The Trap of Research and Decision Paralysis: Start Acting Now

Summary

• Overcome Decision Paralysis: The Singaporean educational focus on rigorous data collection can lead you to stall, mistaking passive information gathering (reading reports, listening to podcasts) for productive work.
  

• Apply the 40/70 Rule: Recognising that research follows the law of diminishing returns, you should adopt General Colin Powell's strategy of making decisions when they have between 40% and 70% of the information, rather than waiting for 100% certainty.
  

• Treat decisions as "Two-Way Doors": Adopting Amazon’s "Bias for Action," you should view most startup decisions (like pricing or features) as reversible two-way doors, where practical market testing provides clarity that theoretical research cannot.

Did you grow up in Singapore and receive an education here?

If your answer is yes, then you’d be familiar with our rote-based method of instruction, where we drill thorough research, rigorous source citation, and comprehensive data collection before arriving at a conclusion.

This same meticulousness follows you well into your adulthood, guiding your hand in making decisions—both personally and professionally. While such rigour would serve you well in conducting due diligence, it may not be the most ideal when you’re starting a new business.

This is a condition known as decision paralysis, where you over-analyse a situation to the extent that you don’t make a decision or take action, in turn paralysing the outcome. You tell yourself you are working by reading market reports, listening to podcasts, and surveying Reddit. But you aren't working smart. You may, in fact, be stalling.

This article sheds light on analysis paralysis and what actionable steps you can take to overcome this inertia to kickstart your entrepreneurial journey.

The Law of Diminishing Returns in Research

Research follows a curve of diminishing returns.

• The first 20% of research gives you 80% of the value. You understand the customer and the problem.

• The next 80% of research gives you only 20% of the value. You are just looking for reassurance.

You will never have 100% of the data. In business, if you wait until you have 100% of the information, you are too late. 

Decorated US Army General Colin Powell famously used the 40/70 rule, where he made a decision when he had between 40% and 70% of the information. Under this rule, less than 40% is reckless, while more than 70% is slow.

Given that it is impossible to be perfectly equipped with all the facts, it is thus imperative for you to take decisive action once you’ve established a sound understanding of the basics. 

The Bias for Action

Take a leaf out of Amazon’s playbook. It lists Bias for Action as one of its core leadership principles, stating that: 

"Speed matters in business. Many decisions and actions are reversible and do not need extensive study."

Indeed, it’s better to simply drop the research and take that first step. In fact, most decisions in a startup are two-way doors.

• One-way door: A decision that is nearly impossible to reverse. Examples include:

  • Selling your company

  • Giving up 50% equity

• Two-way door: A decision you can back out of. Examples include:

  • Testing a pricing model

  • Changing a website headline

  • Launching a new feature

Students often treat every decision like a one-way door, terrified of being wrong in their conjectures. But in a startup, getting things wrong is the fastest way to learn what is right. Just like how you cannot learn to swim simply by reading a book about fluid dynamics, you can’t start a business without practical application.

Instead of conducting traditional research, try selling your product to real people on the ground. Consider the words you’d use to address your audience’s pain points, and how your MVP solves them. The data you collect from these hands-on exercises will prove to be far more valuable than rote research.

In short, action creates clarity. Movement creates momentum.

How Mezzanine Enterprise Eliminates Decision Paralysis

To propel your immediate action, Mezzanine Enterprise helps you streamline the company incorporation process by taking over the administrative paperwork. From license and grant applications to essential filings and documentation for compliance, we stand ready to shoulder your administrative burden so you can focus on building your business. 

Talk to us now to get started today: https://www.mezzanineenterprise.com/contact