This document discusses data science and how it can be used to analyze customer data to determine customer value. It describes using attributes like age, income, number of kids to build a model to predict the probability a customer will be high value. It also discusses creating additional features from the data, like favorite games played, and using these to find patterns to understand customer stickiness and spending. The document concludes saying creating many factors from data and viewing it from multiple angles can lead to insights, and there will be increasing demand for data scientists and managers skilled in data analytics.

1. Data Science demystified
Murthy Kolluru, Ph.D.
IPL CONFIDENTIAL 1

2. IPL CONFIDENTIAL 2

3. IPL CONFIDENTIAL 3

4. IPL CONFIDENTIAL 4
How good is my customer?
• Within the first few weeks of engagement, figure out how much
revenue 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

5. IPL CONFIDENTIAL 5
Attribute 1
Attribute 2

6. Output
Probability of being high value = -0.25* age +
0.34* income + 0.78 * number of kids
IPL CONFIDENTIAL 6
Age Income Kids

7. IPL CONFIDENTIAL 7
Attribute 1
Attribute 2

8. Output
If parents are old and number of kids
is less than 2 and income is less than $10K,
IPL CONFIDENTIAL 8
the value is low

9. IPL CONFIDENTIAL 9
Attribute 1
Attribute 2

10. IPL CONFIDENTIAL 10
Attribute 1
Attribute 2

11. IPL CONFIDENTIAL 11

12. Simplest form of non-linearity
IPL CONFIDENTIAL 12

13. By carefully combining simple non-linearities,
IPL CONFIDENTIAL 13
you can get
highly non linear curves.

14. IPL CONFIDENTIAL 14

15. IPL CONFIDENTIAL 15

16. IPL CONFIDENTIAL 16
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

17. IPL CONFIDENTIAL 17

18. IPL CONFIDENTIAL 18
• Blackbox models only solve part of the
problem
• How do we get Explicability?

19. IPL CONFIDENTIAL 19
Attribute 4
Attribute 1
Attribute 2
Attribute 5

20. IPL CONFIDENTIAL 20
What we did
• Created more features
• Did they have a favorite game?
• How are the kids ages distributed?
• When did the first sale happen?
• …

21. IPL CONFIDENTIAL 21
Patterns
Favorite – Played a
game more than 50% of
the time
Uniform –Played multiple
games

22. IPL CONFIDENTIAL 22

23. IPL CONFIDENTIAL 23

24. Customers who are uniform in first 30
days are on average sticky and give
more revenues in two years.
IPL CONFIDENTIAL 24
24

25. IPL CONFIDENTIAL 25
First sale
Dec and Jan
win!

26. IPL CONFIDENTIAL 26
26
Upsell?
Dec & Jan lose
big!

27. Action Points
• 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
IPL CONFIDENTIAL 27
• View it from multiple angles in your Excel
• You will most likely have some Aha moments in store!!!

28. There will be a shortage of
100,000 data scientists and
1,000,000 data smart
managers by 2020
IPL CONFIDENTIAL 28
Mckinsey

29. IPL’s Big Data Analytics Track
IPL CONFIDENTIAL 29
Architecting
data science
solutions &
products
Hands-on
model building
Data
visualizations
and story telling
Complexities in
data sourcing,
privacy, security

30. IPL CONFIDENTIAL 30
THANK YOU
11/29/2014