Tuesday, February 3, 2009

The magnitude of numbers are becoming irrelevent

One of the knocks on MBA graduates is that they tend to only focus on numbers.  Spreadsheets, statistical models, market segmentations, etc..

But as I read and watch this latest econalypse unfold, I'm starting to wonder if people have become numb to the magnitude of the numbers being thrown around.   For example - up until recently, Bill Gates and Warren Buffett had net worth of approximately $40,000,000,000.  (NOTE - I wrote the full number out to show the magnitude, because it's too easy to forget how big $40B really is.).  This number represents 30-40 years of work from these men, creating businesses that produce products or services to the world on a massive scale.

We used to talk about how Gates or Buffet could take all their money and solve some serious world challenges, exactly how the Gates Foundation is doing today.  $40B was a lot of money.

$40B is also 5% of the funds allocated to TARP.  And many experts are saying that the depth of the banking crisis might be 2-4x the existing known level, so TARP II or TARP III might actually make that $40B be 1% or .1% or .01%.  

Sometimes it's helpful to put numbers in perspective for people, especially when the numbers are HUGE.  At my previous company, we shipped a product that was supposed to help scale the performance of the Internet.  The examples we used to communicate it's performance were things like "download the entire Library of Congress in less than 1 second" or "allow every person in NYC to watch a YouTube video at the same time".  While these examples were still huge in scale, they were much better at communicating the scope than saying 180 TerraBytes per Second.

So my tip to anyone trying to communicate the scope of the numbers being thrown around today is to try and put them into perspective.  I find that if people can relate to the numbers on some level, it helps them find a way to engage in the ramifications of those numbers.