Don’t let the noise of other people’s opinions drown out your own inner voice ~ Steve Jobs
Lately, I’ve been advising several women starting their own companies and thinking about being back in the start-up world and what tools and experience I rely on the most having done this twice before. Given that my new company is all about using data to make better decisions, I thought it would be apt to start with something that is distinctly non-data driven – looking beyond what logic and data might miss in building a business: trusting your intuition.
Some people think of intuition as a mystical power or just a matter of lucky guesswork. Quants say we use intuition because of our cognitive limitations. It is a strategy of last resort, employed when we can’t use expected utility theory (optimal weighting and computing of all relevant factors). My dad says all his best ideas happen in his “sub” (his subconscious). But some scientists say it’s a real ability that can be visualized on brain scans.
No matter how you look at it, it’s no doubt one of the most important skills we have as entrepreneurs and I routinely use it as a guiding principal in business and in life.
Entrepreneurship requires risk taking and frequent forays into the unknown. Not knowing where your next paycheck is coming from, putting your ideas and products out into world, and having to make critical decisions on a regular basis that can make or break your company are all typical situations we as entrepreneurs face – particularly those who choose to bootstrap their companies.
When you have to make dozens of important decisions everyday around hiring, firing, product development, pricing, partnering, legal, etc, at some point you need to learn to trust your instincts. Take in all the information you can gather, listen to proposals, ideas and advice. Then go with what your heart or gut feels most strongly. Afterwards, have the ability to quickly assess the implications of those decisions based on real data and quickly change course if the decision was wrong. As time goes by, your discernment will get honed and it will become a secret weapon.
Of course you remember the times when you didn’t follow your intuition and things didn’t work out most vividly. For me, one of those times was just before we signed the documents to take a Series A investment for my previous company. I can recall sitting in my office and our VC representative sitting in our conference room with Chris (co-founder and CEO) and others playing referee as negotiations got heated. I was ready to call it off. Everything in my body was telling me that this was the wrong decision – that I didn’t have enough information or advice to make the right call. That our lawyers were not on our side and the term sheet wasn’t as we discussed.
The fear of stagnation, or of letting down our staff, or of having to go through the fundraising process all over with another firm, or of all of these things stood directly in the way of me trusting my instincts. We signed the documents. We drank champagne. A year later, through covert maneuvering, the VC and his Board appointee ousted Chris and inserted the Board appointee (part of the good old boys club) as the CEO of our company. It went downhill from there as they were able take complete control by having majority board seats and dilute our majority ownership by taking more money from same VC at a manufactured low valuation.
Meanwhile, we were forced to sit idly by as our investors and their cronies run our company. Now, the chances of us ever seeing a return on our 10-year investment are extremely low. But most upsetting isn’t about the money – it was about losing what we built through passion and dedication for our work, our clients and our colleagues. It was seeing a mission-first company turn into a money-first company and fail because of it. It was knowing it was the wrong decision and making it anyway.
But, part of being an entrepreneurship is also being able to look back at your mistakes and learn from them quickly. Fail fast, as it were. Don’t be afraid of taking a wrong turn.
This time around, I’m re-learning how to trust my instincts and trying to help others I advise in start-ups to trust theirs as well. What I do know is this: the more you listen to, discern, and act on your intuition the more feedback you’ll receive and the more you’ll learn. The more you learn, the better your chances of success.
“The intellect has little to do on the road to discovery. There comes a leap in consciousness, call it intuition or what you will, and the solution comes to you, and you don’t know how or why. ” – Albert Einstein
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