There is a documentary called “The Fog of War” (won an Academy Award) that describes decision making in a war. It features Robert McNamara, who was Secretary of Defense in the context of Vietnam. Wars are very messy and the information available to the generals and decision-makers is usually very imperfect and incomplete. Nevertheless, decisions are required or lives are at risk.
In startups, it’s often quite similar, where your information is very imperfect, but the cost in terms of time (which is money) of gathering all the info is simply too high. Collecting all the information is a luxury. Large companies may have that luxury, or perceive that they do, but startups don’t. In startups speed is critical and decisions are required to move forward quickly.
What people often miss is that most decisions are reversible. There is a small cost of doing so, employees may feel a little whiplashed by the speed of decisions or reversals. But that is way better in most cases than failing to make a decision.
Startup investing is very similar. It’s messy, you don’t have all the information. You find out as much as you can, but you’ll never know and it’s almost never an easy decision. I’ve lost more money on easy decisions than hard decisions.
If you’re going to be in the startup world, either as a founder, employee or investor, you need to be comfortable with uncertainty. You need to be comfortable with the fog of startups.