In the past week I’ve had three separate occasions where I was coaching or consulting for someone and the whole issue of making decisions via subjective opinions versus objective facts came up in the conversation.
I’m constantly amazed at the amount of a very smart and intelligent people who are making very big business decisions purely on subjective opinions which are not backed up by any facts. One thing that most truly good entrepreneurs understand is that really at the end of the day, your own opinion doesn’t really matter at all. It’s the opinion of the customer that matters and the only true way to measure that opinion is via the numbers of whether they buy or not!
As entrepreneurs it can be very tempting for us to purely follow out gut feel and blindly invest all of our money and other people’s as well, but this is a mistake. A very big mistake. Any time that we make decisions based purely on our own subjective viewpoint we are leaving ourselves at the mercy of all the flaws in thinking that we have and also the lack of information that we have at our disposal.
Entrepreneurs are testers!!
As entrepreneurs we should think of ourselves as testers. We test assumptions of what works and what will not work. We test ideas for products and services and we test business models and concepts of how to improve something in the marketplace. Our goal as entrepreneurs is to find the shortest and quickest possible route to a profitable business. To do these things we can’t simply rely on our own subjective opinion or the subjective opinion of those around us. Everyone’s family and friends will tell them that their business idea is a great one and that it is something that can make a lot of money, yet far too often I see these people are the first to go out of business before they have even faced any real challenges.
Simply put, opinions are a dime a dozen. People’s opinions are the one thing that most people would happily give you for free, especially when they’re not qualified to give advice on the subject. It’s dangerous to follow these opinions, because they aren’t backed up by any facts or proof.
Most of our business ideas start simply with us thinking of a new product or service and having a gut feel that it’s something that other people would want as well. This nothing wrong with this, but once you’ve got this first idea, your entire goal should be to find the evidence that’s it a good idea or not to prove you are right or wrong. You should be trying to construct a proof of concept or a prototype which you can test in the real world to see if it is going to deliver the results that you thought it would. Often what seemed a great idea in your head fails miserably when brought into the the real world.
Don’t think like a big company
Last month I read a very good example of this in a blog post by Internet Marketer Dan Raine. He made the point about people and especially companies deciding on designs for websites purely by what they believed made up the good website, rather than testing what actually worked in the real world. Unfortunately my own experience in consulting and working with big companies has just reinforced this fact time and time again. They don’t rely on constructing cheap and effective testing methods, they usually just go with the opinion of the most senior person in the room, who is generally clueless about what really produces the results.
In the past two weeks I’ve seen this in everything from the way that HR people in a very large bank decide who should receive what training, through to a CEO who was about to approve an entire new product range for next year based purely on what he thought were good colors for the packaging. These kinds of decisions are extremely dangerous for big companies, but more importantly they can be fatal for entrepreneurs and young startup companies. Don’t fall into the trap. Test it before you commit.
Ask yourself: what’s the fastest way to test your idea for the cheapest amount of investment both financially and in effort? This is the thing you should be focused on for every new idea you have in your company or business. Many people are scared of a test that proves their idea was wrong, until they realize that it’s often exactly those kinds of tests that allow them to find the right product, or service, or market which will lead them to profitability as quickly as possible.
Don’t make the mistake, basing big business decisions purely on gut feel is simply stupid, the whole myth of “build it and they will come” is exactly that a myth. Don’t fall for it.