Importance of Statistics
August 6th, 2007 by Jeff Kee| - Related Posts - |
I used to be a junky (well, still am) for logics, figures, and statistics. I was damn talented at those things too (I scored the 78th highest score in all of Canada once for one of those really advanced math competitions), and I still like researching them. I strongly believe that a good understanding of statistics can help you with your business a lot - in both businesses online and offline.
Now, I must admit I’m still better at the offline stuff than online stuff. I know you’re going “What??? You’re a web developer!” Truth be told, I’ve never had a successful online-based business, but my offline based business is where I’m really growing. Although I do build some nice websites and some complicated coding projects, that really is not considered online business, but rather, a business that involves doing stuff online.
Recently I’ve been getting into a lot of marketing, demographic research, figure research, etc., and I’ve found that keeping a good tab of the market trends, stats, etc., is a very good way to power your business. It may sound obvious, but I’ll come up with some examples.
- One of my big clients and I were devising methods to sell Costa Rican real estate in Canada. To set the feasible price range, quality of the homes to be built, we used a lot of details on the average wealth of the Canadian Baby Boomers, as well as the 25-year projected Canadian population pyramid, along with the average cost of labour in Costa Rica. These figures gave us a very good idea of the optimal price range to maximize profits and make the process quicker, not to mention it gave us an idea of how feasible the whole idea is. I’m not disclosing detailed figures, obviously
- On another occasion, we used details of the unemployment rate and education rate of a specific foreign country (not Costa Rica this time) to determine how feasible it is to get quality workers in from that country to Canada.
- I look at my Google Analytics, and I look at how the traffic fluctuates depending on the type of posts I’m writing, as well as how many links I’m generating, and also on how many comments I get. There’s always connections, and learning them is the key to understanding it.
- I always read up on financial news, and it’s always fun to keep a track of the currency exchange rate, TSX, etc. It’s all an experience to read up on these things. It’s not only for your personal Mutual Funds/Stocks, but also for a better understanding of things. This also gives you a good idea of what mutual funds to invest in. I switched over a lot of my funds from equity funds to precious metals funds and I’ve seen some successes with it. Not that I have much in investment, hence it doesn’t make much of a difference, but it’s still fun to know I made a few more percentage in gain by reading up!
I’m not undermining the strength of your gut and your instincts - I often trust them as well. But well-informed decisions based on solid statistics and facts cannot go wrong either, and if you use both of them well, you’ll gain a lot more!
RSS ME!!!
I think while most of the time I can trust my gut instinct with regards to which posts are getting the most attention, I like to “double-check” my Analytics to have solid proof. I can’t say I would win any math awards (besides quick draw of the calculator) but it would be silly to ignore statistics. The one thing to always remember though is that statistics can be distorted by those presenting those statistics.
One of the most distorted pieces of stats I saw was the gas price breakdown pie chart.
Basically it breaks down the cost of gas to crude costs, refining/marketing costs, taxes, and profit. It says profit is only 3%… what a lot of crap..!!!
Basically the gas companies often have a hand in both crude extraction and refining, as well as their in-house marketing, so a lot of money stays within that circle. Also, the tax they pay is being used to fund gas developments and the industry to quite a degree.
Well, it is obvious that you are one of the few people that actually thinks about what you are doing before you do it- you have what is called an “unfair advantage” in the business world- having a brain and actually using it- So many CEOs are simply chair-polishers that are counting the minutes to retirement so they can lounge on the beach with their mistresses- do us all a favor: take over the business world and can these bastards. They need to do some time on the unemployment line.
haha thank you for your generous compliments… I’m still young and not THAT great but hopefully I will one day become a capable business leader who can lead big ventures.
Jeff, we miss you on Davids blog. You don’t visit anymore?
Oh, I’ll keep visiting JUST for you Joan..