Smarter than a Fifth Grader
I know that counting numbers, ratios, and comparative percentages can be challenging, even for professional adults. For example, taking a ratio like “we beat our competitor 98% of the time this quarter”. A simple enough equation — “98 of 100 times we won.” However, to make that equation have any value, you first have to get accurate underlying data. Then you can do the math and hopefully win a round at “Smarter than a Fifth Grader”. But getting the initial data right isn’t always so easy. Or maybe just not in everyone’s best interest. Take for example Cisco’s recent entrance into the rapidly growing “WAN optimization” market. A hot market by anyone’s standards — the market analysts see it as nearly $600M last year (2006) and growing to $800M-$1B over the next 2-3 years. Cisco itself can claim around 500 new customers in the last 6 months, and nearly 1000 to date. So if you extrapolate that math from the ratio we noted above — other vendors claiming 98% win rate in their external reports and reporter calls — then the total market must be HUGE, since this sample vendor must have won 25,000+ customers over that same six months (25,000 = 500 Cisco wins @ 2% of market). But here’s where the numbers and ratios we noted above can be challenging — the noted vendor in this example claims only 2000 customers to date, and that’s from a very recent announcement. The impact of these math errors can often have far reaching consequences, with even trade magazines, full-scale business publications and Wall St. analysts covering these “equations” without verifying the background data. Smarter than a fifth grader? If we’re talking about people possibly “adjusting” market data to deliver smart-sounding ratios, absolutely at high school-level. If we’re talking about actually believing those numbers without solid data to back it up, then no way — you’ll lose to the fifth grader every time. Are you smarter than a fifth grader? Am I? Let’s talk about it.