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.