GIGO (Garbage in, Garbage out)

Entrepreneurs should know that if they work from faulty information they get faulty analysis.

Wikipedia, the free, on-line encyclopedia, says:

Garbage In, Garbage Out (abbreviated to GIGO) is a phrase in the field of computer science or ICT. It is used primarily to call attention to the fact that computers will unquestioningly process the most nonsensical of input data and produce nonsensical output, and is a pun on FIFO (First In, First Out). It was most popular in the early days of computing, but applies even more today, when powerful computers can spew out mountains of erroneous information in a short time.

The actual term "Garbage in, Garbage out", coined as a teaching mantra by George Fuechsel, an IBM 305 RAMAC technician/instructor in New York, soon contracted to the acronym GIGO. Early programmers were required to test virtually each program step and cautioned not to expect that the resulting program would "do the right thing" when given imperfect input. The underlying principle was probably cited by Charles Babbage, inventor of the first programmable device, who said:

On two occasions I have been asked,—"Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?" [...] I am not able rightly to comprehend the kind of confusion of ideas that could provoke such a question

It is also commonly used to describe failures in human decision making due to faulty, incomplete, or imprecise data. For example, a poorly typeset TeX document will look bad because the user did not write the TeX source well.

The term can also be used as an explanation for the poor quality of a digitized audio or video file. Although digitizing can be the first step in cleaning up a signal, it does not, by itself, improve the quality. Defects in the original analog signal will be faithfully recorded, but may be identified and removed by a subsequent step. (See Digital signal processing.)

Garbage In, Gospel Out is a more recent expansion of the acronym. It is a sardonic comment on the tendency to put excessive trust in 'computerized' data, and on the propensity for individuals to blindly accept what the computer says. Because the data goes through the computer, we tend to believe it.

Decision-makers increasingly face computer-generated information and analyses that could be collected and analyzed in no other way. Precisely for that reason, going behind that output is out of the question, even if one has good cause to be suspicious. In short, the computer analysis becomes the gospel.

More than this, though, entrepreneurs work with non-computerized faulty data all the time, too. In fact no data set, computer- or human-generated, is perfect. It's either out of date (rapidly in today's economy), the biases inherant in it isn't known because the creators of the data either did not know what the biases were or were not careful to state them, or the data are non-specific to your needs.

Creating your own data isn't a good solution, at least initially, because it's expensive and by the time the results are in, they're out of date. So, you have to triangulate and assign an error factor to the information you do use. Also you have to establish a plan with benchmarks and monitor your progress at every step of the way so that if things seem to go astray, you can make corrections in time.

More than that you can't overstate what you know and you have to figure out just what you don't know and how something arising from what you don't know can rise up and bite you and what the probably intended and unintended consequences (usually 2x to 3x the estimated intended consequences) will likely be. Out of such monitoring come the awareness of other entrepreneurial opportunities.

Does this make sense? Post a comment. And read the whole Wikipedia article. It's a good one.

Entrepreneurship 2.0 is my entrepreneurship course. The ideas in it supply the life's blood of my professional activities: teaching, writing, and real estate. For entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for entrepreneurial writing to www.kearneymusicschoolmurders.blogspot/com.