Avoiding Bad Decisions

There is a lot of great literature about making good decisions.

I’ve found the inversion to be more helpful. To make better decisions, simply make fewer poor decisions.

One of the reasons I like thinking about it this way is that it’s hard to know when you’ve made a good decision. Many of the best decisions are contrarian and not obviously correct a priori.

There exist many patterns around good decision-making. However, I find it much easier to identify the anti-patterns associated with bad decision-making.

Here’s my list:

1. Fear

   
   This is the most common reason I’ve seen founders make bad decisions. We’re afraid of losing our companies. So we go out of our way to protect them and often take risks that we shouldn’t be taking. We risk everything trying to save something that never really could have been kept in the first place.
   
   I’ve encountered fear many times over my founder journey. Every time I acted upon that fear, it was the wrong decision. I’ve made and have seen others make the same fear-driven mistakes:

   • Over-conceding to save your most negative customers that were going to churn inevitably in the first place

   • Over-promising prospective customers features that aren’t in your roadmap on a schedule that isn’t possible

   • Over-committing to retain your high-performing jerks and hoping against reality that they’ll change for the better

   
   Fear begets fear. When you act on your fear, it becomes easier and easier to focus on the short term at the expense of the long term.
   

2. Control
   
   I like to think about control as institutionalized fear. When we’re afraid over a long period, it’s natural for us to start to develop control mechanisms to manage that fear. Some of these methods are beneficial to the company, and some of them are not.

   
   As a founder, you regularly face problems that seem impossible. There’s a strong incentive to manage the information around those problems rather than the problems themselves.
   
   I’ve seen this anti-pattern happen in companies that have yet to develop a repeatable sales motion and want to maintain a certain narrative. So they clamp down on sharing information.

   
   For example:

   • Only the sales team and executives know about the sales pipeline.

   • Only executives know about the financials.

   • Only the founders know details about fundraising.

   When no one knows what’s happening in the company, the results will show up in your performance. [1]
   

3. Lonely and Tired
   
   I have an acronym that I abide by — HALT. It stands for “Hungry, Angry, Lonely and Tired” and is an excellent, consistent indicator of when you should NOT be making any critical decisions.
   
   It’s relatively easy to know when you’re hungry or angry. But when you’re lonely or tired, it’s not always so obvious. In the worst case, we ignore these feelings much longer than we should until something bad happens.

   
   I know a founder who gave up on his company - because he was lonely and tired. He had been working on a meaningful mission and gaining the traction that others would dream of. But a few months after raising a large Series B, he returned the capital to investors and shut down his company.
   

   His reason: he was lonely and tired. He had burned out of operating the company, and as the sole Founder/CEO, there wasn’t anyone available to replace him. [2]
   
   It’s hard to ask for help, especially when we need it the most.

[1] This is also why I care so much about making Anomaly transparent, especially in the earliest stages when the team is small.

[2] This post is about making bad decisions, and stepping down from your own company in this situation isn’t a bad decision. I think the bad decision is not developing a capable successor who can keep the dream alive.

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