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Showing posts from July, 2018

Paired Metrics

https://mattyford.com/blog/2014/6/11/paired-metrics
https://www.youtube.com/watch?v=6fQHLK1aIBs
http://startupclass.samaltman.com/courses/lec14/

One important concept is pairing indicators. Which is, if you measure one thing and only one thing, the company tends not to optimize to that. And often at the expense of something that is important. Cost is example of payments and financial services is risk. It's really easy to give the risk team the objective and say, we want to lower our fraud rate. It sounds great. Until they start treating every user in this audience as a suspect because they want to lower the fraud rate. So they require each of you to call them up on the phone and give them more supplemental information and fax in things. Then you have the lowest fraud rate in the world, you also have the lowest level of customer satisfaction score. What you want to measure at the same rate as your fraud rate, is your false positive rate. That forces the team to actually innovate. Si…