A guide to type 1 errors: Examples and best practices

In product management, statistical testing is crucial for evaluating the impact of new features or modifications, but it comes with the risk of type 1 errors, or false positives, which occur when a null hypothesis is incorrectly rejected. This can lead to misguided decisions and wasted resources. Factors contributing to type 1 errors include small sample sizes, multiple comparisons, publication bias, inadequate control groups, and human judgment bias. To minimize these errors, product managers should carefully design experiments, set appropriate significance levels, use techniques like Bonferroni correction for multiple tests, ensure sufficient sample sizes, and validate findings through replication. Understanding and addressing type 1 errors can lead to more reliable decision-making, ensuring that product changes truly benefit users and align with business goals.