Key Moments
Stop Overthinking: The 70% Rule to Beat Procrastination
Codie SanchezKey Moments
Most decisions should be made with 70% of the information, as waiting longer makes them more expensive and less likely to succeed.
Key Insights
Information decays like milk, not wine: your conviction and data become less relevant with each passing day, making slower decisions more costly.
Square launched its credit card reader in three weeks, and Amazon's competitive product failed within a year because Square seized the market earlier.
Jeff Bezos's 70% rule suggests making decisions with 70% of the desired information, as the final 30% is often too expensive and time-consuming to acquire.
The Columbia jam experiment showed that a booth with 24 varieties attracted more people but only 3% bought, while a booth with 6 varieties converted 30%, demonstrating analysis paralysis.
The 24-hour rule mandates that reversible decisions must be made within 24 hours of being identified, fostering clarity and preventing stagnation.
If you're not embarrassed by the first version of your product, you've shipped too late (Reid Hoffman).
Information decay makes speed essential in business and career
The common adages 'measure twice, cut once' and 'good things take time' are often detrimental in the fast-paced business world. Speed, distinct from recklessness, means compressing the distance between yourself and reality. Moving fast doesn't prevent mistakes, but it allows for quicker identification, correction, and learning. Conversely, moving slowly means your data ages, your conviction erodes, and your opportunity window closes as competitors or market conditions make decisions for you. Information 'ages like milk,' becoming unusable quickly, not like wine which improves with time. The 'decay question' – 'Is what I learn in the next 30 days worth more than what I lose by not starting?' – reveals that for most decisions, the answer is no, highlighting the cost of delay.
Square's rapid launch versus Amazon's failure illustrates market pouncing
A prime example of speed winning is the story of Square. In 2009, Jim McKelvey, a glassblower, lost a $2,000 art sale because he couldn't accept credit cards. He partnered with Jack Dorsey, and within three weeks, they had a working credit card reader that plugged into an iPhone. This allowed them to seize the nascent market for mobile payments for small businesses. Years later, Amazon launched a similar, cheaper product, Amazon Local Register, backed by immense resources. However, within a year, Amazon abandoned the product, recognizing that Square's early lead was insurmountable. Square won because they acted decisively when the market window was open and the data was most relevant, demonstrating that moving fast captures opportunities before they disappear.
The 70% rule: Deciding with incomplete information
Jeff Bezos's 70% rule, outlined in his 2016 shareholder letter, is a cornerstone of rapid decision-making. He advocates for making most decisions when you have about 70% of the information you *wish* you had. Waiting for 90% or more is often too slow and significantly more expensive. The initial 70% of information typically comes easily, while the remaining 30% is disproportionately time-consuming and costly to obtain. The strategy is to move forward with the available 70% and then correct course once in motion. This approach acknowledges that in most scenarios, 'slow is more expensive than wrong.' The key is to ask yourself if you've reached the 70% threshold; if so, act.
Distinguishing between one-way and two-way doors
Complementing the 70% rule is the 'door test,' which categorizes decisions into one-way or two-way doors. A one-way door decision is irreversible, such as selling a company or firing a senior employee, and thus requires significant deliberation. In contrast, a two-way door decision is reversible. You can try it, and if it doesn't work, you can easily backtrack. Examples include testing a price point, hiring a contractor, or posting something publicly. Bezos advises that teams should make two-way door decisions quickly, relying on high-judgment individuals rather than committees, which are often detrimental to progress. Many organizations and individuals mistakenly treat all decisions as one-way doors, leading to unnecessary paralysis.
Analysis paralysis destroys conversion rates, as shown by the jam experiment
The 2000 Columbia jam experiment vividly illustrates the concept of 'analysis paralysis.' Researchers set up two jam tasting booths: one with 24 varieties and another with just 6. While the booth with 24 jams attracted more initial interest (60% of shoppers stopped), only 3% of those tasters actually purchased jam. The booth with 6 varieties, however, converted a remarkable 30% of tasters into buyers – ten times higher. This demonstrates that overwhelming people with too many choices leads to a collapse in conversion rates. Moving fast inherently forces the reduction of options, which is crucial for taking action and achieving results.
Quality versus perfection: a critical distinction
A common roadblock to speed is the pursuit of perfection, often confused with quality. Quality means the output works, the customer is satisfied, the problem is solved, and progress is made. Perfection, on the other hand, implies zero flaws—no typos, every edge case handled, every stakeholder signed off—which is an unreasonable and often unattainable goal. Perfection acts as a trap that can stall progress indefinitely. Entrepreneurs who aim for 100% perfection may end up shipping at only 40% after significant delays, lacking real-world data. The advice from Reid Hoffman is pertinent: 'If you're not embarrassed by the first version of your product, you shipped too late.' This highlights that delivering a functional, albeit imperfect, initial version is more valuable than waiting for an elusive perfect one.
Five actionable moves to increase speed and efficiency
To combat overthinking and boost decisiveness, five practical moves can be implemented: 1. End every meeting with a decision or a deletion. If neither occurs, the meeting was unproductive. 2. Implement the 24-hour rule: any reversible ('two-way door') decision must be made within 24 hours of surfacing. This rule may even need to be shortened in fast-moving environments. 3. Eliminate one recurring meeting per week, preferably a low-value one. If no one requests its return after two weeks, it was the right call. 4. Write a 'press release' first for any new idea or product. This forces clarity on its purpose, customer value, and differentiation, potentially saving months of planning. 5. Practice 'disagree and commit.' While open debate is encouraged, once a decision is made, the team must fully commit to its implementation without sabotage, significantly tripling execution speed.
The critical role of sleep in decision-making and performance
Underlying the ability to make fast, high-conviction decisions is the fundamental importance of sleep, particularly deep sleep. Poor sleep quality directly impairs focus and cognitive function. Advanced sleep technologies, like the Eight Sleep Pod, can significantly enhance sleep quality by automatically regulating sleep temperature. Users report substantial increases in deep sleep (up to 34% more), faster sleep onset (up to 44% faster), and improved HRV, indicating better physiological recovery. This technology, utilized by high-performers like the Aston Martin F1 team and figures like Andrew Huberman, optimizes the sleep environment, enabling clearer thinking and more confident decision-making. The Zeigarnik effect also notes that unfinished tasks occupy significant mental bandwidth; closing decision loops through prompt action frees up cognitive resources.
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Speed Up Your Decisions: Key Moves
Practical takeaways from this episode
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Common Questions
The '70% Rule', popularized by Jeff Bezos, suggests making most decisions when you have about 70% of the information you ideally wish you had. Waiting for 90% or more information makes you too slow, and in most cases, being slow is more costly than making a slightly imperfect decision.
Topics
Mentioned in this video
Highlighted as a prime example of a company that won by moving incredibly fast to solve a market need, exemplified by its rapid development of a credit card reader.
Cody Sanchez's company, which offers 'growth accelerator workshops' focused on collapsing work and results into shorter timeframes.
Acquired Instagram for a billion dollars 18 months after its launch, highlighting the rapid growth and valuation potential of fast-moving companies.
A smart mattress cover company whose product is recommended for optimizing sleep quality, which is presented as foundational for making fast, high-conviction decisions.
Cited as an example of a fast-moving company that succeeded due to rapid adaptation and growth, specifically its pivot from Burbn.
Mentioned as a user of Eight Sleep for athlete recovery, indicating its application in high-performance environments.
Mentioned as a company that attempted to compete with Square but failed due to Square's established lead, illustrating the cost of slower market entry.
Mentioned for its organizational structure, specifically working in small teams of five, to facilitate faster decision-making.
Cited as another individual who optimizes his life heavily and uses Eight Sleep, further endorsing its benefits for high performers.
Host of The Big Deal podcast, discussing principles of speed and decision-making.
Founder of Amazon, whose principles of the '70% Rule' and the 'Door Test' are discussed as key strategies for fast decision-making.
Mentioned as an example of someone who is both very fast and very good, countering the idea that speed compromises quality.
Co-founder of Instagram. He successfully pivoted from a failing check-in app called Burbn to create Instagram.
Co-founder of Twitter and early collaborator with Jim McKelvey, who suggested fixing the payment issue that led to the creation of Square.
Co-founder of Square, whose personal experience of losing a sale due to a lack of payment options inspired the creation of Square.
Mentioned as someone who has optimized many aspects of performance and uses Eight Sleep, indicating its value for highly performance-oriented individuals.
Co-founder of LinkedIn, whose saying 'If you're not embarrassed by the first version of your product, you shipped too late' is quoted to emphasize the importance of rapid iteration over perfection.
The smart cover product from Eight Sleep that regulates sleep temperature on each side of the bed, aiming to improve deep sleep and reduce decision fatigue.
Amazon's competitive mobile credit card reader that was shut down within a year due to Square's insurmountable market lead.
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