Mastering Decision Making

The Asymmetry of Decisions

A founder's job is not to write code, design logos, or balance spreadsheets. A founder's job is to make decisions. Specifically, you are paid to make high-stakes decisions with severely limited information.

Jeff Bezos famously categorized decisions into two types: Type 1 and Type 2. The inability to distinguish between the two is why most startups paralyze themselves with bureaucracy.

"Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow." — Jeff Bezos

Type 1 Decisions: One-Way Doors

These decisions are highly consequential and practically irreversible. (e.g., Selling 30% of your company to a Venture Capital firm, signing a 10-year commercial lease, naming your core brand).

For Type 1 decisions, you must move slowly. You must gather as much data as possible, consult experts, sleep on it, and run a [Pre-Mortem](/risk-management). If you walk through a one-way door and realize you made a mistake, you cannot easily walk back out.

Type 2 Decisions: Two-Way Doors

These decisions are easily reversible. (e.g., Changing the color of the "Buy" button, launching a new marketing campaign, hiring a freelance designer for a week).

For Type 2 decisions, you must move with reckless speed. You do not need committee meetings or 40-page strategy decks. Make the decision, walk through the door, and look around. If you don't like it, you simply walk back out and reverse the code. Optimizing for speed in Type 2 decisions is the ultimate competitive advantage.

Step-by-Step: The 70% Decision Framework

1. Step 1: Gather Baseline Data: Collect the information immediately available to you right now.
2. Step 2: Hit the 70% Threshold: Do you have roughly 70% of the information you wish you had? If yes, stop researching.
3. Step 3: Decide and Commit: Make the choice firmly. Indecision is a tax on your startup's velocity.
4. Step 4: Course-Correct: Because you only had 70% of the data, you may be wrong. Stay agile and pivot if the remaining 30% proves your thesis incorrect.

Decision Fatigue and Systemization

The human brain has a finite amount of high-quality [decision-making](/decision-making) energy every day. This is known as Decision Fatigue. If you spend your morning deciding what to eat for breakfast, what clothes to wear, and what font to use on a presentation, you will have no cognitive energy left to decide whether to pivot your business model at 4:00 PM.

Elite founders systematize the trivial to reserve processing power for the critical.

• Automate: Eat the same breakfast. Wear the same style of clothes (Steve Jobs' turtleneck).
• Delegate: Empower your team to make all decisions that cost less than $500 without asking your permission.
• Schedule: Make your most critical Type 1 decisions before 10:00 AM when your cognitive battery is at 100%.

The Regret Minimization Framework

When faced with a terrifying, life-altering decision (like quitting a $150,000 corporate job to start a company), the human brain naturally defaults to fear minimization. We choose the safest, most comfortable path.

To make massive entrepreneurial leaps, you must use the Regret Minimization Framework. Project yourself forward to age 80, sitting on your porch, looking back at your life. Will you regret quitting your job to try building a company, even if it failed? Probably not. Will you regret staying in your cubicle and never knowing if you could have succeeded? Absolutely.

When you optimize for minimizing long-term regret instead of minimizing short-term fear, making bold entrepreneurial decisions becomes incredibly easy.