I Wonder, I Think, and I'm Pretty Sure
Placing strategy bets and building confidence that you're heading in the right direction
Happy Sunday, everyone! ☃️
(Yes, it’s snowing in Colorado in May.)
I received quite a few replies that last week’s post - Operations as a Heartbeat - resonated well. Happy to hear it! I’ll keep jamming on pieces of the heartbeat each Sunday.
Also, inspired by Ibrahim from Run the Business and Austin Kleon, future posts will be accompanied by a drawing by yours truly in place of a stock image from Unsplash. Feels more…human. Scroll down to see this week’s masterpiece created alongside my four-year-old.
This week’s post is all about placing bets and building confidence. Let’s dig in.
What else? Shishir from Coda shared an approach for framing problems effectively. I recently revisited this “oldie but a goodie” on giving away your Legos. Highly relevant to this post, John Cutler wrote about thinking about your roadmap as a “portfolio of bets.”
I’m an awful gambler…
The last time I was in a casino, I put $10 on black for five separate roulette spins (48% odds or something, right?). Well, I walked away dejected figuring there were much better ways to give away $50.
I might not be great in a casino, but I do like thinking through strategy. And, the two aren’t really all that different.
Developing a strategy is akin to placing bets. Based on everything you know, you make a gamble that a certain set of actions will pay off at some point in the future. Unlike the casino though, you have some signal telling you you’re on the right track. The strength of that signal ideally grows over time and builds your confidence allowing you to place bigger bets.
I think of these bets in three broad groups - “I wonder…”, “I think…”, and “I’m pretty sure...”
“I wonder…” bets are typically “dips” meaning they’re low fidelity ideas that you can iterate on quickly with a very low risk of bankrupting the whole enterprise. “I wonder…” bets are useful when there’s a visible opportunity, but you have an uncertain solution (or a few hints on where to start).
For “I wonder…” bets to work, you need:
Open sharing of ideas. Great ideas can come from anywhere. Often times they bubble up from places you might least expect.
Alignment on what’s important. What signals are you looking for to move to the next stage?
Wide-spread sharing of data. With fledgling ideas, there’s a risk to filtering data looking for signals too early on. If you’re unsure what you’re looking for, make all of the data accessible and let people think on it.
Speed and flexibility. You want fast iteration, low levels of bureaucracy, and high levels of autonomy. Again, these are tiny bets meant to foster learning. This is not the time for “yearly planning.”
Runway to fail. Because most of them will, and that’s okay. Just make sure your organization’s people, processes, and profit formula understand this as well.
A bet starts to pick up steam when you see early signals that indicate you’re on the right track. Now, it’s time to increase the bet size.
“I think…” bets are generally characterized by:
Confidence in the size of the opportunity ahead.
Signals that you have a possible solution, albeit with a few gaps.
Resources to place more sizable bets. Still, we’re not "betting the company,” but we have some runway.
Now, we need patience, statistical rigor, and validation from elsewhere.
On the patience front, we’re now placing a larger bet (with earned confidence from before) that needs time to play out. Pulling resources from the project too early short circuits any potential learning or validation.
Whereas previously we were sharing a haystack of data, now we’re applying some real rigor to understand if we’re really on the right track. Before making an even larger bet, we want to be sure we’re not misreading the numbers.
Finally, we can look across the industry to find other signals that bolster our confidence. Ask the question, “If I’m right, what else would probably be true?” Then, go out and test that hypothesis. For example, when Peloton launched on Kickstarter in 2013, you could have asked yourself:
Would people stream content? Netflix and YouTube proved that to be true.
Are people excited about spinning? Meet Flywheel, Soulcycle, and many others
Will people work out in their homes? That idea was introduced by Nordic Track and Bowflex plus many others before them.
I’m pretty sure…
Our confidence is built even further by:
A growing certainty in the size of the opportunity ahead
Relatively certain solutions with high upside and clear revenue potential
Now we’re ready to take a bigger swing and push more chips into the center (to mix my analogies).
Time horizons begin to elongate. Yearly planning kicks in. We make more “dive” decisions that aren’t as easy to reverse. Again, that’s all to be expected based on everything we’ve learned to this point.
For bets in this category, it’s important to understand:
Why this is working. So we can double down. What are the drivers of growth? What are the weak points? Where specifically are we playing to win?
What are the key guardrails and decision points that would make us change course? What would make us worried that we’re no longer headed in the right direction? When is it time to reevaluate our direction?
What’s the next “I wonder…” bet? Because we need to constantly inspire that line of thinking to build the next successful piece of the business.
A final note
On the topic of bets, I love this quote from Jeff Bezos about scaling the size of the bets within your organization. “I wonder…” bets can be very sizable dependent on the scale of the company:
As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures.