Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about decision making for entrepreneurs. They walk you through some decision making techniques and look at how they can help you make decisions faster and more efficiently.
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Transcript
Mike [00:01]: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about decision-making for entrepreneurs. This is Startups for the Rest of Us, episode 301. [music] Welcome to Startups for the Rest of Us, the podcast that helps developers and designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you have built your first product, or you’re just thinking about it. I’m Mike.
Rob [00:25]: And I’m Rob.
Mike [00:26]: And we’re share our experiences to help you avoid the same mistakes we have made. What’s going on this week Rob?
Rob [00:29]: Just recovering from MicroConf Europe. I had a really good time last year. I guess we should a Take-Away’s episode from Europe 2016, shouldn’t we?
Mike [00:38]: Oh, we probably should. It might have been a good idea for the live podcast episode, but that would have been difficult to do I guess.
Rob [00:42]: Because the conference wasn’t done.
Mike [00:44]: Right.
Rob [00:45]: But we’ll try to do next week’s with our Take-Away’s. It was a really, really good conference. I had a lot of fun. Sometimes when we throw the event there’s a lot of struggles, and some things don’t turn out the way you want, but it ran really smooth. I thought that the talks were very good this year, and overall I had a really good time. It was good to be back in Barcelona again.
Mike [01:04]: It’s really funny that the episode that went out last week – I listened to it, and at the very beginning it made it into the cut where I interrupted you and said, “You didn’t say episode 300,” and you said, “I was getting to there,” and then you completely skipped over saying it was episode 300.
Rob [01:18]: No, I did say it was 300 –
Mike [01:19]: No you did not! I went back and listened to it, and even my wife listened to it and she was like, “He didn’t say it, did he?”
Rob [01:24]: No. I’m going to pull that snippet and email it to you, or post it on the blog or something.
Mike [01:29]: I don’t think it was there.
Rob [01:31]: That episode was fun. Hopefully as a listener, you’ve already listened to that. It was our first live episode ever, so there was definitely a different energy level, and sound quality, and ambiance, and that kind of stuff. But it was fun to be able to share that kind of recording experience with a group of people, because normally it’s basically you and I basically sitting on opposite ends of the country in our respective closets with the shades drawn.
Mike [01:52]: Yeah, that was a lot of fun. It’s definitely interesting to be up on stage like that and to talk to people directly, either during an episode or even immediately afterwards, and being able to answer questions and talk a little bit about it, and just hear how long people have been listening, what kind of take-away’s they’ve have. We sent out an email to the email list for the podcast – which if you’re not on that email list, you can go to Startupsfortherestofus.com and there’s an email list you can sign up for. We don’t send out too many emails, but we do use it to kind of communicate with the audience to some extent.
Rob [02:20]: ”What are some unfair advantages for faster SaaS growth? This is Startups for the Rest of Us, episode 300.” Oh, snap!
Mike [02:29]: I must have missed that.
Rob [02:31]: So now that we know I’m right, what’s going on with you?
Mike [02:25]: Well, I guess I’m just getting older and I can’t remember things as well. I was sure I had listened to that. I didn’t hear that.
Rob [02:41]: Getting older. Was it fun for you to have 110 of your closest founder-friends singing you Happy Birthday on the Micro Conf Europe stage last week?
Mike [02:49]: I’m not sure I’ll forgive you for that, ever.
Rob [02:52]: Yeah, now I know your birthday is right around early August here, so –
Mike [02:56]: I still am kind of speechless about that. I can’t believe you did that to me.
Rob [02:59]: You turned 40.
Mike [03:01]: Yes, I did.
Rob [03:02]: How does that feel?
Mike [03:03]: Well, I am still always going to be younger than you, so it feels great.
Rob [03:06]: That’s true.
Mike [03:08]: No, I didn’t really do much. I just worked and then late evening I sat down, had a glass of whiskey, and read a book. That’s about it.
Rob [03:14]: Nice. Low-key. Good way to recover from travels last week.
Mike [03:19]: It’s a good way to get old.
Rob [03:20]: Yeah, dig it. Cool. So what are we talking about this week?
Mike [03:23]: Well, today we’re going to talking about decision-making for entrepreneurs. The idea here is that with this episode we’re going to walk through some decision-making techniques, and looking specifically at how we can make better decisions faster. because the progress that we make in a daily basis is generally constrained by our ability to make good decisions and make those decisions quickly so we can actually get back to work. When you are struggling to make decisions, or you’re not making decisions quick enough, then the progress that you’re making and the output tends to slow down a lot. I’ve noticed this in my own situations where if I’m struggling with a decision, or it’s taking me much longer than it probably should to make that decision, then progress on pretty much everything stops, because I’m either wrestling with it, or trying to do different things to get more information and trying to figure out what I should be doing. Instead of actually doing anything I’m just trying to make a decision. It kind of leads to procrastination, but there’s a lot of implications of that because obviously it detracts from morale and makes you think about things a lot more and increases stress and all these other things that go along with it. Because you’re stressed out that you’re not making a decision, or moving things forward, and it’s constantly on your mind. So the idea for this episode is to talk about how to go through the decision-making process faster.
Rob [04:38]: Yeah, and decision-making, as you said, is such a key part of what you do day-to-day as a founder, and I think that one of the biggest parts of how to keep things moving forward is making decisions with not enough information. That is like a majority of my day, making the best decision you can given that you don’t have all the info that you would otherwise want to make a perfect decision.
Mike [05:01]: Number one on our list of decision-making for entrepreneurs is being cognizant that you are not making a decision. I think one of the tell-tale signs of this is that you’re procrastinating and there’s a lack of progress. Those are really symptoms of not being able to make a decision. They are not the root problem itself. The root problem is that you are struggling to make this decision. I think one of the ways to be more cognizant of this is you have to pay attention to the progress that you’re making. Because it’s very difficult to be in that situation and then say, “I’m in the middle of trying to make a decision and I’m having a hard time with it.” But there are symptoms that you can be aware of, and if you are tracking those types of things on a regular basis, then it will kind of remind you that you are maybe struggling with this decision. So if you’re tracking your daily tasks that you are attempting, or that you have actually achieved – whether it’s through a journal or a task list, any of those types of things – if you find that you’re not making progress on them then try to figure out if it’s because you’re having a problem making decisions. Is that the problem that you have, or is that you’re working on the wrong thing and you’re not making any progress, and it ultimately doesn’t matter? Not every day is going to yield any sort of progress, but if there’s too many days in a row without a substantial amount of progress, then it could be because you’re struggling to make decisions. When you are struggling to make those decisions, that’s where these symptoms start to come out.
Rob [06:21]: I notice when I’m procrastinating and not able to make decisions it tends to be because there’s either something at the top of my to-do list that I really don’t want to think about, don’t want to do, don’t want to make a decision, or there’s something somewhere in my inbox where I keep skipping around. I think having the discipline to always force yourself to work top to bottom through your to-do list, or bottom to top through your email inbox, and basically power through it and make fast decisions and make the best decisions that you can – I think that’s a discipline that we all should work on. I don’t maintain it full-time, but I notice that on the days that I do I notice that there’s a lot of willpower, and it typically requires me to get some music playing and get some caffeine in my system, and then I can break through. I mean, I will have stuff on top of my to-do list for weeks and then I realize that I’m going around it and doing things of a lower priority because I just don’t want to do that one, but when I start hammering through it, the things you put off for weeks – because you don’t want to do it, or you think they’re going to take a long time – you often hammer them out in like, an hour, typically is what winds up happening. There’s this huge freeing weight lifting from your shoulders. You have to kind of be aware of this. You have to make yourself aware that you are not focusing, and that you are not making decisions because of that. Then fight it head on. Pick a moment where you’re at maximum strength. You’re awake, you’re motivated, you’re in a good mood, and just get psyched up and hammer through something that you’ve been holding off on. Once you do that, it’s amazing how much momentum you gain from that, and the positive energy that comes out of tackling something like that that’s been holding you back for days, hours, or weeks.
Mike [07:52]: The second tip for decision-making is to frame the decisions that you do need to make. Part of that comes with outlining the issues around the decision. But it also ties into separating your emotional ties from that decision so you can be more objective about it. Think about why it is that you need to make this decision. What are the results of that decision? What is the outcome? And is this decision even important? Do you have to make this decision? Because sometimes you don’t. There’s certainly decisions you may come across that you feel you may need to make a decision. So ,for example, an email comes in and you feel like you need to reply to it right away. Usually that’s not the case. A lot of times you can either delay those things, or, if it’s a support request, you can hand it off to somebody else. It depends on the specifics of that. But a lot of times you can take a look at those decisions and either push them off a little bit – which there’s a fine line between actively deciding to deal with something later, versus performing avoidance techniques to not do it. I think these are two very different things. But take a look at whether or not you even need to make this decision. Is it relevant to you?
Rob [08:55]: Something to keep in mind – as you are making a decision – this is a little bit of a tangent, but there’s this acronym that I think is used in psychology, or in coaching, or something, but it’s an acronym that’s HALT. That’s H-A-L-T. It’s don’t make decisions when you’re Hungry, Angry, Lonely, or Tired. And then actually Jacob Thurman did an attendy talk a couple years ago at [MicroConf] and he added an “S” for Sick because he had a stomach ailment, and he was having a really tough time making decisions and he didn’t want to make a bad one. So be really cognizant of your state of mind as you’re doing this. This is, again, a self-awareness thing, and it’s going to be aware that you are angry or hungry or lonely. It’s easy to be sad or depressed or to be having a rough day and make decisions that are just not ideal, especially if you’re making permanent or semi-permanent decisions you really don’t want to do that. That’s something to kind of keep in mind.
Mike [09:46]: The third step is to ask yourself if you have enough information to make this decision. Most of the time we don’t have all the information relevant to a particular problem in order to make a decision, so the vast majority of the decisions that we are making are based on incomplete information. There is a threshold that you are going to cross where you will have enough information to make that decision, and when you’re in the middle of trying to make a decision, if you’re struggling with it, ask yourself if you do have enough information to make that decision. If you don’t, how do you get it? How long is it going to take to get that information? What is the cost, in time, to acquire that information? If you were to make that decision and move in a particular direction, is that going to be faster than taking four to six weeks to identify the information that you need to do something that would have only taken two weeks to begin with? You have to balance out and you have to look at that and figure out whether it’s warranted to just make the decision and move forward knowing that you may have to do work again and, or make a different decision, versus spending the next four to six weeks trying to figure out the additional information that you need. Sometimes there’s an opportunity cost there that a lot of times it’s just easier to just make the decision and move forward even if it is the wrong decision, because you will learn things along the way.
Rob [11:02]: I said this a couple episodes ago about how there are certain decisions that are easy to undo, so make those quickly. Make the best when you can and move on. Then there are certain decisions that are really hard to undo, and those are the ones that you are going to need to agonize over and get as much information as possible, and being deliberate about information-gathering. Thinking like, “What test could I run?” Sometimes it’s a decision of like, “”Should we change our pricing?” Or, “Should we change our home page to a totally different version?” Often times you can just run a split test, or you can talk to customers. There are ways that you can gather some more information, and it might take some work to do, but it will help keep you from shooting into the dark and basically not knowing if what you’re doing is going to improve the situation.
Mike [11:46]: The fourth tip is actually the opposite, which is you have too much information, or you have conflicting information. I think this is a common source of angst among people, myself included, where you don’t want to make the wrong decision, and not wanting to make the wrong decision can lead to procrastination. I think in these situations you have to do something of a cost-benefit analysis to figure out how much longer it would take to get decisive information, or whether even that situation exists. Is it possible to get decisive information? If you look at something like AB-testing, it can take a long time for something to be statistically significant if the differences are minute, or you’re not able to throw a lot of traffic at a particular thing for example. Sometimes adding more information is simply not going to help. You’re going to have to make a decision one way or the other. And as you said, sometimes you just have to make that decision and you’ll go down the wrong path and that’s okay. You have to be comfortable with that ,and accept that there are going to be decisions that you are going to make, you’re going to be wrong, and that’s okay. The fifth tip is that decisions tend to have a way of proving themselves right or wrong rather quickly. If you’ve made a decision and you’re not sure if it’s the right one, several weeks afterwards or several months afterwards, take a look at how much longer it’s going to be before you think that you’re going to be a position where you believe you’ve made the right or wrong decision. What are the conditions that need to come up that are going to allow you to verify one way or the other? When you get into those in between stages where you have made a decision and you’re looking back historically to figure that out, sometimes that’s difficult. Sometimes there’s kind of a meandering of the environment, or what it is that you’re working on, and you’re just not sure. When you’re doing that it’s difficult to be confident about the direction that you’re going and you have to just take a step back and say, “Is this the right approach? Am I doing the right thing?” Because sometimes it’s not. Looking at the reward for being right, or the penalty for being wrong, is warranted in those cases.
Rob [13:37]: You know, this is something that I’ve struggled with a long time, and actually used to struggle with a lot more when I was younger and kind of as an earlier start-up founder, I would make decisions and then I would second-guess them for days or weeks or months if it was warranted. That is not how you want to make decisions. You are carrying around this cognitive load and this baggage, and it really distracts you from moving forward and getting the work done that you’re trying to get done. So I think, over time, maybe it’s purely just kind of desensitizing yourself to it, and learning that the more decisions you make the less each individual one matters. Or maybe it’s just a learned skill. Maybe it’s something – I genuinely don’t know. I think at a certain point in order to move forward I had to start making the call and living with the outcomes. I didn’t have the time or the energy to sweat it anymore. I don’t necessarily have any fantastic guidance, tips, or tactics. I’m sure someone out there does who has studied this, but I do know that I’ve gotten way, way better and I feel better about so many more of the decisions that I make now than I used to when I would kind of second-guess everything that I was thinking about.
Mike [14:40]: I think what you just said there is probably a fantastic quotable quote, which is the part about the more decisions you make the less impact each individual decision has, because you’re able to achieve more and accomplish more, so the addition of all of those things overcomes any individual wrong decisions that you might make along the way. If you make a massive incorrect path decision, then that also a collection of lots of other decisions as well, but the individual decisions along the way, in and of themselves, don’t necessarily matter as much. The last tip we have here, which is something that Rob talked about a little bit earlier, which is decisions tend to be reversible. There’s a lot of decisions you’re going to make where you can make tiny course corrections, or you may decide, “Hey this is a strategy that is not working and we’re going to go in a different direction now.” So you make either minor course alterations, or a massive course alteration, based on the environment, but these things are not set in stone. You don’t have to continue going down a path you have already gone down for the sole purpose of going down that path, or because you don’t want to be wrong. You’re going to be wrong on occasion, so if you have to change your course, or change the decision that you’ve made, that’s okay too.
Rob [15:50]: I think that’s something big that I learned – is undoing decisions. In most cases, while sometimes you’ll lose face, or you look a little foolish to someone going back, but you can undo almost every decision. There are some exceptions, but I think that getting over the fear of looking dumb, or of having someone think that person didn’t know what they wanted – it tends to be social fears, I think, that keep us from undoing decisions. Almost all decisions you make can be undone. The question is always just at what cost, right? Sometimes undoing decisions will cost you $20, or sometimes it could be hundreds of dollars or thousands, and you just have to value it – is it worth paying that in order to be able to undo it? In another respect, sometimes it’s just your reputation, it’s just a little ding, or a large ding, against your reputation, and you have decide, “Is it better to move forward the way I’ve decided? Or is it better to take that short-term hit to my reputation and to be able to undo it?” I think it’s an interesting way to think about it. To not think about it in black-and-white, like, “I made the decision and therefore I’m moving forward.” Because if the information changes, and even if there’s going to be some type of cost to you – whether that’s money or reputation – if it’s the right choice then it’s the right choice. Go back and undo it. What you often find out is that the ramifications are often a lot less severe than you think they will be in your mind. That question of, “What’s the worst that can happen if I undo this decision?” Ask yourself that and dig into it and really think, “What is likely to happen here?” Maybe get a sanity check, because I think you can trap yourself in a box, especially us as engineers, we can trap ourselves in this box of thinking everything is black and white, and once you make the decision it’s done. I have learned over the years — this is something which I did not understand at all when I was younger – I’ve learned over the years that so much is able to be undone.
So to recap, the six tips for decision-making for entrepreneurs are – number one, be cognizant of when you’re making a decision. Number two, frame the decisions you need to make. Number three, do you have enough info? Number four, do you have too much information or conflicting information? Number five, decisions have a way of proving themselves right or wrong quickly. Number six, decisions are reversible. If you have a question for us, call our voicemail number at 888-801-9690, or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out of Control” by MOot, used under Creative Comments. Subscribe to us in iTunes by searching for “Startups” and visit Startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
