Product analytics is a relatively new field, but it's rapidly gaining traction. There are many books published in the last few years that have been instrumental in guiding readers on how to view product analytics as an integral part of business success.
We've listed five of those books below, and why they deserve a place on the shelf of every product manager.
1) The Signal and the Noise: Why So Many Predictions Fail - But Some Don't
This book is written by Nate Silver, an American statistician, and writer with a background in baseball and political analysis, who is the founder of the website FiveThirtyEight.
The Signal and the Noise is both an exploration of prediction, including a survey of some major prediction failures (e.g., Bayes's rule, the global financial crisis), and a study on how to make predictions by weighing possible outcomes without succumbing to overconfidence or wishful thinking.
As Silver points out in his book, predictions suffer from two big problems: "the signal problem" (collecting enough data) and "the noise problem" (not freaking out when data seems random).
To address these problems, he supplies readers with tools for understanding where they can find real signals amid all that noise. These tools include a set of rules of thumb that he called "The 7 Percent Solution", time-tested principles for reading large volumes of data (or “big data” if you like), and the scientific method.
He also demonstrates how to handle factors that may be largely uncontrollable (e.g., the influence of private beliefs, the psychology of others).
While this isn’t a business book, these principles can be easily applied to customer analytics and customer data.
2) Lean Analytics: Use Data to Build a Better Startup Faster
Eric Ries ' Lean Startup movement has spread around the world like wildfire. The idea is that you use insights from data to build a better and faster startup.
It's all about building, measuring, learning, and adapting quickly. In times of hyper-growth, there's simply no room for error.
Lean Analytics is about building a startup in the 21st century. This book helps you use data to build a better, faster, and cheaper startup.
If you're building a product, service, or business on the web, this book is for you. It's written for people who don't have access to venture capital or an unlimited budget.
In other words, it's for people who rely on their skills and hard work to make things happen – entrepreneurs, freelancers, bootstrappers, and intrapreneurs.
Startups need to look at a handful of core metrics. You don’t need to understand complex mathematical models to track each KPI in your analytics tool of choice.
Marketing analytics, web analytics, and business intelligence should be part of every startups’ toolbelt. This book shows you how.
3) Predictably Irrational: The Hidden Forces That Shape Our Decisions
The title says it all. In Predictably Irrational, author Dan Ariely illustrates through his own research how human beings often act in ways that contradict economic theory and statistical analysis.
This book is ideal for entrepreneurs who want to learn better theories about how humans actually work, rather than falling back on traditional models of how consumers behave.
Dan Ariely offers tangible and simple insights about why we make choices in the way that we do, in addition to the hows and whys of decision-making.
Dan shows how our decisions are seldom based on sound logic - they're more often based on emotions, beliefs, and social pressures.
You don't have to be an economist or a human behavior expert to gain insights into human decision-making; rather, by reading one of the world's most sought-after thinkers - Dan Ariely - you will find yourself learning and understanding something about your own thoughts and individual behavior.
4) Product Analytics: Applied Data Science Techniques for Actionable Consumer Insights
If you want to grow your business, it's important to better understand your customers. With Product Analytics, you can gain a deeper understanding of customer behavior and use this information for actionable insights that drive competitive advantage.
As stated by the publisher, this book “Shows how to combine data science with social science to gain unprecedented insight into customer behavior, so you can change it. Joanne Rodrigues-Craig bridges the gap between predictive data science and statistical techniques that reveal why important things happen-- why customers buy more, or why they immediately leave your site.”
In her experience, Joanne has seen organizations try to use data science techniques for understanding customer behavior. Although these efforts are often successful, they often fail to produce actionable insights.
She believes this is because companies use data science techniques that require complex mathematics - something only a few people are skilled in.
Predictive analytics and descriptive analytics are difficult subjects to master. That’s why data analytics specialists with deep knowledge dominate the space.
She says customers and companies alike would prefer that the math examples be simpler and more applicable to their lives. To address this need, she uses powerful social science techniques to provide insight into consumer behavior.
These methods can be easily understood by ordinary people and provide actionable insights. Her goal is to use these methods to create simple tools that help business managers make better decisions based on customer engagement and retention.
5) Winning with Data: Transform Your Culture, Empower Your People, and Shape the Future
Venture capitalist Tomasz Tunguz writes daily on his blog about important startup topics, including startup people management, using data, fundraising, and growth.
Winning with Data will offer practical advice not just for managing more efficiently but also for prioritizing what to do now to ensure continued success in the future. Tomasz has been using data as a resource since he launched his first startup in 1999.
Today he helps startups leverage each data point to make better decisions and maximize their opportunities.
You don’t need lots of statistical computing power to implement practical statistical techniques that can benefit your company. For companies striving to do more with less and prioritize what's important now so they can grow steadily over time - Winning with Data is the book of choice.
Winning with Data will offer practical advice not just for managing more efficiently but also for prioritizing what to do now to ensure continued success in the future.
These 5 books promise to offer startups practical insights on how to run their business in the most efficient way possible.
Just as important, these books will help you better utilize your product analytics tools to understand your customers and offer them what they want as a result of knowing what drives them and their behavior.