Unless you've been safely ensconced in a media-free hideaway, you've probably heard of Nate Silver, the predictive phenom who writes the FiveThirtyEight blog for the New York Times. Controversy has flourished because of the now 86% odds he gives Obama for winning the presidential election.
A lot of people, including Times conservative columnist David Brooks and MSNBC personality and former politician Joe Scarborough, disliked Silver's air of certainty about what they think is an uncertain process, and said so loudly. Then, of course, came the defense of Silver in other parts of the media.
Put politics aside for the moment. There are some important lessons in this discussion for entrepreneurs who are interested in what you could call "big data." As in predicting elections, in running a business it's easy to follow the path of many partisans and pundits and make fundamental mistakes about how to add up the distribution of risk and spot legitimate opportunities.
Lesson # 1: Prejudice doesn't trump prediction.
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