Published in the San Diego Union-Tribune, August 6, 2018
One of my clients took me to task recently by suggesting that I have filters as to people and how I judge them — i.e., to hire them, to coach them, to invest in them, etc. We all do. Human beings make decisions about things and people using all kinds of heuristics, along with our own pattern recognition and known and unknown biases. The theme from my client was that if the person did not pass through the filter system, then he/she was rejected. And that sometimes, the filter was an inadequate way to measure.
The question then is when should you ignore the filter and go with your gut? The case in point involved hiring a salesperson. I participated in the interviewing and concluded to my client that hiring this guy would be a mistake. As a matter of fact, I went further and said it would be a major mistake.
My client hired him anyway, and he has turned out to be a rock star. Hmm. So what can we learn from my mistake? He had been enormously successful in his previous company. I was concerned because his demands during the negotiation struck me as not only outrageous but irrational, meaning that in his desire to be an “owner” with my client, he was actually going to end up in a worse place than if he were just a salesperson. My history concluded that he would never be happy and would always be difficult if he were hired. Remember, his stated goal to be an owner was very clear. And there was an implied threat that if he couldn’t get the deal he wanted, he would simply go out on his own and compete with my client.
My client agreed that the fellow was difficult, but the difference is that his gut told him that he could make it work. My client “courted” him, chased him, elevated him — and finally landed him — on the client’s terms.
So when do you let the gut overrule? Our current U.S. president works on a gut level in his decision-making process. I will not opine on his success or lack thereof, but what I do know is that the gut can be great. (I like the word gut, since I am an investor in a microbiome company, and gut is a term of both art and science.) I applaud my client and his acumen.
Now for the next story which demonstrates the variability of the infamous gut. Recently, I started a software company, and I had to make an irrational and gut decision. We had the opportunity to hire a team of four geniuses. If I didn’t make an offer, they were going to take another gig. These were big data, machine-learning geniuses, so they did not grow on trees. I had a chance to land LeBron, and I didn’t have a basketball or a court, but I figured I could get one.
The question is — do you hire them and start paying them – even though you are relatively clueless as to what the product was going to be, would anyone care, and unsure of who your customer was. Ironically, the same client above castigated me for going ahead. After all, I teach lean start-up, and all the rules say go talk to your customer before you start spending money.
I had to go with my gut and assume that we would skate to where the puck was going to be, even though at the time, we did not even have a rink. The end of the story is that the team, the product and the customer have come together nicely. If I had delayed, if I had been rational and careful and adhered to my own teaching, I would not have had the success.
This gut thing is a real puzzle. I do not in any way discount its power and its effect. But here were two stories, and in each case the gut prevailed over classic entrepreneurial thinking. I read a book recently about “unsafe thinking,” in which one of the themes is that creativity thrives in an environment where you allow for the possibility of failure without recrimination. You have to set aside what you know for sure, so that you can dip your toe into what you don’t know — for sure.
Rule No. 571: Trust, but verify – your gut.