Decision-making is choosing one option over all the other possible options. Every great decision directs us towards success, every bad/no decision away from it.

Startup journey is a series of decisions under uncertainty. Success requires the ability to choose direction and act with speed and conviction despite limited information.

“In any moment of decision, the best thing you can do is the right thing, the next best is the wrong thing, and the worst thing you can do is nothing.” - T. Roosevelt

4 steps towards a scalable decision-making system

1. Get major decisions right

<aside> 👉🏻

Make 3 make-or-break decisions intentionally

</aside>

All decisions are interrelated, and 3 upstream decisions pre-determine most subsequent decisions. Intentionally decide (1) where, (2) with whom and (3) what to build and scale. The rest will depend heavily on these three decisions.

1. Location; where to be based physically. Good companies can be built anywhere, but venture-scale outcomes are geographically heavily concentrated. Choose top-tier hubs with high talent, capital and customer density (e.g. SF for AI). Surrounding ourselves with understanding and supportive people can significantly increase our chance of success.
2. Who to work with; co-founders, early employees, early partners. Earliest partners can make or break our outcome. Choose people with highest compatibility, complimentary high competence and high integrity. Great people bring great people. It only takes one bad hire to ruin the culture. Only work with the greatest.
3. What business to build. The decision on what we build and sell will decide our identity. And the category others place us in will determine whether others will want to work with, invest in, and partner with us. Choose to build a business that is a must-have, scalable and true to ourselves. This will help with resilience in bad times, while attracting great talent, capital and customers.

Once these three decisions are made, everything else (e.g. strategy, milestones, timing) will fall onto its places. Other important aspects like hiring, fundraising and sales will depend heavily on these three major decisions. Making, and remaking, these three decisions well can heavily compound towards success.

2. Frame well

<aside> 👉🏻

Automate decision-making process through frameworks

</aside>

Deciding on decision-making. We make many decisions everyday, but the majority can be automated. Set frameworks to automate most decisions and decision-making processes. With frameworks in place, we can make decisions reliably with speed, without feeling-based calls or paralysis.

Set decisive first-principle filters in SoT. Make a few first principle filters (e.g. ”customers first”, “move fast”) to shortcut decisions. Clarify our priority focus/ North Star metric so that when faced with choices, anyone can make the right call consistently. As we scale, compile and document each decision making threshold so new hires/ AI agents can follow accordingly.

Quantify. There are just too many choices. Use ICE framework to compare and prioritize quantitatively. Impact (how much will this help the business?), multiplied by Confidence (how probable is this?), divided by Ease (how much resource will this take?). Impact is rarely linear, so use non-linear scale (e.g. cumulative $ impact in the future, not 1-10). There are many variations of ICE, but try ICE first and customize as needed.

Time-bound. We often take far longer time than needed to make a decision. In the world full of uncertainty, we cannot possibly have 100% information. Decide as soon as we have most info (e.g. Bezos’ 70% Rule). Most decisions are reversible (we can go back on our decision and still be okay). Minimize decision latency (the time it takes from realizing the need to actually making A decision) to as little as possible. Use time constraints to make difficult decisions (major decision reversal) as well. Remove sunk cost (”we already put in too much time/capital”) by setting a time limit in advance.

RAPID for collective decisions. As we scale, decision making often gets slower and worse. Use RAPID Framework to facilitate clear decision making. Define roles in advance (who will Recommend, Agree, Perform, Input, Decide), record in writing each action and reach a collective decision. Clarity and documentation increase accountability and speed of decisions.