I think that's basically my reaction. The big investments in data - without knowing exactly what it's for - are easy to spiral into needing tons of things. It's like the xkcd comic about regular expressions: You have one problem and you want to solve it with modern data tools; now you have ten problems. https://xkcd.com/1171/
Regarding the Heat example: I would be bullish in that I think this sort of investment would help them win more games. But I might be bearish in that I’d literally bet against them if the betting market moved “too much” towards favoring them - in terms of the number of wins expected for the season, or championship odds, or whatever else you can bet on.
Which is perhaps what I'd say about data investments too, actually - feels like the JPM one could make a marginal difference, but I wouldn't bet on it being transformative or anything.
If they are making an announcement about it I am out. And with the $ they claim they are going to spend, no matter what happens, they will claim it is a success no matter what happens. If they started small, I would probably be more on board.
That actually seems like a pretty good heuristic. I have this thesis on AI startups that, if they say they're a CRM, or a BI tool, or some other X, "with AI," it's a red flag. But if they're just a better CRM, and they market how they're better rather that the AI itself, then it might be real. It feels like this is somewhat analogous, where if make a show about using data, it's a red flag.
The argument breaks b/c of Branding - not because of the motive.
Replace JPMorgan with Microsoft, Data Investment with OpenAI, and Jammie with Satya.
And suddenly this search for promise / hope in data is not such a bad investment.
I think the issue here is more about the amount and corporate branding. 12B is too big of a sum for innovation - everyone understands this and immediately red flags it. If the announcement said the investment is going to be $500M, in partnership with leading Silicon Valley VCs - WS analysts might react differently.
I have no idea about the analyst reactions, though I don't think the point is necessarily about innovation. Just plain old "let's execute better with some databases and stuff" would be good enough for me.
Plus, the specifics don't really matter that much to me here. It's more the big picture question: For all we talk about the need for organizations to invest in data, when they actually do it, would we risk our own money to bet that it works out well?
I suspect that specifics is actually what we all care about.
The reason why we all negatively react to "some database stuff" is because we associate it with wishful thinking.
The reason why Microsoft/OpenAI gets a different reaction is because it is Specific about potentially transformative change.
The point is that it is not enough to say AI, data, or any of the other buzzwords. People want specifics. And your example about the sports team actually illustrates an example that has more specifics. Another illustrative example would be: JPM saying they are investing 12B into a data-driven marketplace that matches investors with small businesses. I suspect, this would get a different reaction.
I meant I don't care about the specifics of the organization, the tools they buy, and all of that. Yeah, as I said, if they have specific goals, I think that makes a big difference.
These are two different questions. The JPM question is purely one of money - will the $12B be returned with upside? The Miami Heat question is one of championships - to hell with money, will they win more games? To bet against data at JPM is to question whether they can run their business $12B better with more investment in data (a fair question) while to bet against the Heat is to assume they'll somehow play worse with more data (seems unlikely).
If you ask the question of will the Heat make more money by making this investment, now it's a very different take.
I get that, but I think your reaction gets at exactly the odd thing I'm trying to capture. There have historically been lots of NBA commentators (or commentators of any other sports league) that would very much disagree with the idea data is unlikely to make you worse. There are plenty of people who say the numbers don't understand the psychology of the game, what goes on in players' and coaches' heads, and so on. And yet, despite that, our gut reaction is that it seems unlikely that data can hurt.
I don't think the same is true for companies investing in data initiatives. Even if you put aside the question of cost - will JPM's revenue go up materially because of this investment? - I'd be more skeptical of that than the of the Heat.
Fair. I chalk that sort of talk up to FUD from people who don't understand data and would be interested to see if there is any proof to substantiate those claims.
I think your bigger point about having clear outcomes in mind (and better still, clear plans of how to get those outcomes) before making an investment still holds and not just for data investments. Data investments just have the special properties of sounding cool and often being poorly understood so people sometimes accept a lower level of evidence before putting money on the table.
Yeah, I think this a big part of it. It became a thing that people felt was "table stakes" because everyone else was doing it, but there wasn't much diligence about what those investments were buying. It was an arms race for blanks.
"data" is too broad of a term. I think when JPM talks "data", they actually mean "applications" - as an new products, new software. They don't actually mean "analytics". But the fact that this is not communicated well, is actually problematic :)
Digital transformation with uncertain goals always seems to me like focus on the process rather than focus on the end result.
How much of the modern data stack do we really need to get value out of our data?
I think that's basically my reaction. The big investments in data - without knowing exactly what it's for - are easy to spiral into needing tons of things. It's like the xkcd comic about regular expressions: You have one problem and you want to solve it with modern data tools; now you have ten problems. https://xkcd.com/1171/
Regarding the Heat example: I would be bullish in that I think this sort of investment would help them win more games. But I might be bearish in that I’d literally bet against them if the betting market moved “too much” towards favoring them - in terms of the number of wins expected for the season, or championship odds, or whatever else you can bet on.
Which is perhaps what I'd say about data investments too, actually - feels like the JPM one could make a marginal difference, but I wouldn't bet on it being transformative or anything.
If they are making an announcement about it I am out. And with the $ they claim they are going to spend, no matter what happens, they will claim it is a success no matter what happens. If they started small, I would probably be more on board.
That actually seems like a pretty good heuristic. I have this thesis on AI startups that, if they say they're a CRM, or a BI tool, or some other X, "with AI," it's a red flag. But if they're just a better CRM, and they market how they're better rather that the AI itself, then it might be real. It feels like this is somewhat analogous, where if make a show about using data, it's a red flag.
Nailed it!
NickE Likey!
The argument breaks b/c of Branding - not because of the motive.
Replace JPMorgan with Microsoft, Data Investment with OpenAI, and Jammie with Satya.
And suddenly this search for promise / hope in data is not such a bad investment.
I think the issue here is more about the amount and corporate branding. 12B is too big of a sum for innovation - everyone understands this and immediately red flags it. If the announcement said the investment is going to be $500M, in partnership with leading Silicon Valley VCs - WS analysts might react differently.
I have no idea about the analyst reactions, though I don't think the point is necessarily about innovation. Just plain old "let's execute better with some databases and stuff" would be good enough for me.
Plus, the specifics don't really matter that much to me here. It's more the big picture question: For all we talk about the need for organizations to invest in data, when they actually do it, would we risk our own money to bet that it works out well?
I suspect that specifics is actually what we all care about.
The reason why we all negatively react to "some database stuff" is because we associate it with wishful thinking.
The reason why Microsoft/OpenAI gets a different reaction is because it is Specific about potentially transformative change.
The point is that it is not enough to say AI, data, or any of the other buzzwords. People want specifics. And your example about the sports team actually illustrates an example that has more specifics. Another illustrative example would be: JPM saying they are investing 12B into a data-driven marketplace that matches investors with small businesses. I suspect, this would get a different reaction.
I meant I don't care about the specifics of the organization, the tools they buy, and all of that. Yeah, as I said, if they have specific goals, I think that makes a big difference.
These are two different questions. The JPM question is purely one of money - will the $12B be returned with upside? The Miami Heat question is one of championships - to hell with money, will they win more games? To bet against data at JPM is to question whether they can run their business $12B better with more investment in data (a fair question) while to bet against the Heat is to assume they'll somehow play worse with more data (seems unlikely).
If you ask the question of will the Heat make more money by making this investment, now it's a very different take.
I get that, but I think your reaction gets at exactly the odd thing I'm trying to capture. There have historically been lots of NBA commentators (or commentators of any other sports league) that would very much disagree with the idea data is unlikely to make you worse. There are plenty of people who say the numbers don't understand the psychology of the game, what goes on in players' and coaches' heads, and so on. And yet, despite that, our gut reaction is that it seems unlikely that data can hurt.
I don't think the same is true for companies investing in data initiatives. Even if you put aside the question of cost - will JPM's revenue go up materially because of this investment? - I'd be more skeptical of that than the of the Heat.
Fair. I chalk that sort of talk up to FUD from people who don't understand data and would be interested to see if there is any proof to substantiate those claims.
I think your bigger point about having clear outcomes in mind (and better still, clear plans of how to get those outcomes) before making an investment still holds and not just for data investments. Data investments just have the special properties of sounding cool and often being poorly understood so people sometimes accept a lower level of evidence before putting money on the table.
Yeah, I think this a big part of it. It became a thing that people felt was "table stakes" because everyone else was doing it, but there wasn't much diligence about what those investments were buying. It was an arms race for blanks.
"data" is too broad of a term. I think when JPM talks "data", they actually mean "applications" - as an new products, new software. They don't actually mean "analytics". But the fact that this is not communicated well, is actually problematic :)
Yeah, they mean a very wide range of things. It's meant to be an illustrative example though; I don't care that much about exactly what JPM does.
Here I was just about to start playing fantasy baseball again
Fantasy baseball is for men who are good at starting projects and bad at finishing them.