You only need 5 data points to start

by Derek LeBlond

Version 3 - Create Date: 2022-04-20, Last Update: 2022-08-26

Uncertain about a decision? Don't buy into the myth that you need deep data sets. There are decisions you can make with only 5 data points.

Many of us are caught in analysis paralysis. We need a representative sample to make our decision. We lack the resources or time to get the information at that scale, which is usually in the hundreds or thousands. Therefor we make no decision. We lose initiative or consider it a blocker while we try to get the information.

In all honesty though, you may be able to move forward with the collection of just 5 data points.

The crux of this is the Rule of 5 from Douglas Hubbard's book How to Measure Anything. The rule of 5 states there is a 93.75% chance that the median of a population is between the smallest and largest values of any random sample of 5 from that population.

What does that mean?

No, median. Sorry, bad statistics joke.

Essentially, if you ask 5 people out of a group of 10 people, 100 people, even 1 million people, the median value for that measurement is within those 5 data points. The median is that middle point in your data set. The median is more accurate than the mean, or average, to use in judgements.

While not a perfect measurement, it is a perfect way to reduce uncertainty at low cost. And, uncertainty is the key focus.

When would you use it?

The Rule of 5 is the equivalent to your finger in the wind. With your finger in the wind, you aren't a meteorologist, but you can figure which way the wind blows.

You aren't launching people into space with the Rule of 5. They would get lost.

Use this for when you need to do some “back of the napkin” math. Answer questions such as, “How can I improve office morale?” You don't have to ask every employee. Ask 5. The answer is probably within those 5. Now you went from infinite decisions to a few.

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