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Data Science demystified

Murthy Kolluru, Ph.D.

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How good is my customer?

• Within the first few weeks of engagement, figure out how muchrevenue can be expected in the first two years.

• 100,000 customers over 5 years and

a lot of data

• POS data, playing, demographics

• Over 50 attributes

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Attribute 1

Attribute 2

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Probability of being high value = -0.25* age + 0.34* income + 0.78 * number of kids

Age Income Kids

Output

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Attribute 1

Attribute 2

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If parents are old and number of kids is less than 2 and income is less than $10K,

the value is low

Output

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Attribute 1

Attribute 2

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Attribute 1

Attribute 2

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Simplest form of non-linearity

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By carefully combining simple non-linearities, you can get

highly non linear curves.

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Finally mind is demystified!

Rival The New Yorker, December 6, 1958 P. 44

ABSTRACT: Talk story about the perceptron, a new

electronic brain which hasn't been built, but which has

been successfully simulated on the I.B.M. 704. Talk

with Dr. Frank Rosenblatt, of the Cornell Aeronautical

Laboratory, who is one of the two men who developed

the prodigy; the other man is Dr. Marshall C. Yovits, of

the Office of Naval Research, in Washington. Dr.

Rosenblatt defined the perceptron as the first non-

biological object which will achieve an organization o

its external environment in a meaningful way. It

interacts with its environment, forming concepts that

have not been made ready for it by a human agent. If

a triangle is held up, the perceptron's eye picks up the

image & conveys it along a random succession of lines

to the response units, where the image is registered. It

can tell the difference betw. a cat and a dog, although

it wouldn't be able to tell whether the dog was to the

left or right of the cat. Right now it is of no practical

use, Dr. Rosenblatt conceded, but he said that one

day it might be useful to send one into outer space to

take in impressions for us

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• Blackbox models only solve part of the problem

• How do we get Explicability?

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Attribute 4

Attribute 1

Attribute 2

Attribute 5

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What we did

• Created more features

• Did they have a favorite game?

• How are the kids ages distributed?

• When did the first sale happen?

• …

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Patterns

Favorite – Played a

game more than 50% of

the time

Uniform –Played multiple

games

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Customers who are uniform in first 30

days are on average sticky and give

more revenues in two years.

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First sale

Dec and Jan

win!

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Upsell?

Dec & Jan lose

big!

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• A great model on simple and incomplete data almost

always loses to a simple and incomplete model on great

data

• Pick unsolved problems in your business where you have

some past data

• Create as many additional factors as you can from the data

• View it from multiple angles in your Excel

• You will most likely have some Aha moments in store!!!

Action Points

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There will be a shortage of

100,000 data scientists and

1,000,000 data smart

managers by 2020

Mckinsey

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IPL’s Big Data Analytics Track

Architecting data science solutions &

products

Hands-on model building

Data visualizations

and story telling

Complexities in data sourcing,

privacy, security

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THANK YOU

11/29/2014