“Zillow Quits Home-Flipping Business, Cites Inability to Forecast Prices,”\u00a0WSJ reports.* I try to avoid passing along news stories but it’s not everyday I receive a predictive analytics story as breaking news.<\/p>\n
I wonder whether the reason is really “an inability to forecast the prices” or “relying too much on an ability to forecast the prices” for a “$20 billion a year” venture as it was debuted.<\/p>\n
Zillow announced plans for this data-driven venture in 2018 by citing consumers who “expect magic to happen with a simple push of a button.” In a statement yesterday, Zillow seems to have realized magic is not happening: \u201cBut it would be na\u00efve to predict that unpredictable events won\u2019t happen in the future.\u201d<\/p>\n
Maybe it is never a good idea to develop a whole business model that grossly underestimates the changes in error (both reducible and irreducible<\/em>) due to potential bifurcations in market forces.<\/p>\n