Know When to Trust Your Gut and When to Seek Outside Advice
When deciding whether to invest in hopeful entrepreneurs who enter ABC's Shark Tank, Barbara Corcoran relies heavily on her gut reaction. Though the investor does her due diligence to learn about a company's finances, sales history and background, her final decision is often based on whether she likes the person doing the pitch.
Corcoran is not the only successful entrepreneur who values instinct when it comes to business decisions. Steve Jobs, Warren Buffet and Bill Gates regularly prioritized their own intuition over the advice of others or customer feedback.
Yet, some research suggests that instincts don't perform as well as people think. Just because Buffet's gut reactions have made him lots of money doesn't mean intuition works for everyone, especially when we don't all have instincts that are informed by his level of knowledge and experience.
Nevertheless, my instincts have helped me make a lot of good business decisions. I listen to my gut, but I also know that it needs to be balanced by input from others. It's a tricky tightrope act, but getting it right usually delivers the best results.
Here are six tips for knowing when to seek advice and when to follow your gut:
1. Seek advice early (but don't be afraid to ignore it).
When I started Hint, I sought advice from a variety of people, especially anyone working in the beverage industry. Many told me that selling non-sugary, preservative-free drinks simply wouldn't work. But, rather than be disheartened, I trusted my instinct that it was a good idea, while still learning about the industry from these advisors.
It's good to get feedback on a business idea early on, but be prepared for negative reactions and use them as a fresh perspective on what you know deep down is the right move.
2. Find a mentor who gets you.
When Mark Zuckerberg needed advice about how to keep his business focused as Facebook grew quickly, he turned to Steve Jobs. Not only had Jobs experienced the kind of problems Zuckerberg was facing, but both men were college dropouts and young founders of successful digital businesses.
Find a mentor with a similar background or who gets you as a person. Her advice is more likely to align with your instincts. Developing this relationship over the long term can be the most important gut-check you will have.
3. Turn to others to fill your gaps.
I was regularly told that producing a preservative-free beverage with the shelf life required by retailers was impossible, but my gut told me this couldn't be true. I continued to seek advice and eventually got help to develop an innovative technique that solved the problem.
Meg Whitman joining eBay to help Pierre Omidyar grow his auction site into the multibillion-dollar business we know today is a great example of a founder recognizing that he needs help. Input from others will fill gaps in your knowledge or skill set but don't be afraid to question what you're told if it goes against your instincts.
4. Validate your instincts with customers.
Creating a fruit-based sunscreen was not something Hint customers had ever asked for. Rather, it was a gut reaction to a personal problem I had that I instinctively felt our customers would want. I believed in the idea enough to develop the product before asking customers what they thought. Sure enough, they liked it!
Listening to customers is important but they are less likely to be a source of innovation than your own intuition. Nevertheless, it's always useful to have them validate ideas. As Bill Gates said, "They can't always tell you what they want, but they can always tell you what's wrong."
5. Have a clear mission.
From an outsider's perspective, producing sunscreen must have seemed like an unusual step for a beverage company, but my company's mission is to make America healthy. For us, removing the questionable chemicals used by most other sunscreens on the market was the same as creating a sugar-free beverage. It provides people with an easy way to do the right thing.
Your business purpose will always act as a guide to whether you should follow your gut. If your feeling about an idea aligns with your purpose, that's a good sign. Otherwise, it's time to seek advice.
6. Use your gut and take advice at the same time.
When Google's early investors advised Sergey Brin and Larry Page to bring in an experienced COO, the two founders instinctively opposed the idea. But, they eventually decided to heed the advice and meet some candidates. One happened to be a regular at Burning Man, just like Brin and Page. So, they made a gut decision to hire Eric Schmitt and history has proved that their intuition was correct.
This is a great example of when to take advice while still relying on your gut to make the right choices. Finding a balance between your own instincts and the experience of others is the key to great decision-making.
Instincts are highly valuable for any entrepreneur, but you can't always rely on them to be right. By learning when to trust your gut, when to follow advice and how to balance the two, you'll make better decisions, all while having fewer regrets if things don't work out.