Think different: How an entrepreneur makes decisions to go camping

Wallace Falls. Photo via Jessie Hey

Entrepreneurs have an interesting perspective on decision-making. For one, they do a lot of it. But moreover, I believe they tend to think about opportunities differently than most people.

This applies to the big decisions that make or break a company, as well as the day-to-day decisions that we all face.

In this post I’d like to use one small decision my fiancee and I recently faced to highlight some of these differences. I hope you find the lessons useful, and even start thinking differently about some of the decisions you face in your life.

Inspiration

We woke up late one Saturday, the sun was shining, and we had a random thought: Let’s go camping.

The thought started out as the type of day-dreaming we all do (“Wouldn’t it be great if…”) but we quickly started taking it seriously. We had been wanting to hike Wallace Falls and so we did a few web searches and this is what we learned:

  1. Wallace Falls is one of the most popular, busiest parks in the state
  2. The park has two tent sites, which are available first-come, first-served

The combination of the two left us worried over whether we’d have a real shot at getting a spot. On top of that, it was already 10 a.m. We obviously hadn’t gotten our camping gear together, and it was easily the sunniest day of the year.

We faced a decision. And here’s where I abstract a bit, because this is a decision much like the types an entrepreneur faces all the time. Essentially, we were late to the game, just getting started, and going after something in a hot space.

Doubt & Decision Trees

When faced with a seemingly low-probability proposition, its natural to feel doubt. We talked about how there are probably hundreds of people going to Wallace Falls that day, and that the odds have to be slim that by the time we got there one of the two spots would still be available.

One way to represent our thought process is with a decision tree, like the one below.

While there’s a lot of notation behind decision trees (here’s a free primer), the basic concept is quite simple. Basically there are decisions and there are outcomes. Each outcome has a value or utility.

For example, if we decide to not go camping the value is 0, we really didn’t lose anything nor did we gain. If instead we decide to go camping there are two possible outcomes, each with its own probability of occurring: either we get a spot (value +10 for the resulting good times) or we don’t (-2 because of the let down, lost time, expenses, etc.).

Now the expected value (EV) of deciding to go camping is actually negative here. 95 percent of the time we’d get -2, 5 percent of the time we’d get +10, so on average we’d get -1.4. Given that the EV of deciding not to go camping is 0, and 0 &; -1.4, the rational thing here would be to not go at all.

That’s how most people would think through this problem, and that’s why most people wouldn’t go. Just like most people don’t roll the dice on a new venture.

So what about the people that do? Are they just irrational? I’m going to claim no. They just operate under a different set of core assumptions. Here are the tweaks that an entrepreneur would make to the decision tree:

Don’t Overestimate the Competition

We only gave ourselves a 5 percent chance of actually getting a spot, reasoning that hundreds of other people are also coveting the campsite. An entrepreneur thinks the odds are actually significantly better.

He recognizes the difference between an idea and execution. While hundreds of people probably had a similar idea, he believes that most end up not taking any action.

One simple way of thinking through this is that if everyone used the assumptions in the decision tree above, then the campsite would remain empty. An entrepreneur factors in this paradox into his assumptions. With regards to the decision tree, I’m going to up our chances from 5 percent to 10 percent that we get a spot.

Factor in the Cost of Regret

The rewards of camping. Photo: Pejman Pour-Moezzi

The next assumption he would disagree with is that the cost of not doing something is zero (i.e., not attempting to go camping). There’s a real cost to constantly telling yourself no, and not chasing your dreams.

Jeff Bezos formalized this into something he calls the “Regret Minimization Framework” and used it to rationalize his decision to leave his well-paying job to start Amazon.

When you’re 80 and looking back on your life, what are the moments you’ll look back on with regret?

You will probably find that the moments you tried and failed hurt far less than the moments when you did not have the courage to try at all. An entrepreneur minimizes the number of regrets in his life by recognizing that there is a real cost to not doing something. With our specific example, a day of camping is admittedly not something with a high regret cost, so I’ll just lower the value of doing nothing from 0 to -0.1.

Minimize the Cost of Failure

A good entrepreneur practices a healthy dose of pragmatism. Even with the assumptions above, there remains a high probability of failure. An entrepreneur recognizes this and finds ways to minimize the cost of failure.

In the tech world, there are methodologies, like the Lean Startup, that help entrepreneurs setup a process to achieve just this. With our camping example, there were some simple things we could do. For example, instead of buying the perishable camp food right away, we could decide to wait and buy the food only if we got the campsite. I figured that would lower the cost of failure from -2 to just -1 on our decision tree.

Putting It All Together

While each of the changes above appear minor, taken together the resulting rational decision actually flips.

Now the EV of going camping is +0.1, while the EV of not going is -0.1. This was the decision tree that we ended up using that morning, and so at 12 p.m. on the sunniest day in Seattle, we brashly made our way to Wallace Falls in a car packed with camping gear.

When we pulled up the parking lot was packed. We were forced to park a few blocks away and had to carry our gear towards the campsites. Honestly, there was a moment of feeling foolish, but in the end who cares? At worst we would put the tent back into the trunk and just take a day hike.

We turned down the final path, and to our giddy surprise we found both campsites open. We quickly pitched our tent, got some food to grill later that night, and went on a beautiful hike.

Later that night, while enjoying the campfire, I couldn’t help but look over at the other campsite. It was still empty.

Conclusion

You may say that we were just lucky in the story above, and in a way you’re right. But that’s what entrepreneurs do — they take calculated risks. They look at opportunities slightly differently than most, and are compelled to act when most wouldn’t.

 

The next time you’re faced with a tough decision, you might try adopting an entrepreneur’s perspective. You might be surprised just how much it changes things.

Pejman Pour-Moezzi is the co-founder of a to-be-announced startup in the Seattle area. He was previously a Product Manager at Bing, and a co-founder at Magoosh. You can connect with Pejman via emailTwitterLinkedIn or his blog.

  • Perscors

    Can you just wake up, go camping and have fun? The corporate mind scares me.

  • Johnny Guru

    I do A/B testing whenever I decide to take a shit. The “average” person would just squat and unload their bowels but there’s nothing average about me. Given that the EV of me NOT pooping for the last few quarters (linked to a few indexes I use and will talk about further in an ebook I’m publishing with Harper Collins in the fall) has been really as close to as sure of a thing as death and Apple’s reality distortion field, I have successfully not shit for 13 weeks now, and am a skeleton as a result, because I died from the great business ideas and also not pooping. I’m literally a dead skeleton, walking the earth, my only organs my impacted feces. Check out my Klout score and the blood hex 666

  • Eric Jain

    The entrepreneur just goes for it and pivots to another camping area if the first one doesn’t work out. If you’ve got the talent there’s no shortage of (camping) opportunities. Or you can camp in stealth mode :-)

  • TK

    Did you calc the EV before going or justify going and writing this article by doing the math to rationalize your decision?  Either way, I liked the article; just wondering.

    • pejmanjohn

       Thanks for the question, TK.

      My intention was not to suggest that people should be drawing out decision trees and calculating EVs before making any decision. I appreciate the jokes on that, and agree that it would be overkill.

      Really my point was that entrepreneurs are inherently risk-takers. And that this risk-taking is not irrational or crazy, its actually just grounded in different assumptions. I was simply using the decision tree to concretely walk-through some of these assumptions and how they might change what you decide.

      So to answer your question directly, no, I did not draw out a decision tree before driving over to Wallace Falls that day, but I did use arguments like “Don’t Overestimate the competition”, “Factor in the cost of regret”, and “Minimize the cost of failure” to justify the decision to myself and my fiancée.

      • http://www.startupbusinessloans.com/research/ Sophia Anne Walker

        Wouldn’t it be more risk taking if you went para gliding, or parachuting, or wind surfing? At least there is more danger and risk to the activity than merely camping? Business would have been missed after doing some adrenaline pumping activity, right?

  • Rfa Desert

    Hope you enjoyed your hike and overnight. While minimizing risk is critical, gathering relevant data and considering influential variables is also important. Asking the right questions is the first step in decision making, not weighting their answer.How often are those sites filled? What does the hiking population expect from that destination? How many of the hundreds who trek to Wallace Falls are day hikers v overnighters? Asking the right questions increases the likelihood of a positive outcome. Step one is ascertaining the critical variables. Time of day is less important than historical usage. Most folks don’t want to overnight at such a high traffic trail. One of the appeals of Wallace Falls is its easy access for a quick day hike… Your outcome was preloaded for success simply because folks don’t overnight at the Falls. As for entrepreneurs and how they think? They often need a reality check from those who are linear thinkers because the first question is always, “Who will buy it?” Not, “will it work?”

  • Harrymatlay

    You assuem that you know what is, and how thinks, an entrepreneur: you don’t – and generalise from a sample of one !!! Big deal… Most of us do what we do and enjoy doing it, without all that bulls droping decision making crap…!!!

  • Mark Illing

    Nicely done.  I fear now, however, that the camp sites at Wallace Falls will be swamped with entrepreneurs that have read this and learned that they typically go unused.

  • Peter H

    Really should have picked a more interesting decision … this level of analysis of whether to go on weekend campout reads like a parody of this site.

    If you really are this anal about deciding whether to go camping, I suggest for your next camping trip you head downstate to the Northwest Vipassana Center and pull back the zoom lever ….

  • http://twitter.com/marycray Mary

    Thought this was a fun read. As someone who constantly dives into start-ups some of this resonated.

  • Anon

    Wait. I thought this was referring to founders. Wouldn’t a founder just wake up on a Saturday and be like “camping? Are you high? I’ve got work to do”. And then just be on with building the business while the fiancé groans.

    Partially kidding…