How serial entrepreneurs make decisions
The expert entrepreneurs think in terms of control, not in terms of uncertainty
If you have a problem: Do you socialize it or try to find the “perfect” expertise to solve it?
Doing the latter seems more efficient, but it is not. If we talk with whomever about our problem at hand, we achieve a solution more quickly. This is due to 2 reasons.
First, our assumption of who is an expert and who knows something is often not right. Hence, we waste a lot of time identifying, reaching out, and talking to people that cannot provide us directly with the solution.
Second, socializing your problems harnesses network effects: Every person in your network has multiple people in their network. Asking another person whether they know someone who could help you makes you reach hundreds of people in a short amount of time.
Successful founders tend to apply effectual decision-making
1 principle of effectual decision-making is seeking out mutually beneficial partnerships with anyone who is willing to commit to the project
These self-selected stakeholders have a high level of commitment to the project
If you have a problem, ask anyone you know for advice and help with the goal to obtain their commitment
Make it a habit to seek at least once per week a person for support, asking for a favor
The principle of socializing a problem is related to a Coursera course on how entrepreneurs make better decisions I’m currently enrolled in.
The theory underlying it is called Effectuation and was researched, developed, and taught by Saras Sarasvathy. It assumes that founders have to make decisions under uncertainty where even the outcomes are not known (uncontrollable unknowns).
Sarasvathy developed the theory based on interviews with successful serial entrepreneurs in which she examined their decision-making behavior. Based on her observations, she derived patterns and similarities that she boiled down to the 5 principles of effectual decision-making.
1 of these principles is the Crazy Quilt Principle. It implies seeking out mutually beneficial partnerships with anyone who is willing to commit to the project.
Instead of searching for and seeking out only the people you think are best suited, you talk with anyone about your project, talk about your current problems, and ask them to commit to helping you to overcome your challenges. Thereby, you let them self-select so they become self-selected stakeholders.
Self-selected stakeholders are attracted to the project for a variety of reasons, such as the opportunity to make a positive impact, the potential for personal or professional growth, or the chance to be a part of something innovative and meaningful.
They have a high level of commitment to the project, as they have chosen to become involved of their own accord, rather than being sold or assigned to the project by someone else. This can make them particularly valuable as they are likely to be invested in the success of the project.
Risk and downsides
As I’m currently trying out the Crazy Quilt Principle, I’m also aware of the risks and downsides:
Lack of focus: New capabilities are added at the moment as needed (ad-hoc) without a clear long-term plan, causing long-term inefficiencies.
Lack of cohesion: By adding new stakeholders ad-hoc, a project may end up with unrelated people that do not work well together, hindering its effectiveness.
Limited scalability: The nature of the crazy quilt principle makes it difficult for a project to scale up. A more comprehensive, forward-looking plan is better able to support growth.
In the next few weeks, I will have tried out the crazy quilt principle multiple times. I will share with you my learnings through these experiments.
Until then - how do you make decisions? And do you usually broadly ask your friends and family for help? I’m curious to hear about your experience!
All the best to you and yours,