Overcoming Irrationality

Seems like a lot of decision-making going on these days makes little sense.  Government, corporations, individuals… not that they/our decisions ever made much logical sense before.  

I bring this up because I just finished an interesting book that deals with irrational behaviors and gives some very startup relevant observations.  In case you didn’t know, I’m a little bit of a bookworm.  Scratch that, I’m the kind of bookworm that actually got grounded from books when I was a kid.  All embarrassing revelations aside, I really enjoyed one particular part of this book that talks about how sticking with past commitments can be irrational.  The book by the way is written by brothers Ori and Rom Brafman and is called “Sway: The Irresistible Pull of Irrational Behavior”. 

In the epilogue, Ori and Rom talk about Intel and the 1985 decision made by CEO Andy Grove and cofounder Gordon Moore to get out of memory chips and into microprocessors.  The turning point came when Grove asked Moore “If we got kicked out and the board brought in a new CEO, what do you think he would do?”.  Moore answered with no hesitation that “He would get us out of memories”.   It’s pretty easy to see the logic when put that way.  Do nothing and die or do something and see what happens.   Maybe the stat that 50% of all VC backed CEO’s get fired in the first year after investment could be skewed a little if we all started thinking more along these lines.  There are some other tips in the book on communicating with VC’s if you’re interested.

That’s it for my poolside deep thoughts (this was actually written on Sunday).  

Update on the fund:  We start “officially” fund raising this week, so don’t screen my calls and project some good thoughts our way.

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