Missteps in business are costly--they drain time, energy, and money. Of course, you certainly don't start projects with the intention to fail. Yet, how often are you relying on (perhaps unknowingly) riskier decision-making approaches that put your company at risk of floundering?

Here's the thing: It's dangerous to call shots based on gut feelings or reasoning plagued by cognitive biases. The more reliable decision-making approach is research. Well-planned experiments that lead you to data-backed decisions; this is the antidote to faulty intuition.

What perils does your startup face if you rely on intuition to push forward? What might you gain if you chose to rely on an evidence-based approach?

My colleagues and I at Duke's Center for Advanced Hindsight have explored these questions alongside the startups we work with through our behavioral science incubator, the Startup Lab. As our entrepreneurs embrace the "test everything" mentality we teach, they begin to adopt a greater distrust of their intuition when it comes to making decisions for their company.

Consider how these two approaches might play out in the development of a product from ideation to launch. Suppose you're working on an app that connects consumers to savings accounts to help them save for retirement. You need to decide how your product will achieve this. Let's compare your company's development when using an intuition-backed approach versus a research-backed approach.


With the intuition-backed approach, your company assumes that access to information on how to save money will encourage users to increase their retirement savings. You've heard similar sentiments echoed in focus groups. So you build an app that provides a regular feed of saving tips.

Meanwhile, using a research-backed approach starts with a hypothesis rather than an assumption. Your company is interested in building two mechanisms, social accountability and reminders, into a base app. You hypothesize that social accountability--notifying users' friends and family of successful savings--will encourage users to save more than will reminders. Then you preset a decision: your company will test the two versions of the app, and if social accountability proves to increase retirement savings more than reminders, then you will build that feature into the product.

Tech Development

With an intuition-backed approach, your company spends six months developing the perfect saving tips platform. With the research-backed approach, your company spends one month building two simple app versions to test against each other (and spends much less money in the process).

Product Testing

With the intuition approach, your company does a few weeks of user testing to check for glitches. Alternatively, with the research approach your company runs a quick experiment over a few weeks to confirm which mechanism is more effective.


In the end, the intuition approach launches an app that no one is all that interested in using. On the other hand, with the research-backed approach your company confidently launches after confirming which version is more effective and beneficial for your customers.

With the intuition approach, your company guessed at an adequate savings product, and allowed the opinions of a few to confirm your intuition. With the research approach, your company designed an experiment and used data-backed insights to determine the direction of your product. You have deliberately discovered an effective product that engages users, and have done so with less time and money than the intuition approach.

An evidence-based approach to business decisions has impactful implications for the efficient success of new ventures. If you can learn to identify concrete decisions needed to move projects forward, and set up experiments that directly inform those decisions, then you can avoid much of the painful time, energy, and costs of mistakes.

Published on: Feb 26, 2018