Regret Minimisation Framework (SoGv3-2)
|Oct 28, 2019|
Regret Minimisation Framework
In SoG44 (9 Dec 18), I wrote about Jeff Bezos' Regret Minimization Framework. I want to write about it again today. Completely rehashed. I am doing this because the other day I met up with MK and he talked about how to use RMF to make decisions and I realized that I don't have as solid a grasp over the concept as I would like to. And hence, I am using this letter as an opportunity to read about it, mull over it and then write it so as to explain to a toddler. You know, Feynman's method!
So, what is the Regret Minimization Framework?
First, see this video - https://www.youtube.com/watch?v=jwG_qR6XmDQ. This is where Jeff first talked about RMF. He says that when he is 80, he would want to minimize the number of regrets that he would have.
“The framework I found, which made the decision incredibly easy, was what I called — which only a nerd would call — a “regret minimization framework.” So I wanted to project myself forward to age 80 and say, “Okay, now I’m looking back on my life. I want to have minimized the number of regrets I have.” I knew that when I was 80 I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day, and so when I thought about it that way it was an incredibly easy decision.”
Now, think about your grandfather. Or the grandmother. What do you think they regret? Since I was not close to any seniors when I was growing up, I am not sure what they would come up with. This piece has the top 5 regrets as noticed by a nurse offering palliative care to dying patients. I don't agree with the 5th one, to be honest, but to each his own.
Now, think about things that you regret (even if you are 29). These would be things like not starting up when you had the opportunity and the time. Or not asking that guy out who you thought was so cute!
So, essentially, regret minimization framework is that when you are faced with a tough decision, project yourself to the age of 80 and ask yourself if you would regret NOT taking that decision. Will you smile about it or frown about it? If you would frown, then take it! The decision may or may not pan out as per your expectations but you would know that you've tried! And that is all that matters!
In the long-term, if you follow this framework, your life may be better. Or could be worse. But when you are old and you cant roll back time, you would not have the regret of not trying when you could!
The framework is just a nudge and can NOT be the only metric to take the decision. You have to have rational reasons for taking the decision. In fact, I would say, RMF is best used when you have reached a point where you know that decision is a good one and you just need that last nudge to jump!
Just that as a rational human being, you need to ensure that you max the odds of a favorable outcome if you are going to jump the gun. Starting a company? Have a business plan ready. Asking a dude out? Be rational and see how he behaves with strangers.
Also, the thing is, most decisions are taken with incomplete information. An RMF allows you to take the plunge and prevent you from analysis paralysis.
Of course, the outcome of that decision may or may not be what you expected it to be. On both sides - exceptional gains and exceptional loss. You need to be able to separate outcomes from the decision.
Think about it. Your life would be far different if you took that decision AND the decision panned out the way you expected it. Or did not pan out the way you expected it. For example, if you did indeed ask that cute guy out, what if he turned out to be the biggest asshole in the world? At the age of 80, you would not have the regret of asking him out but you would have the regret of wasting so many years of your life with an asshole.
So, which regret is greater?
I think, often, the bigger regrets are of omission. Not of commission.
I should've done this when I was younger.
I should've started out when I could.
I should've asked the guy out.
Basically, the one that you avoided despite whatever information you had.
And the decision. Not the outcome.
You can never ever predict outcomes. Its a lottery like that.
You HAVE to separate decision-making from poor outcomes. They are two different things. You would never know how that guy would turn out eventually. You would not know how your startup would pan out! But you would know that you acted when you could. You just did not sit on the fences.
How am I applying this in my life? And how could you?
Lemme use an example.
I am at this crossroads in life where I need to take a big decision. My heart says a thing. Head, another. I don't have complete information. But I do know that if I don't do what my heart says and I follow my head, and if I make it REALLY big, I would still remain discontent for not having listened to my heart. And that is the regret that I don't want to have when I am old.
If I do listen to my heart and even if I end up a pauper, at the age of 80, I would still be content that I tried.
Get the drift?
Thank you for reading!
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PS: This is the third avatar of my newsletters. I don't know if I would write every day. Or if I would send this infrequently. Or if I would create an order. All I know is that I am back to writing. And over the next few days, I will decide what shape do I like. Of course, whatever I decide, I will ensure that each letter adds value to whoever is reading! Yes, I believe in quantity more than in quality. And in action more than in perfection.
TAGS: Risk, Failure, Regret, Jeff Bezos, Time, Decision Making, Entrepreneurship, Regret Minimisation Framework
STREAK: 2 (Read this on streaks).
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