The surprising impact of mixing chart forms
The many-faced area chart is not usually your best choice

Super-informative ping-pong graphic

Via Twitter, Mike W. asked me to comment on this WSJ article about ping pong tables. According to the article, ping pong table sales track venture-capital deal flow:

Wsj_pingpongsales

This chart is super-informative. I learned a lot from this chart, including:

  • Very few VC-funded startups play ping pong, since the highlighted reference lines show 1000 deals and only 150 tables (!)
  • The one San Jose store interviewed for the article is the epicenter of ping-pong table sales, therefore they can use it as a proxy for all stores and all parts of the country
  • The San Jose store only does business with VC startups, which is why they attribute all ping-pong tables sold to these companies
  • Startups purchase ping-pong tables in the same quarter as their VC deals, which is why they focus only on within-quarter comparisons
  • Silicon Valley startups only source their office equipment from Silicon Valley retailers
  • VC deal flow has no seasonality
  • Ping-pong table sales has no seasonality either
  • It is possible to predict the past (VC deals made) by gathering data about the future (ping-pong tables sold)

Further, the chart proves that one can draw conclusions from a single observation. Here is what the same chart looks like after taking out the 2016 Q1 data point:

Redo_pingpongsales2

This revised chart is also quite informative. I learned:

  • At the same level of ping-pong-table sales (roughly 150 tables), the number of VC deals ranged from 920 to 1020, about one-third of the vertical range shown in the original chart
  • At the same level of VC deals (roughly 1000 deals), the number of ping-pong tables sold ranged from 150 to 230, about half of the horizontal range of the original chart

The many quotes in the WSJ article also tell us that people in Silicon Valley are no more data-driven than people in other parts of the country.

Comments

Jordan

The sarcasm is strong with this one. :)

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