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With All the Hype of Big Data, Are We Forgetting About Small Data?

March 1, 2016

The whole world is talking about Big Data; It’s the new oil, we are in the midst of a big data revolution, it is the new competitive advantage of business etc. But with the focus being on big data, we are leaving small data in the dust, and this is not a good thing to forget about. So, why is small data so important?

Author of the book “Small Data,” Martin Lindstrom puts it perfectly; big data is about finding correlations, but small data is about finding causation. For example, yo may find that customers are no longer enjoying your product, and are making complaints about it online. But small data helps you determine the reasoning behind this. Maybe it has little to do with the product, but rather that they are not receiving the product at the promised time.

If you are before you mine big data, you first should come up with a hypothesis to test for. Small data allows you to come up with this hypothesis. Without this, big data analyzation simply yields (what are sometimes insignificant) observations you make about people’s behaviors.

If this is still difficult to comprehend, think about it in this context. Let’s imagine you are a beverage company that is interested in consumer data. You want to analyze big data, so you look at the data of the entire fridge. You get a picture of my entire refrigerator. You see that I have orange juice, and salad. You see that I have cookie dough and leftover pizza. And there it is, you see I have a few bottles of Coke. It’s (i suppose) good to know that I am drinking your competition’s product, but what do you do with that information? What actionable insight do you gain from this? Small data on the other hand, helps you discover that yes I drink Coke, but its tucked away, in the back of a bin because I feel guilty about my soda drinking habit. My friends and loved ones have been telling me for years to stop drinking it daily. So, I keep it hidden where no one can see it, exposing my guilt. Knowing this information, you may want to target me with healthier alternatives to soda.

Read more about small versus big data here.

You also cannot get too caught up in all the hype of big data because it can disconnect you from your customer. Data analyzation can bring you closer to your customers, and improve customer service and improve customer satisfaction, but if you begin to view your customers as numbers and data points, rather than as people, it has gone too far.

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