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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Data vs. Facts

Comments (12)

The notion of “data vs. facts” made its way into several conversations today.  I was at an interesting lunch today where we rolled around the in the idea of the different between them and then I had a call with an old friend on my way back to the office where he asked me a series of questions about my view of “fact based organizations” and decision making in startups.

I often say to people, “please recognize that I am just providing data – it’s up to you to decide what to do with it.”  I also love the quote “the plural of anecdote is not data.”  Without devolving into an analysis of the classic business school data -> information -> knowledge hierarchy, there can be a huge difference between data and facts, especially in an entrepreneurial context.

Entrepreneurs get data continually from all directions.  One of the greatest providers of data are VCs and board members.  A gigantic mistake that many entrepreneurs make is to interpret the data as facts.  Many VCs deliver data in a very self-unaware away – basically as assertions of truth (which I’ll call “facts” even though I know the definition can be murky.)  Unfortunately, the data that drives these facts are often invalid resulting in an invalid fact.  If the entrepreneur doesn’t view the fact as data, he will immediately build conclusions on a bad (fact free) foundation.  Blech.

Rather than train all the VCs in the world to deliver their data differently (and – more importantly – help them understand that data <> fact), it’s better for the entrepreneurs in the world to make sure they are sorting between data and fact correctly. 

This goes both ways (e.g. the VCs aren’t the only guilty ones here.)  As I drove home tonight, I pondered my end of day wrap up drink with an entrepreneur (who I really enjoy and respect) who spent the day with some of the TechStars companies.  I disagreed with some of the assertions he made about several of the companies he’d met with today and the data he delivered to them.  I expect he presented them very strongly (that’s his personality) and the entrepreneurs on the receiving end likely interpreted his assertions as fact, when they were only data.  Hopefully upon reflection (or maybe reading this blog post) they’ll realize he was merely giving them data.

They should also remember that the plural of anecdote is not data.  And – just to make it complicated, it might be the case that his data is fact, but you have to determine that for yourself.  Finally, please remember that this blog is merely data.

  • Dave

    I realize that you disclaimed careful definitions but this is just downright confusing.

    I think what you are saying is that VCs provide information – sometimes anecdotes, sometimes theories presented as facts, and sometimes summaries or syntheses of other data. Entrepreneurs should not treat this information as guaranteed correct or factual – they should look closer at the basis of the theories, understand the underlying data for a synthesis or summary, and in any case treat the information from their own perspective as a single data *point* in their own analysis, one that is subject to error, subjectivity, hidden agendas, etc. (but importantly, may also be a golden nugget!), and should then collect further data points on the same subject matter from other unrelated sources.

    In other words, that which someone else asserts as fact or knowledge is to the recipient of the assertion merely a single data point. Is that what you mean?

    • http://www.feld.com Brad Feld

      Correct.

      The post is also intended to be satirical. I made it purposefully confusing to underscore the point.

  • http://blog.jparkhill.com Jay Parkhill

    Good point, but Greg Lemond made it better many years ago in his book on bike racing. He would see young athletes mimic the training styles of their heroes and do badly, and summed it up by saying “what works for ___ is good because it works for ___. It doesn't mean it is necessarily good for you”.

  • http://ocvcblog.com Marc Averitt

    Brad,

    Thanks. Now I can simply point folks to your post rather than explain why I don't refer folks I said “no” to…especially those that I don't even know. Happy Thanksgiving,

    Marc

  • http://www.shmula.com Pete Abilla

    Brad — your analysis is pretty shallow. There is a long history of Data versus Fact — this, really, is a question about epistemology, reaching back to Socrates.

    More recently, however, Taiichi Ohno, the creator of the Toyota Production System adds a twist: being at the place of where value is added (genchi genbutsu and gemba) is experiencing the facts of the situation. Data, on the other hand, is a step removed from facts.

    Taiichi strongly advocated “being at the place”, not in some boardroom discussing charts and graphs, when being at the production floor with the people, machines, and processes — that is where the real story is.

    • http://www.feld.com Brad Feld

      Pete – I completely agree with both points: (a) that my analysis is shallow (it's intended to be sarcastic) and (b) being at the place is where it's at.

  • http://sawickipedia.com/blog Todd Sawicki

    Brad –

    I hope you remembered to say hi to that opinionated entrepreneur for me. Glad to see you're making him famous – at least anonymously ;)

    • http://intensedebate.com/people/bfeld bfeld

      Todd – I gave him your love.

    • http://www.feld.com Brad Feld

      Todd – I gave him your regards.

  • http://wink.com/profile/michaellewkowitz Michael Lewkowitz

    Great post Brad!

    I think what I often hear and probably put out is actually noise :-). Here's a good reference from a now passed mathematician that research org design and communication. I posted some of my highlights in reading on of his main books here: http://tinyurl.com/23v7yt

    - “Fact: that which is the case.”
    - “Noise: A meaningless jumble of signals.”
    - “Data: statements of fact.”
    - “Information: that which CHANGES us.”
    - “Data become information – when the fact in them is susceptible to action. How can I possibly know that I am informed? — Only because I have changed my state.”

    Cheers!

    Michael

  • http://wink.com/profile/michaellewkowitz Michael Lewkowitz

    Great post Brad!

    I think what I often hear and probably put out is actually noise :-). Here's a good reference from a now passed mathematician that research org design and communication. I posted some of my highlights in reading on of his main books here: http://tinyurl.com/23v7yt

    - "Fact: that which is the case."
    - "Noise: A meaningless jumble of signals."
    - "Data: statements of fact."
    - "Information: that which CHANGES us."
    - "Data become information – when the fact in them is susceptible to action. How can I possibly know that I am informed? — Only because I have changed my state."

    Cheers!

    Michael

  • http://wink.com/profile/michaellewkowitz Michael Lewkowitz

    Great post Brad!

    I think what I often hear and probably put out is actually noise :-). Here's a good reference from a now passed mathematician that research org design and communication. I posted some of my highlights in reading on of his main books here: http://tinyurl.com/23v7yt

    - "Fact: that which is the case."
    - "Noise: A meaningless jumble of signals."
    - "Data: statements of fact."
    - "Information: that which CHANGES us."
    - "Data become information – when the fact in them is susceptible to action. How can I possibly know that I am informed? — Only because I have changed my state."

    Cheers!

    Michael

  • http://wink.com/profile/michaellewkowitz Michael Lewkowitz

    Great post Brad!

    I think what I often hear and probably put out is actually noise :-). Here's a good reference from a now passed mathematician that research org design and communication. I posted some of my highlights in reading on of his main books here: http://tinyurl.com/23v7yt

    - “Fact: that which is the case.”
    - “Noise: A meaningless jumble of signals.”
    - “Data: statements of fact.”
    - “Information: that which CHANGES us.”
    - “Data become information – when the fact in them is susceptible to action. How can I possibly know that I am informed? — Only because I have changed my state.”

    Cheers!

    Michael

  • Scott Davis

    Funny, but true. And then there is the tension between Fact and Truth. I posted a couple of thoughts on this at http://circaspecting.typepad.com/circaspecting_mu

    Regards,
    Scott

  • Dave

    I realize that you disclaimed careful definitions but this is just downright confusing.

    I think what you are saying is that VCs provide information – sometimes anecdotes, sometimes theories presented as facts, and sometimes summaries or syntheses of other data. Entrepreneurs should not treat this information as guaranteed correct or factual – they should look closer at the basis of the theories, understand the underlying data for a synthesis or summary, and in any case treat the information from their own perspective as a single data *point* in their own analysis, one that is subject to error, subjectivity, hidden agendas, etc. (but importantly, may also be a golden nugget!), and should then collect further data points on the same subject matter from other unrelated sources.

    In other words, that which someone else asserts as fact or knowledge is to the recipient of the assertion merely a single data point. Is that what you mean?

  • http://intensedebate.com/people/scott_davis3674 scott_davis3674

    Funny, but true. And then there is the tension between Fact and Truth. I posted a couple of thoughts on this at http://circaspecting.typepad.com/circaspecting_mu

    Regards,
    Scott

  • http://intensedebate.com/people/bfeld bfeld

    Correct.

    The post is also intended to be satirical. I made it purposefully confusing to underscore the point.

  • http://intensedebate.com/people/bfeld bfeld

    Pete – I completely agree with both points: (a) that my analysis is shallow (it's intended to be sarcastic) and (b) being at the place is where it's at.

  • Todd Sawicki

    Brad –

    I hope you remembered to say hi to that opinionated entrepreneur for me. Glad to see you're making him famous – at least anonymously ;)

    • http://intensedebate.com/people/bfeld bfeld

      Todd – I gave him your love.

  • Marc Averitt

    Brad,

    Thanks. Now I can simply point folks to your post rather than explain why I don't refer folks I said "no" to…especially those that I don't even know. Happy Thanksgiving,

    Marc

  • http://intensedebate.com/people/jay_parkhil2393 jay_parkhil2393

    Good point, but Greg Lemond made it better many years ago in his book on bike racing. He would see young athletes mimic the training styles of their heroes and do badly, and summed it up by saying "what works for ___ is good because it works for ___. It doesn't mean it is necessarily good for you".

  • http://intensedebate.com/people/pete_abilla2397 pete_abilla2397

    Brad — your analysis is pretty shallow. There is a long history of Data versus Fact — this, really, is a question about epistemology, reaching back to Socrates.

    More recently, however, Taiichi Ohno, the creator of the Toyota Production System adds a twist: being at the place of where value is added (genchi genbutsu and gemba) is experiencing the facts of the situation. Data, on the other hand, is a step removed from facts.

    Taiichi strongly advocated "being at the place", not in some boardroom discussing charts and graphs, when being at the production floor with the people, machines, and processes — that is where the real story is.

  • http://intensedebate.com/people/bfeld bfeld

    Todd – I gave him your regards.

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