It's crucial you make the right decision so you analyze the data, weigh your options and crunch the numbers. Often, however, you'll find yourself stuck in a bog of analysis paralysis, unable to pick the best next move. You need a dose of intuition to clear your way, but how do you know when to stop thinking and just follow your gut? It's especially problematic for technical types accustomed to mapping, calculating and coding things into perfect fruition, but the reality is entrepreneurship is by nature rife with uncertainty. Everything is a moving target--your competitors, your team, even your own products and services which must continually evolve.
The good news: Following your gut to make better decisions is a skill anyone can master to choose the right way. That's according to Arun Agarwal, CEO and co-founder of Cambridge, Massachusetts-based Infinio, a startup founded in 2011 which has raised $24 million from top-tier venture capitalists who believe in its software solutions for increased virtual storage performance. Here's what he says entrepreneurs need to know about making solid decisions based on intuition.
At some point the cost of getting more data outweighs the benefit.
Entrepreneurs often spring from highly analytical backgrounds--engineering or programming, for example--where logic is king and data can be mined for a seeming eternity. But at some point you need to stop somewhere in the middle of winging it and overanalyzing something to death and determine how much time or money it will cost to get more information with which to make a decision. "I think the trick is trying to understand what's the cost of getting to that incremental piece of information and what's the benefit of it, and having that formula clear in your head," he says.
Usually, you'll hit the sweet spot of having enough information earlier than you think.
It's a matter of applying all your cumulative experience to the situation directly in front of you. "When you're trying to make some decision and it's time to trust your gut I think the body of information that comes from your past experience in the business tends to be pretty high relative to the amount of new information you can go out and discover," he says. "In most cases there's less to go out and learn than you might think."
Your decision doesn't have to be final.
A startup's beauty is in its ability to move quickly, so just decide, knowing you can change course at any point. For instance, imagine you have 10 percent of the data and you could get to 15 percent but it will take three more months to get it. Instead, why not decide now and get 75 percent of the data you need by seeing how it plays out? "I think one trap entrepreneurs fall into is, 'Well, I'll make this decision and then the whole world will fall apart," he says. "Most things are undoable."
When unsure, it's crucial to immerse yourself in the details.
Just because you're in a leadership position doesn't mean delegation is in your best interest. Instead, when dealing with uncertainty make sure you're looking at what's happening at all levels of your company, which is different from micro-managing. "It's about staying close enough to the data so that [you] know what's really going on," he says. "And of course the trick is not losing the forest for the trees. So you have be able to move in and out of the details quickly."
There's a reason people trust you.
Most leaders running companies are where they are because people believe their judgment is solid. "It's easy to lose perspective of the fact that you're more likely to be right than wrong," he says. "That might just be a way of saying, you have to just have a little confidence, too."