Statistical concepts for PMs
Product managers encounter statistics daily through user metrics, conversion rates, and performance indicators. Key statistical concepts help separate signal from noise in product data:
- Mean, median, and mode: Mean is the average of all values, median is the middle value when sorted, and mode is the most frequent value. Each tells a different story about your data
- Standard deviation: Measures how spread out data points are from the average. Low deviation means consistent behavior, high deviation indicates unpredictable patterns
- Confidence intervals: A range where the true value likely falls. A 95% confidence interval for a 20% conversion rate might be 18-22%, showing your uncertainty
- P-values: The probability your results happened by chance. P-value of 0.03 means only 3% chance the results are random, suggesting real impact
- Sample size: The number of data points collected. Larger samples provide more reliable results and reduce the impact of random variations[1]
Understanding these fundamentals and how they apply to your product and data can help prevent celebrating false wins or killing successful features based on incomplete data.
