Steve Blank had a great post last week about speed and tempo in startup decision making recently where he says:
… think of decisions of having two states: those that
are reversible and those that are irreversible. An example of a
reversible decision could be adding a product feature, a new algorithm
in the code, targeting a specific set of customers, etc. If the
decision was a bad call you can unwind it in a reasonable period of
time. An irreversible decision is firing an employee, launching your
product, a five-year lease for an expensive new building, etc. These
are usually difficult or impossible to reverse.
My advice was to start a policy of making reversible decisions
before anyone left his office or before a meeting ended. In a startup
it doesn’t matter if you’re 100% right 100% of the time. What matters
is having forward momentum and a tight fact-based feedback loop (i.e.
Customer Development) to help you quickly recognize and reverse any
incorrect decisions. That’s why startups are agile. By the time a big
company gets the committee to organize the subcommittee to pick a
meeting date, your startup could have made 20 decisions, reversed five
of them and implemented the fifteen that worked.
I think this is great advice.
Entrepreneurs will find that almost all of their decisions are
reversible. As a result, good operators get into the habit of making
decisions quickly even with incomplete information. Entrepreneurs make
1000s of reversible decisions per year.
On the other hand, VCs will find that almost all of their decisions
are irreversible. You can’t really “ask for your money back” once
you’ve made an investment. This is one reason that fundraising can take
so much time and effort for entrepreneurs. VCs want to know as much as
they can before making a decision. VCs make one or two irreversible
decisions per year.
That’s a big difference in decision making style
(For more from Jeremy, visit his blog)
(Image source: itsanentrepreneursworld.com)
