01
Every decision is a prediction. Analytics makes it honest.
Under every choice (which lead to call, which offer to run) sits a forecast. Analytics swaps the gut version for one you can check. Then you compare the prediction with what happened, and update.
In practice: A model is only as honest as its data. A confident prediction on bad data is worse than a hunch you knew to doubt.
The Analytics Edge · MIT 15.071 · spring 2017 (Prof. Dimitris Bertsimas)
02
A model that only learns from itself overfits.
Overfitting is memorizing the quirks of a small sample, so the model fails on anything new. The cure is more data, and more varied data. One business is a sample of one market; a network of similar businesses is broader.
In practice: More data helps only if it’s relevant. Unrelated businesses add noise. The edge comes from many owners solving a similar problem.
Introduction to Machine Learning · MIT 6.036 · fall 2020 (Profs. Kaelbling & Lozano-Pérez)
03
Predict, then optimize. They are 2 steps, not one.
First predict what is likely. Then choose the best action within your limits. A forecast that never becomes a decision is just a dashboard. Most of the value is in the step that changes Monday.
In practice: The result is only as good as the goal you set. Optimize for booked calls and you may get cheap, unqualified ones.
The Analytics Edge · MIT 15.071 · spring 2017 (Prof. Dimitris Bertsimas)
04
Most of what customers say is text. A model can read it.
Replies, reviews and form notes are messy language, and intent hides there. Text analytics lets a model read, sort and rank every message by how likely it is to buy: the qualify step, done by machine.
In practice: A sarcastic “great” is easy to misread. Keep a person on edge cases, and treat the score as a ranking.
The Analytics Edge · MIT 15.071 · spring 2017 (Prof. Dimitris Bertsimas)
05
“Smarter model” claims rest on statistical inference.
Inference estimates the truth from limited, noisy data, and says how sure it is. It is why a model can be trusted at all. Support vector machines, boosting and Bayesian models draw that estimate in different ways.
In practice: A claim with no measure of doubt is a guess dressed as a fact. State how confident the model is, and on how much data.
Machine Learning · MIT 6.867 · fall 2006 (Prof. Tommi Jaakkola)