- Fear is actually an acronym,
and it stands for false evidence appearing real.
(upbeat music)
What's up everybody,
hope you're having an amazing day.
I've got a super fun video to chat with you today,
talking about type one versus type two decisions.
Something that I think can really serve,
especially if you're like dragging your feet
to make any type of decision in your business.
Maybe it's new software, key hire,
deciding if you should get new credit cards
for your corporation,
whatever it is,
literally, if you struggle with making faster decisions
and you get anxiety from making the wrong decisions,
I wanna teach you a different way that really can unlock
and open up the flood gates for not only you
to feel more confident and comfortable making decisions,
but more importantly,
to allow your team to make decisions on your behalf,
or at least know that you're moving things forward
and you're not dragging your feet.
Or I like to say driving with the handbrake on,
oftentimes when people get anxious around making decisions,
it's literally in your business
like driving with the handbrake on,
you gotta pull that up and you're pitting the gas,
and at the same time,
it's just like the back tyres
are just dragging on the pavement.
You need to drop the hand brake and move things forward.
So, I wanna share with you a framework
called type one versus type two decisions.
I first learned this from Jeff Bezos of Amazon.
He's made the concept famous.
The analogy is very simple.
Imagine there are two types of decisions you can make
in your life.
There's one type which is type one,
which is kind of like a one-way door.
Kind of a door that opens.
And once you step through the door, it closes.
That's a type one decision.
A type two decision is the decision
more like a revolving door,
where as you go through the revolving door,
you can come back and work your way
out of entering that building by staying in the door
and moving backwards.
And the reason why it's really important
to create distinction
amongst which one you're making decision around
is that things that are type two decision
allow you to make a decision.
And if it's wrong,
you learn new information.
You can always step back for it.
Whereas a type one decision,
something like buying a company or bringing on investors,
or deciding what bank you're gonna go with.
These are things that are kind of like one way direction.
Well, maybe not the bank one,
but they're one way decisions.
And the risk in a business
is that you use the thoughtfulness
and the pace of a type one decision
for things that are really type two decisions,
things that you can easily work your way out of,
you should never use the level of thought and rigour
and assessment and information gathering
as you would for a type one decision.
So the key ideas to slow down to make small decisions,
but make the key ones.
Jeff Bezos famously said that,
in the morning when he wakes up,
he only has to make one or two really good decisions
to make his day really productive.
And the reason because of that,
he usually front load those decisions early in the morning
when his cognitive abilities are really strong.
So I wanna walk you through some strategies
to help you make better type one and type two decisions.
First off is I want you to understand
that in every decision you make,
you're essentially, there's a component of you
that's making decisions out of fear
based on past experience.
And like most people,
there's probably a good chance
that you've had some challenges or trauma
or issues come up in the past that are fogging your ability
to make decisions today.
So fear is actually an acronym,
and it stands for false evidence appearing real.
So fear is an acronym,
and I want you to memorise this
for false evidence appearing real.
The reason I shared that is because most people
can't make a decision based on,
some people call it trauma, PTSD, whatever,
on a scenario that happened in the past.
But if you objectively look at the situation
you're in today,
there's no artefacts of that previous scenario
represented in today's decision,
and you're not making the decision out of a fear
that's just not real.
The people involved, they're different,
the scenario is different,
the person you are today,
you've grown to become somebody that can deal with
and handle issues.
I mean, just ask yourself this question.
If you make the decision and you move forward,
instead of being fearful that it won't work out,
ask yourself what's the potential downside,
and who have I become,
and how have I dealt with bigger challenges
than the one that potentially could happen
if this thing doesn't go in the right direction,
the answer for a lot of people is yes,
you a hundred percent have dealt with situations today
that even you don't even realise
when you're dragging your feet to make a decision,
your ability to deal with the challenge,
it could, probably won't ever happen.
Most people stress themselves out over scenarios.
The stress of the decision usually causes more pain
than the potential of the thing not working out.
That's crazy, but happens all the time
where there's more challenge and frustration and anxiety
and emotions around making the decision
than would have come from the thing
that you decided to do not working out.
You could have actually got through that easier
than the anxiety brought to yourself.
This is the opportunity
that I really wanna shed some light on.
So first off again, I wanna remind you,
fear is an acronym,
false evidence appearing real.
So you just have to audit yourself and really write down
like, is this even true?
Is there any component of this
belief system that I've got right now
that's even true around moving this forward,
and what could go wrong.
So that's number one.
Second is, always look at the upside and the downside
of making a decision.
The way I think about it is,
it doesn't matter if it's an angel investment.
I've invested in 40 plus companies as angel investor.
Buying companies.
I've done a lot of that lately.
Key hires.
I think I've hired about 15 people in the last four months.
So like making decisions around hiring.
So, the moving forward upside versus the downside,
if the upside is disproportionate to the potential downside,
meaning that worst case scenario,
like for example,
you hire somebody,
and in two months they don't work out.
Yeah, I gotta go through the process
of recruiting somebody new.
I gotta cross train them,
but the downside of that is manageable.
And the upside of hiring somebody amazing
that just takes things off your plate.
That creates a tonne of value for your business is so high
that for me in that situation,
the downside risk is worth the upside reward.
What most people never analyse is,
can they live with the downside?
So let's say you've saved a couple hundred thousand dollars
and somebody comes to you and says,
hey, you should invest in Bitcoin.
You know nothing about cryptocurrency.
And you just have some blind faith trust,
and you take all of your life savings, $200,000,
and you put it into crypto.
And then all of a sudden the value of the coin drops
by two thirds,
can you live with that downside.
If it's your life savings,
the chances are,
I'm gonna assume that that would crush you emotionally.
And what's the potential upside.
Yeah, you could probably 10X your money.
Maybe a hundred X, I don't know, over the next decade,
but for a lot of people,
they make decisions without asking themselves,
what's the potential real downside.
And if I can't live with that,
should you do it just because the upside is so big.
So, it sounds crazy,
but as an entrepreneur,
I don't take as much risk as I used to.
I used to be way more risky,
but now it's almost like I'm looking
for these asymmetrical reward scenarios
where the downside I can mitigate.
And the upside is disproportionate,
is geometrically like opposed to the potential downside.
Like there's so much upside of my world today
with high-speed ventures is buying companies,
the amount of upside potential versus the downside.
I buy a company,
doesn't work out the way I wanted to,
potentially divest of it, get my money back, mitigate it.
No harm, no foul versus the upside of 25,
50X-ing the investment or the acquisition
through that period of time.
And I think the upside downside of valuation
is such a great way to make a decision quickly.
And then finally,
the third thing is I think for a lot of people
that know they have anxiety around recruiting,
around financial investments,
around maybe even just like software decisions,
like what products to buy.
I think it's better for you to build a system,
almost like a decision tree.
Like if this then go to this,
like you can write down a system like, for recruiting,
you might have a process like I have,
which is called the talent pipeline.
I teach my coaching clients,
which would be like, okay,
the video gets submitted.
You evaluate these things.
These are the questions you ask.
Then you go to a cognitive assessment,
you go to a profile assessment,
you go to a test project,
and there's always three candidates
before you hire somebody.
That's kind of like high level
part of my recruiting process.
Well, now, if you've got that,
if you delegate,
you move the decision off your plate through a process.
So even investment decision,
a lot of investors that trade options are day trading
or angel investment or buying companies like me.
I have a decision criteria lists,
so I can give that to somebody else.
They can move processes through forward faster,
make decisions on my behalf.
I'm not involved,
but they're not bringing any emotion to it,
because they're just following a process.
And I think that is such a powerful way
that if you're self-aware enough to know
that certain things trigger you,
and it's better if somebody else handles it.
But in doing the delegation,
you give them a process,
it can help you really move things along faster.
So those are the three big ideas
that I wanna share with you.
Number one, remember that fear is nothing
but false evidence appearing real.
Number two, to measure the upside and the downside potential
of making a decision.
And if you can't live with the downside,
don't make the decision.
And number three,
always look at opportunities to move decision-making
off your plate through a process that an individual,
a contract or an agency
so that the business can continue to grow
regardless if you have emotional triggers being fired
around decisions you need to make.
If you like this strategy,
I'm gonna link below a framework that I created
for my clients called the future living,
which teaches you how to in your mind,
live six months into the future.
And I'll tell you why this is powerful
in the links below if you wanna click through
and watch that.
But it's designed to be able to bring an energy level,
and a creative process today to the future
you know you will create with certainty.
And that's really where confidence come from
is the ability to have the discipline to execute today,
to have conversations today.
If you're hiring somebody,
you wanna speak six months into the future,
not where you're at today
to get them excited about where you're going.
And there's a whole bunch of nuances around doing that.
But I thought if you like what I've shared with you today,
it's called future living,
click the link below to get access to that.
But I just wanted to share some thoughts
on making decisions faster,
so that you can drop the handbrake
in your decision-making life and move things forward.
I hope this video finds you amazing.
We'll talk soon.
Peace.
Later.
(upbeat music)