In a world of logic, mathematics and numbers; predicting the future is a concept that may seem out of place and something that has to be left to the superstitious and emotionally driven group of the human kind. But even in a world of logic and precision, LLN (Law of large numbers) does a very good job of helping us predict the seemingly random events in the future and it has a very good reputation of being right most of the time.
To explain this, let me take the example of a particular crime in New York. I know what you are thinking – Crime in New York and Web Analytics? They are two different worlds! But I promise you that I will link the two with a common theory.
So what is common in New York and your website? Random events happen. Crime in New York is a random event with too many variables involved, but so are events on your web page such as subscriptions, clicks, downloads and sales. There is no website in the world where 100% of the visitors convert. How do we predict random events?
Magic happens when one deals with large numbers… and the magic is predictability and the “guarantee” of seemingly random events in the near future.
According to the law of large numbers – random events over a period of time and with large numbers always form a pattern.
“In probability theory, the law of large numbers (LLN) is a theorem that describes the result of performing the same experiment a large number of times. According to the law, the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed.” – Wikipedia
That pattern helps us predict random events, something as random as crimes in New York. Let us have a look at some facts. New York has a population of a little over 8 million. The number of times a particular crime was committed happened 542.5 times on average per year in the past 10 years ranging from 2002 to 2011. [Read more…]