Six Keys to Better Startup Decision-Making

Photo by Isaac Davis on Unsplash

Hi, I’m Kwin, co-founder of Daily.co and two previous startups. This post is part of a series about startups, tech, and startup founder skills. I’m always happy to be helpful to startup founders and people trying to break into tech, if I can be. Feel free to schedule a Daily.co video call with me, here.

A few weeks ago my friend Erin Frey said, in a conversation we were having about startup challenges, that startup founders “have to learn the skill of being okay with uncertainty.”

That’s really well put. As a startup founder, the weight of making critical decisions is on your shoulders. You never have enough information to be sure whether you’re making the right decision. But making good decisions — and being okay with your decisions — is a skill you can work on.

I think of decision-making as a muscle: you need to pay attention to training and developing that muscle, but you can also over-use it, or use it in inefficient ways. Here are a few rules of thumb that I try to keep in mind.

1. Make decisions fast

Early-stage startups need to iterate quickly. You have to figure out what you’re actually selling, who your target customers are, and how you’re going to reach those customers. Getting any of those things right requires trying a bunch of things, while constantly learning, evaluating, and adjusting.

There’s a high correlation between successful startups and startups that are run by people who are comfortable making decisions quickly. Decisiveness is a virtue.

Put another way, making decisions slowly is a good way to run out of runway.

Sadly, making decisions too quickly is a good way to run out of runway, too! (Nothing about startups is easy.) Jumping around too much between “priorities,” never giving a strategy a chance to work, wasting resources on short sprints that never get you to a goal — these are common anti-patterns.

So how do you find the right middle ground?

My rule of thumb is to try very hard to make initial decisions quickly, but to revisit decisions only if I can clearly articulate new inputs or a new context.

2. It’s okay to be wrong. It’s not okay to stay wrong.

How do you convince yourself to make a decision even though you know you might be making the wrong call?

Here’s one way: tell yourself that it’s okay to be wrong, it’s just not okay to stay wrong.

No decision is forever. Every decision is an experiment of sorts. The alternative to being wrong is not learning as fast as possible. Not learning — not gathering new data — is usually worse than being wrong for a little while.

The classic example of this is shipping product early and often. These days, everyone knows about minimum viable products and lean startups. But it’s still hard for most founders to get comfortable just shipping. Quickly. Repeatedly. Even though features you really, really want to add are missing.

But it turns out that you are far, far more likely to be successful if you ship early and learn the lessons that only shipping can teach you. Make tough decisions about what to prioritize in product development. Then make the even tougher (but actually quite simple) decision to “ship it!”

Do whatever it takes to learn as much as you can, as quickly as you can, and adjust based on what you learn. And remember that all successful startups have gotten many, many things wrong as they’ve grown. You will, too. :-)

(And remember Reid Hoffman’s advice: “If you are not embarrassed by the first version of your product, you’ve launched too late.”)

3. Putting off making a decision is making a decision.

Not making a decision actually is making a decision.

If you put off making a decision, you’re deciding to keep doing whatever it is that you’re doing now.

I’ve worked with or mentored a number of people over the years who had trouble making decisions. They were perfectionists and were unwilling to commit to a decision they knew involved trade-offs. Or they badly needed to feel like they had sufficient data before making a decision. Or they didn’t want to make decisions they knew some people would disagree with or be upset about.

I encourage people who tend to put off making decisions to always compare their current situation to the likely outcomes of a decision. Don’t let the “no-decision decision” just be an unexamined default.

If you hate accepting real-world tradeoffs, analyze the trade-offs you’re currently living with. If you need to feel like you have more data before you make a decision, realistically assess whether you have enough data to support not making the decision. If you don’t want to offend people, take a dispassionate look at whether all the people who work for you will be more unhappy if you make a decision, or more unhappy if you don’t.

In other words, is the status quo really okay? Is it really better to delay making the decision?

4. Decision fatigue is real

It took me a long time to recognize that making decisions is actually tiring. I make worse decisions when I have to make a lot of them. It turns out there’s research about decision fatigue.

Michael Lewis wrote a very entertaining profile a few years ago of President Obama, in which Obama is quoted as saying, “You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”

Some people try to schedule their most important work in the morning. (President Obama probably didn’t have that luxury.)

I suspect that different strategies work for different people. The main thing is to know that there’s some utility in thinking about your brain as a little bit like a muscle that can get tired.

5. You don’t have to make every decision

There are lots of decisions at your startup that you probably don’t have to worry about, yourself.

I’m a grumpy, nit-picky, curmudgeon. So my natural inclination is to have an opinion about our company’s furniture, what color the walls are painted, how big the logo stickers are on the bags of coffee we gave away at events last year, and whether our house style guide specifies using the Oxford comma.

But Daily.co is my third startup, and these days I try to make as few decisions as possible. Partly this is because I think decision fatigue is a real thing, for me. Partly it’s just that I’ve tried to get good at ignoring as many distractions as possible. And partly I’ve become moderately obsessed with empowering other people to make decisions, for the reasons described in the next section.

(And of course we use the Oxford comma. We’re not animals.)

6. The more decisions other people make, the healthier your company is.

If you’re the only person who works at your company, you should make all the decisions. As soon as you start hiring other people, though, your goal should be to make as few decisions as possible!

Camille Fournier, in a post about management and decision-making, writes:

“the role of leadership is in fact to make as few decisions as possible, and to make the decisions that you are forced to make utterly mundane.”

That post is terrific. As is everything else on her blog. As is her book, The Manager’s Path.

Over the years, many people reporting to me have felt that I micro-managed them. And they were right.

Learning not to micro-manage was a long process, for me. But I gradually came to understand that when I felt I needed to step in and “help” make a decision, that was a symptom of not having done a good job with hiring, communications, process, or all three.

If you hire good people, and you communicate well, and set up good processes, then the people who work for you will make good decisions.

These things — hiring, communication, and process — are all hard. But as your company grows, they are all critical. In fact, they are the three things that define the job of management.

A good manager is a person who manages people who make good decisions. Even in the face of uncertainty. :-)