Signal to Noise Ratio

In a world where data is the new gold, it is not abnormal to go chasing data and seek to make every decision based on the data at hand. And to have it updated each second. Data is a useful and wonderful guide provided you have enough of it and over a long enough duration.

All information is not good information. When information arrives at very short intervals, it does not accommodate the entire trend or how things play out. Take for instance if you have to decide whether to carry an umbrella or not. You look at the condition outside maybe check the horizon, take another look an hour later and decide what to do. 

If you were to be supplied information about the cloud to clear sky ratio every 10 seconds, would it make for a great decision? When you have a lot of data coming and the time scale of the data coming in is too short, the signal to noise ratio increases significantly. 

It is the same reason following the presidential impeachment hour to hour is useless. 

You need to get on top of discernible trends as a founder. Don’t fall into the trap of data, just because there are updates available each second – even for your own business. Identify the currents that are carrying you.






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