Data vs. Stories

People love to talk about data now. Frankly, they should. Data can be powerful. It can create insight, it can also be misleading. Perhaps more importantly, data isn't always powerful. But stories. Stories can be powerful.

Don't get me wrong - Data can indeed be powerful. Lots of my customers want more data about their sales team. Which deals are going to close. Who's driving the right amount of activity. Which prospects are engaged. Where can we expect to finish for the quarter. Answers to these questions are powerful. That makes Clari powerful.

Data can also be misleading. Fooled by Randomness does a great job of articulating this. Take the stock market. Lots of really smart people work really hard to invest in stocks and make money for themselves and their clients. Some win. Most lose. But the existence of winners doesn't mean this year's winners will always win. But we do know that *someone* will always win. That means it could be random. Plenty of data suggests that (most) stock picking winners are random. That's why I don't pick stocks - I invest in mutual funds. More specifically, I bet on the broad swaths of the economy (i.e. S&P 500 Index funds), not on Apple stock.

Often times data isn't powerful. Who do you want to marry? How do I want to raise my kids? What is so exciting about founding a company? These are just a few examples of places where data isn't nearly as powerful. But stories are.

I want to marry someone who reflects my values. My wife is independent, educated, curious, ambitious, and family oriented. Me too! That validates my story and creates a bond that lets us build a story together - our family. Of course, my narrative has evolved over the years and hers has too. But they are closely aligned enough, and intertwined enough, that it makes for a wonderful marriage (and wonderful family life).

Choosing how to raise my kids - this is part of my value system and narrative too. Be polite, grateful, curious, silly, active, and healthy. If I didn't like myself as a parent I don't think I'd like myself at all. It wouldn't fit with my narrative, the story I tell myself about myself.

Starting a company is a powerful story too. We are changing the world. Creating something from nothing. Impacting our customers. Creating jobs and wealth. Rewarding investors for their trust in us. Ideally make the world a better place (or at least not worse). These stories help companies grow and become special places to work. Tomasz Tunguz acknowledges this (and other shortcomings) in the The Limitations of Data and Benchmarks.

But there is very little data to support this career choice: startup. Create incrementally more wealth than the next job? Odds are against you. Advance in your career? Maybe but probably not. Most startups fail. Feel closer to your family and friends? Probably not, startups are really demanding. Get healthier? Unlikely. And yet the appeal is incredible.

Building something feels special. You're authoring a story. You're inviting people to author that story with you. You're sharing that story with your partner, kid(s), customers; in fact your partner, kid(s), and customers become a part of it too. That story is really powerful, it is inspiring. It draws people to marriage, parenthood, and entrepreneurship.

Data won't necessarily get you there. But stories will.