Decision Making
Inventor and engineer Elon Musk has successfully started four billion-dollar companies: PayPal, Solar City, SpaceX, and Tesla.
To launch them -- and to answer any complex question -- he uses the same approach each time.
It's "the scientific method," Musk said. "It's really helpful for figuring out the tricky things." He describes his process this way:
Ask a question.
Gather as much evidence as possible about it.
Develop axioms based on the evidence, and try to assign a probability of truth to each one.
Draw a conclusion based on cogency in order to determine: Are these axioms correct, are they relevant, do they necessarily lead to this conclusion, and with what probability?
- Attempt to disprove the conclusion. Seek refutation from others to further help break your conclusion.
- If nobody can invalidate your conclusion, then you're probably right, but you're not certainly right.
Musk utilizes these six questions any time he needs to come up with an idea, solve a problem, or decide to start a business. He values this kind of evidence-based decision making, and criticized individuals who can't separate fact from figures.
Amazon CEO Jeff Bezos also has a set framework for decision-making. In a 2016 shareholder letter, he distinguished between Type 1 and Type 2 decisions.
Type 1 decisions are "are consequential and irreversible or nearly irreversible - one-way doors - and these decisions must be made methodically." Type 2 decisions are "changeable, reversible - they’re two-way doors," which "can and should be made quickly by high judgment individuals or small groups."