Matt Heusser’s Blog
Testing at the Edge of Chaos
How we make decisions
Last week, Apple announced it’s iPad. If you haven’t heard the annoucement, you can go watch the eight-minute YouTube advertisement, or Steve Job’s 30-minute public announcement. It’s okay. It’s worth it, and I can wait.
… time passes …
Now, I didn’t come away from that video wanting to buy an iPad – it’s for consumers, people who surf the web, watch video, listen to tunes, etc. My focus is less on consuming and more on putting out new material. So it’s designed to support an entirely different group of people.
No, what I wanted to do was to buy shares of Apple Computer Corporation.
Which brings me to the topic of today’s blog post – how we make decisions. You see, we like to think that we make decisions rationally, in a sort of cold, hard, unemotional way. Line up the pros and cons, evaluate each one, and off we go.
But it’s not like that all. Sure, we may use facts to guide our decision making, but even then, as my friend Michael Bolton likes to point out, we tend to decide on how we feel about those facts. For example: Tell any executive that you expect 80% of your paying “members” to renew next year, or that you expect 20% to not renew, and you’ll likely get two different reactions.
So here are the facts I responded to about the iPad:
(1) Apple computer has a history of integrating it’s hardware and software offerings – the iTunes store, for example, has both music and video. Downloadable books seem like the next logical step.
(2) Amazon’s Kindle product has proved the market for a book-reading device. I also have some confidence that Apple can do it better; after all, they’ve been a hardware/sw company from year one. (There is even an old “kindle 3″ parody, worried about the dumbing-down of society that ends with tag line “It plays movies instead of books”)
(3) Apple has a history of innovation, new products, and even new categories. The iPod, for example, has sold 250 million copies – and Apple is incredibly good with price points and using new technology, to get users to upgrade every two to four years. The have a fan base so strong that, as another parody claimed “I’ll buy almost anything that is shiny and made by Apple.”
Sounds like strong reasons to invest right?
Well, there is another side. About a year ago I got another device – a netbook. It was shiny, small, a neat. It was also slow and hard to sync my files back and forth from different devices. Within a few months, I realized that I had a thin, small, cheap laptop. It wasn’t a category killer at all.
Moreover, Apple has been hyped lately; it’s trading very close to it’s 52-week high, which could mean it’s over-priced. If the iPad doesn’t take off, it might just be time for Apple’s stock to a hit. And Apple does have misses, or at least near misses – remember the MacBook Air?
If I wanted to, I could easily line up a set of facts against Apple just as strong as the reasons for investing it. On some level, investing is a bet that involves prediction, and telling the future accurately is probably best left to the weather guy on channel eight … but don’t go out past a couple days; then things start to get fuzzy.
But there is one more trick to decision making: If you know the value system or the culture and a little basic information, the decision they will reach is often predictable. I won’t say it’s entirely satisfying, but I have said to senior managers and executives things like “when nine months go by and this software hasn’t shipped, you can always call me” or “If this software doesn’t exist by February, just ask me and I can build something that can ship in a month.” (Both of those organizations had cultures that led to analysis paralysis.)
Most of us gather information in a way that leans toward Organic or Mechanic. When we have enough information to make a decision, the additional facts don’t matter – we rationalize them to fit the decision we have already made.
In that case, gathering additional facts is a kind of waste.
And that knowledge helps me make my own decision.
So, if you’ll excuse me, I’m off to purchase some stock in Apple Computer.
No cruise for me
I’ll likely be offline for a good portion of the week, but we never did get on that boat, and I’d like to tell you why.
We had a death in family this week.
So the next few days will be me cross-crossing the state, picking up some clothes that are not shorts and flip-flops, work from home today, bring my laptop, cross the state again, work from ‘over there’ tomorrow, be with family Wednesday, stay as long as we need with family. Because I can work from anywhere with internet and power, the time off will be minimal and we can reschedule a boat trip for late February.
When I think about this, I can’t help but remember the several times in my life when, working for larger corporations, I’ve been asked “What if Sally gets hit by a bus?” The question always seemed silly to me, because we never took it seriously. What do you if Sally passes? Why, we would comfort the grieving, visit the sick, and bury the dead, of course.
Then there’s Socialtext – a company with something close to a Results Only Work Environment, where the engineers can work from anywhere with power and internet, when they need to. At one point, we had an employee in India who would work at night (our day) so he could be with his sick father during the daytime hours. (Traditional freelancing, such as writing columns for ST&P Magazine, provides some of the same benefits)
It occurs to me that I work at a company that has engineered the work environment to make it possible to work while supporting the family in a time of need.
If I’m ever asked that question again about the bus, I won’t be offended like I used to be. (It is, honestly, an offensive question.) Nor will I try to reframe it as what the question really is – ‘What if Sally gets a better job offer’. No, I think I will take it seriously, and talk about how the company can change it’s policies to be more supportive in time of a loss in the family.
But for now, I work for an company that actually took the question seriously, and, for that, I am grateful.
