Ch. 3 Specify Business Problem (Why start with business problem? ("I…
Ch. 3 Specify Business Problem
Why start with business problem?
"problem" synonymous with "opportunity"
starting with correct problem from the start makes all results immediately useful
"I want to predict..."
should we proceed?
is there a better problem to invest in?
can we access the data?
communicate project in a brief to stakeholders
should include definitive metrics
Three criteria for business problem
presented in language of business?
specify actions that should result?
how will this impact bottom line?
Problem Statement Flaws
not focusing on business goals
not specifying resulting actions
not stating impact on bottom line
Good example of business problem
Our hedge fund is considering investing $40 Million/year in loans on LendingClub.com. These loans are an appealing investment with interest rates averaging 17%. However, 5% of invested money on the site is lost due to borrower defaults. We propose building a model to screen out the riskiest borrowers. If successful, our organization will use the model to...