True Or False

The June 2003 issue of IEEE Spectrum has a front of the book piece on incorrect data which have become "facts" through repetition. The piece (titled "Sorry, Wrong Number" and unfortunately only available on the web to members) begins:

True or false:

• The amount of data flowing over the Internet is doubling every 100 days.
• The Internet accounts for 8 percent of all electricity used in the United States.
• Computers and information technology equipment, including Internet usage from the previous question, use 13 percent of all U.S. electricity -- and this total will grow to half of all electricity use in 10 years.
• A wireless Palm VII uses as much electricity as a refrigerator when you include all the “behind-the-wall” networking, server, and switching equipment.

Needless to say, all are false and the article does a good job of analyzing how each meme developed. I remember seeing "internet doubling every 100 days" in PowerPoints well into the late 90's. In entrepreneur presentations, we get to see lots of good market research and lots of pseudo market research and I have developed a healthy scepticism of both.

I always find it more helpful to get a thoughtful bottoms-up analysis of the market, where the revenue opportunities are, what are the big companies in the space and how do they create an "umbrella" for your size/valuation. Telling me you can get .01% of a trillion dollar market (billions!) just sounds like you don't understand the market that well (and certainly doesn't sound easy). My favorite market analysis is the stuff teams develop and defend themselves. [Thanks Raj for suggesting the article.]