to good use. It starts off with a really good story about a failure of the airline industry and one of their frequent fliers.

There’s No Such Thing As Big Data

Go read that, then come back.

This is the dilemma:

And this was his point about big data: that given how much traditional companies put it to work, it might as well not exist. Companies have countless ways they might use the treasure troves of data they have on us. Yet all of this data lies buried, sitting in silos. It seldom sees the light of day.

When a company does put data to use, it’s usually a disruptive startup. Zappos and customer service. Amazon and retailing. Craigslist and classified ads. Zillow and house purchases. LinkedIn and recruiting. eBay and payments. Ryanair and air travel. One by one, industry incumbents are withering under the harsh light of data.

Fewer and fewer problems these days are technical. We have the data, and we even have the power to slice-and-dice it a million different ways. Never before have we been able to accumulate, manage, and analyze data to a greater depth than we can today.

Here’s the problem: we don’t know what questions to ask of our data, nor what to do when he get an answer.

An example – I’ve had always had some background unease with Google Analytics. I kept thinking that I didn’t use it as much as I should, or to as great of a depth as someone in my position should use it. So, one weekend, I got a couple of books and launched into it.

I discovered that it’s pretty straightforward – there’s really not a lot to it. I was slicing-and-dicing data all over the place…but I still didn’t feel quite right. I still didn’t feel like I knew what I was doing.

And then I figured it out: I didn’t know what problem I was trying to solve. I didn’t know what questions to ask of the data. Furthermore, once I got an answer, I didn’t know what the hell to do about it.

The problem wasn’t the data nor my ability to analyze it. The problem was not knowing how the data related to the real world. You can have all the data in the world, but unless you have a well-defined real-world problem (“My traffic has fallen off over the last few months”), and know how that data relates to this problem, you’re really no better off than you were before.

Furthermore, once you understand the right question to ask, and get an answer and find out that Google has stopped sending you traffic for some reason, what do you do about it?

Data is only data, it’s not strategy. And this is why data won’t solve your problems. To use data to solve a problem, you have to do two other things:

1. Ask the right questions.
2. Formulate a strategy based on the answer.

Sadly, those are the hard parts.