Predictive Analytics, Revised and Updated

Chapter 1Liftoff! Prediction Takes Action

How much guts does it take to deploy a predictive model into field operation, and what do you stand to gain? What happens when a man invests his entire life savings into his own predictive stock market trading system? Launching predictive analytics means to act on its predictions, applying what's been learned, what's been discovered within data. It's a leap many take—you can't win if you don't play.

In the mid-1990s, an ambitious postdoc researcher couldn't stand to wait any longer. After consulting with his wife, he loaded their entire life savings into a stock market prediction system of his own design—a contraption he had developed moonlighting on the side. Like Dr. Henry Jekyll imbibing his own untested potion in the moonlight, the young Dr. John Elder unflinchingly pressed “go.”

There is a scary moment every time new technology is launched. A spaceship lifting off may be the quintessential portrait of technological greatness and national prestige, but the image leaves out a small group of spouses terrified to the very point of psychological trauma. Astronauts are in essence stunt pilots, voluntarily strapping themselves in to serve as guinea pigs for a giant experiment, willing to sacrifice themselves in order to be part of history.

From grand challenges are born great achievements. We've taken strolls on our moon, and in more ...