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The Forgotten Question

When you look at people trying to use big data and predictive algorithms to predict the right strategy, the success of start-up companies or of new products, ask a simple question: what are they not asking?

 

The Forgotten Question…

Many times people, smart people, simply forget about it. It’s not small, and it isn’t big either. It’s elusive. And that’s why oftentimes, it simply goes unnoticed.

What is it? Context.

To understand it in the simplest terms, let’s say you are going to your favorite coffee-shop in 4 different scenarios.

1). The time is 8:00 AM and you are on your way to work. You are probably by yourself. How long will you be willing to spend there? A few minutes. How much money are you going to spend? Around $4-$7 for a cup of coffee and a muffin.

2). Come noon time, you go back to the same coffee-shop. This time, you’re with a colleague. Now you’re getting a salad, a sandwich and a soft drink – spending $10-15. And you’re willing to stay there for 30-40 minutes.

3). Evening time, you decide to go back to that coffee-shop. Your spouse and another couple come along. You’re planning to have a nice evening out, say, a couple of hours – and spending about $50.

4). On Friday morning, you stop by after exercise or perhaps with your kids. You get a fruit energy shake or some ice cream milkshakes for the little ones.

In each of the 4 scenarios, the customer was the same (“You”) and the business was the same (“the coffee-shop”). But in each case, there were differences in the prices paid: the items bought, the duration of stay, and the amount and identity of people accompanying you.

Now suppose you had to create an algorithm that would be able to offer your special deals – how easy would it be to create?

This is context. It’s not quantum physics. It’s not beyond the grasp of most strategists and marketing people. It’s just elusive. We tend to forget that not only “who” is important, but that there are other questions.

And that coffee shop example? That’s probably one of the simplest cases of context out there.

If there was no issue of context, you could have copied Amazon website and logistics, and create a US$250 Billion company, right? You could copy Facebook and Whatsapp for a fraction of what those companies are worth. You could copy Google, couldn’t you?
Of course not.

Context is the setting. It is the background. It is the emotions and ideas prevalent before and after that product or service was introduced and changed everything we thought about a category.

Domino’s, Toyota, McDonald’s, Nintendo, AirBnB, Uber, Absolut, Starbucks, IKEA and many others became successful because they grew up in a specific economic, consumer and business environment. It’s a combination of numerous paradigms, filters through which millions of people see the “facts” of the world.  You have to take that into account and the only problem is that … you probably can’t take that into account. How can you give any value to a paradigm?

When you look at people trying to use big data and predictive algorithms to predict the right strategy, the success of start-up companies or of new products, ask a simple question: what are they not asking?

Hint: it’s usually related to context.

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