I am learning to trust my gut as a founder/CEO. Harder than it sounds.

It's an easy cop-out to try and crunch every number and strictly go by the book so that you play the odds. The Moneyballification of decision making (more recently the Claude-ification of decision making).

The implicit idea that with enough data in the spreadsheet the right answers will magically reveal themselves. And sure there is some truth to this.

But if you read about the greats like Steve Jobs you realize that guys like him were cowboys. They didn't overthink the numbers, they had something else: gutsense. I reread Walter Isaacson's biography on Jobs recently and this levitated off the pages.

For ex: in 1979 some engineers at Xerox had quietly built the first graphical user interface (windows, icons, a mouse pointer on a screen). Nobody at Xerox thought much of it. But when Jobs saw the demo he watched for about a minute then started jumping around the room screaming "Why arent you doing anything with this??”

They all ‘saw’ the same thing. Only Jobs felt what it meant. He took this and went on to build the Macintosh (with it the entire paradigm of personal computing we have today). Then he did it again with the iPod. Then he did it again with the iPhone.

No focus group or market analysis told him to do that. From his Stanford commencement address: "Have the courage to follow your heart and intuition. They somehow already know what you truly want to become" ← this is it.

The point my friend is that you cant spreadsheet your way to inventing the iPhone. If he took the idea to a consulting firm they probs would’ve told him not to try.

True innovation lies in gutsense and taste.

Its precisely the reason why big companies generally dont invent groundbreaking tech. They are too entrenched in their sheets and consultants. Today (in a world where AI has driven the cost of number-crunching and execution to zero) gutsense and taste is the most important thing a founder can have. It will soon be the only advantage.

To play devil’s advocate you might say ‘but Ramsey, cant intuition can be deceived by lack of information or false information?’ And I would say yes, there is truth to knowing the number.. But probably to a limit. Often times I feel like its better to know them and to reject them with gut than to fall back and say ‘well the spreadsheet said…’

In my life there are many instances where I feel like we should do something a certain way at Babbl and I cant quite articulate it through the numbers. There's a gap between what the data says and what I 'know’. At first I didn't really trust this. It feels suspicious to see the numbers and reject them.

That gap is intuition. It is taste. And I'm learning to stop treating it like a liability and start treating it like an asset.

More recently building YTSponsorDB this has become apparent. When we first started working on it we immediately noticed people were reacting differently to it. There was a sparkle when people demo’d it that I couldn’t explain with numbers. Perhaps irresponsibly, we made the decision to allocate all of our engineering bandwidth to it, at direct opportunity cost to our existing services. The spreadsheet would have told us to hedge. My gut said go all in. Eight weeks later YTsponsorDB is the majority of our revenue…

FWIW - a few heuristics on harnessing gutsense:

1) Numbers are for sizing. They help you understand the scale and risk of a decision. In the words of Bezos, they tell you whether something is a ‘one-way door’ or a ‘two-way door’ (ie whether the downside is $500 or $50,000). Again you should probs know the numbers before you make a big call. But once you've sized it, the decision should come from YOU - not from the spreadsheet. The spreadsheet can tell you the expected value. It cant tell you whether you are right.

2) Gut for people, data for math. Generally you should trust your gut on people decisions - hiring, partnerships, ie. ‘does this person feel right’. Trust the data on quantifiable things - pricing, unit economics, ad spend. I think most founders get this backwards. They use data to justify a bad hire and gut instinct on their pricing model.

3) If you cant decide, sleep on it. As an impatient man I have learned to embrace this. And there is science behind this. Kahneman would tell you that your subconscious does pattern recognition while you sleep in ways your conscious brain cant. So if you've looked at the data and still cant decide, thats not a sign you need more data. Its a sign your gut needs a night to catch up. Don’t force decisions let them breath :-) [going on walks also helps]

4) Keep the track record. When I look back at my worst decisions they were never times I followed my gut and it was wrong. They were times I felt like something was off and talked myself out of it. I overrode the gut with a spreadsheet or someone else's logic. Gutsense accumulates over time - I suppose this what they call wisdom.

The mistake most people make is using data as a crutch instead of a tool. Theres a difference between informing a decision and outsourcing it. The former is wisdom. The latter is abdication.

Human intuition has been actively sharpened through billions of souls over thousands of years. When your gut tells you something there’s usually a reason. So:

Peace,
ΩRamsey