Opportunity Cost and the Power of No
Updated: Nov 22, 2019
I’ve been reading a number of posts recently about the “power of no.” In these discussions about the pursuit of finding or creating something “great” we are first confronted by a thousand “tolerable” choices we must say no to, lest we let something okay take the spot of something great.
In school I really enjoyed my coursework on economics. This discussion reminds me of the “opportunity cost” concept. Opportunity cost is where scarcity and choice intersect; saying “yes” to one thing, means being unable to do something else.
As a startup founder, this a perpetual encounter — making difficult decisions with a very limited number of resources. For founders in ventures blazing new trails, it gets even tougher — no one else has done it before, you don’t have the luxury of seeing the results of someone else’s choices.
Then consider new learning around “decision fatigue,” a term psychologists are using to define a phenomenon where the more decisions we make throughout a day, the more difficult it becomes to make the next decision — even on frivolous choices, like what to eat or waiting to use the restroom.
Find yourself making too many impulsive choices, like overspending or binge drinking? You’ve probably exhausted your ability to think critically.
As a startup founder, faced with the necessity to make big decisions, scarcity of resources, and with a finite capacity to make choices, what can you do?
Manage your energy, not your time. Every morning at Gimme, we start with a team huddle and go around the room answering “what is most important” for the day. While our energy is highest, we schedule time to make that decision.
Stick with it. When you make a decision, don’t second guess yourself. You would demonstrate a lack of confidence in yourself and others may lose trust in your future decisions.
Consider the bigger picture. What is your vision? Does the result of your decision bring you closer or further away from reaching it? If it does not bring you closer... just say no.
As a startup founder, we would do well to understand the Power of No, opportunity cost, and what we can do to mitigate decision fatigue.
Original Post: https://www.linkedin.com/pulse/opportunity-cost-power-cory-hewett/