Decision Making 101

Roy Disney“It's not hard to make decisions when you know what your values are.” 
Roy Disney, American Entrepreneur

I recently gave some advice to a software engineer who was trying to decide between two startups. My advice is was not earth shattering, but the engineer was appreciative nonetheless. He must have read my Thank You entry, as he later sent me an awesome selection of beer and wine as an expression of his gratitude.

I have summarized my straightforward counsel below, in the hopes that it might help someone else who is in the advantageous position of selecting between multiple startup opportunities.

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Theoretically, the engineer had been working three days a week at Startup A and two days a week at Startup B, for the past year. In reality, his hellacious workload encompassed seven days a week. Startup B had recently asked him to join full time, as their VP of Engineering. If he accepted the position, he would have to terminate his long-standing relationship with Startup A.

The decision was difficult for a number of reasons. For one, the engineer was one of a handful of employees at Startup A and he knew the team would suffer a significant blow if he departed. The company was struggling and it would be a challenge for them to bring in a new developer who could readily build upon his partially completed codebase.

In addition, he had taken a pay cut at Startup A in 2009 and was accruing a note payable equal to his back pay. He was concerned that he might never be paid if he left. Conversely, although it was in an exciting space with tremendous promise, Startup B was nascent and faced significant execution risk.

Free Advice Worth Thrice The Price

It was against this backdrop that the engineer was evaluating which adVenture to join full time.  My advice was as follows:

Lady Luck Not, “I am stuck” – You are lucky, as you have two viable options from which to choose in an economy in which many people are suffering. You can only base the decision on the facts you currently have, thus do not be concerned about subsequently second guessing yourself. If you diligently gather the facts and evaluate them in an intellectually honest manner, then you will have made the “right” decision, irrespective of the ultimate outcome.

Learning Not Earning – As described in Advice For Anyone Else With A Boss, determine which opportunity will allow you to learn the most, based on presence of the following elements:

  • Team has a track record of success
  • Team is willing to tutor you and share their knowledge
  • The industry is dynamic and is likely to grow significantly in the near term
  • The opportunity will allow you to address challenges you have not faced previously
  • The corporate culture supports employees taking on as much responsibility as they prove they can handle

Experience Not Resume Building – Do not worry about building your resume and do not obsess about your title. As noted in Entrepreneurship Is Best Learned Experientially, startup careers are built upon experiences. Thus, select the opportunity that will provide you with experiences that are widely transferable across industries.

Heart Not Head - Rationally list the pros and cons associated with each company and then tear up the list; look into your heart and ask yourself which opportunity you want to pursue, rather than which opportunity you should pursue.

You Not Them – Do not focus on what others want you to do, they do not have to live with the consequences of your decision. 

Upside Not Downside Mitigation – Although financially significant, your accrued pay is best viewed as a sunk cost. It should not influence your decision, as you will ultimately create more wealth by pursuing the most lucrative future endeavor rather than attempting to salvage compensation associated with your legacy efforts.

Once the engineer viewed his options through the lens of my humble advice, his values came into focus and his decision became obvious. He elected to take the VP of Engineering position with Startup B. Although it has only been a few weeks, I recently exchanged emails with him and he indicated that now that he is working fulltime at Startup B, he is surprised that his decision was initially so difficult.

If you are relatively early in your career, like my engineer friend, then one of your primary professional values should be gaining extensible experiences upon which you can build a successful career. Thus, selecting a job opportunity based upon the potential to learn and grow professionally should be one of the values underlying your decision. Following Roy Disney’s guidance, if you first invest the necessary time to define your values, many of your subsequent decisions will seemingly make themselves.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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