3 Big Questions to Sharpen Your Decision-Making Skills
Free Book Preview: Coach ’Em Way Up
When we started our first business in 2001, we were 16-year-old high school students and had no idea what it takes for a business to be successful. We just knew we were solving a problem that was acutely painful for us. In our case, we found the process of creating bibliographies awfully tedious, so we developed a website called EasyBib that would create citations by entering the name of the book or website you were using in your research.
Fast-forward 15 years and EasyBib, along with our other portfolio sites, were reaching more than 30M students yearly. Collectively, they became one of the largest education assets on the Internet.
Someone asked me recently, “How did you know you would reach so many people? How did you think about the opportunity in this space?” The truth was, we didn’t follow any laid-out process or framework. We followed our instincts about this problem and built a product that addressed it. We also had no idea what an MVP was. We just built what we wanted, and did everything we could to tell people about the service.
Our traction was a blessing — and a curse. It gave us premature confidence that we knew what we were doing and had the chops to be successful. As we focused on our business full-time after college, many of our decisions would be made using the same formula of gut intuition and logic. At times, this served us well, but at other times, held us back.
It was only when we were acquired by a public company, Chegg, that we sharpened our decision-making tools as operators. Dan Rosenweig, the CEO of Chegg and former COO of Yahoo, taught us to ask three key questions in our decision-making.
1. Is it big enough to matter?
Is an idea big enough to matter, or as we grew fond of saying, is it B-E-T-M? When running a business, there are thousands of decisions and directions to take. Should you redesign your website, should you add a new feature, should you address that customer complaint?
The number of things you can do or try with your business is endless. By asking if it’s big enough to matter, you’re forcing yourself to prioritize the initiatives that will really move the needle. Are a few customer complaints about a fringe bug big enough to matter to drive your business forward? Probably not. Does staying focused on a site redesign that you believe will improve conversions 20 percent and add $1M in revenue big enough to matter? Probably.
Understanding what is big enough to matter is relative, too. You might have a number of big initiatives. At Chegg, we learned to start sizing our initiatives. If we believed that adding a new feature could improve retention by 30 percent and improve revenue by $5M, suddenly the site redesign that could drive $1M in revenue wasn’t as big enough to matter.
Asking if an opportunity is BETM is also important for evaluating businesses you might start. We launched a new gaming initiative with Solitaired, where we are trying to connect brain training to classic games. The first question we asked is if the market for classic games and brain training is big enough to matter, and the answer was a resounding yes.
2. What problem are you solving?
Everything you do should address an underlying need or problem, and this should be an easy question for you to answer. With EasyBib, we thought that bibliographies were difficult and time-consuming.
Sometimes by asking this question, you might find that you’re not necessarily solving a real problem and that you should reconsider what you’re doing.
At one point with EasyBib, we took the billions of citations created on our site and indexed them to create a search engine. We poured a ton of money into building this, and we thought we knew in our bones that this feature would be a big one. It was a dud. It turns out students didn’t have a problem discovering sources through Google or their library, nor did they have an underlying need to see what others were citing. We simply weren’t solving a real problem.
3. How do you measure success?
So now you know what problem you’re solving and if it’s big enough to matter. How do you hold yourself accountable and measure if the initiative is working or not? If you don’t know how to measure success, you won’t know when to pull the plug, or how to iterate and evolve the initiative.
This really boils down to KPIs and road maps. Let’s say you are redesigning your landing page. You’ll want to set timelines at metrics. Perhaps you expect to increase conversions by 15 percent and to redesign the page within three months, all of which is BETM. That becomes your benchmark for measuring success.
Once those goalposts are established, you’re now able to evaluate your progress toward it and ask why or why you aren’t hitting those goals. If redesigning the homepage yields a 2 percent lift in conversion, you might come to the conclusion that redesign efforts on the homepage aren’t BETM, or that you need to reevaluate your design ideas.