The Netflix Data War

simplystatistics.org

This excerpt is solid gold:

in almost any decision-making situation involving data, there is some non-zero percentage of the process that involves “gut”. The reason is because not all information about a process can be incorporated into a data analysis, and it’s important for data analysts to realize that.

This is something that is rarely discussed! I have run into a fair number of people who have very limited capacity to make good strategic decisions on gut. These people instead attempt to answer all such questions via some quantitative process. This is a mistake.

For strategic decisions, modern data analytics can only provide inputs to an ultimate human decision maker who must then incorporate other information sources. We colloquially call the human part of the process "gut", but what's actually happening is that:

  1. The human brain has a more sophisticated neural net than we yet know how to build.
  2. We offload data processing to computers when we know how to effectively do so for a given problem domain.
  3. We re-incorporate all externally processed data into our mental model and make a final decision.

In this view, "gut" is a bit like ensembling. You shouldn't see it as a problem unless you're actively working on building AGI.

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