Your Decisions are Wrong. Is Your Methodology?
I made a lot of mistakes while running GoCrossCampus. Lots of people ask me questions that more or less amount to "If you could have done X differently, what would you have done?" I always answer these questions sincerely. "Oh, I would've done A rather than B and C rather than D" or something like that. But in the back of my mind I know that counterfactuals make for odd teachers. That is, the information I have about the specific problem has obviously changed -- and the more interesting lessons come from shifts in my decision-making methodology.
These "If you could have done X differently" questions are essentially asking "If you knew back then what you know now, how would the decision you made have changed?" Interesting, yes. But the information that led to the decision -- for instance, my beliefs on the marketability of a product or the right way to scale an app -- isn't that useful. Rather, the juicy bits are the framework through which I took the information and produced an actionable plan. Consider the following question:
If you could do it again, how would you structure your financing round?
And answers:
I would've clearly taken a priced round rather than a convertible note given the difficulty we had in closing the round.
or
Given the information I had at the time, I would not have done anything differently. That is, even though my information was wrong, my decision-making methodology was sound.
In other cases, my methodology may have been wrong yet my decisions right -- something we in the business call "getting lucky". But those two replies are answering the question on different levels. One is concerning facts -- the who, what, when, where and how of the situation at hand. The other is concerning methodology -- given the facts at hand, how did I come to a decision?
When evaluating past decisions, too many entrepreneurs focus on the facts rather than the methodology. Methodology is replicable. The mental algorithms I use to convert data into a decision are used over and over again. Data is all too often ephemeral and unrepeatable, and condemning a decision-making methodology that was plagued by bad data is often a quick way to take a step backward (or vice versa, endorsing a poor system that got lucky due to circumstance or poor data.)
Focusing on the methodologies rather than the facts will allow you to see patterns and make better decisions in related but non-identical situations. If I get hit by a car, it would be odd to simply say "Wow, next time I'll see the car." Rather, I'm going to make fundamental changes to the way I think about crossing the street -- specifically, how I gather information and translate that information into actions. Why should a startup be any different?