“A single decision has the power to change your life”
We have all heard this phrase, restated, time and again in our lives by someone or the other, in a slightly distinct fashion, if not using the exact same words. In the case of Jeff Bezos, one of the richest men on the planet, a single decision did actually end up changing the trajectory of his life, and the world of commerce.
The story dates back to 1994. At the time, Jeff Bezos was working in a senior management position in a company called D.E. Shaw, a successful quant-focused hedge fund. Being one of the few trusted men of his boss, Bezos was on track to a have bright career.
During the course of this tenure, Bezos was tasked with leading the efforts of looking into this new thing called the ‘Internet. Bezos was given a brief was to come up with Internet-based ideas D.E Shaw could launch and scale. While working on this project, Bezos realized the Internet held immense potential.
Bezos originally came up with the idea of an ‘Everything Store’, where an intermediary would connect manufacturers & customers, enabling shopping all over the world through the platform. He eventually settled on the idea of launching just an online book store in the beginning because launching an ‘Everything store’ would be impractical.
The online book store idea retained the advantage of having unlimited selection powered by the internet, and, used books as the launch vehicle because they were pure commodities. Unlike clothing, a book copy in one store was exactly the same as it was in another, so buyers would always know what they were getting.
But Bezos knew that it would never be able to truly bear the fruits of the idea if he pursued it inside D.E Shaw. So, he went and told his boss, David Shaw, he was planning to leave the company and create this online bookstore by himself.
Shaw, unlike the typical boss, was open to Bezos pursuing the idea on his own even though he would himself work on the same idea inside D.E Shaw. Reminding Bezos that he already has a great job, Shaw recommended Bezos take a few days to rethink his decision to leave.
Tasked with making what would go on to become the central decision of his life, Bezos began to look for frameworks to simplify the decision-making process. Ultimately, he came up with what he named “The Regret Minimization Framework.”
Here’s how the “Regret Minimization Framework” works: When faced with making a life-altering decision, project yourself forward to age eighty and look back on your life. Ideally, you want to have as few regrets as possible when you’re about to die, so ask yourself, “Will you regret not doing this?”. If the answer is yes, do what you will regret not doing later.
A few years later, Bezos expanded on he thought through the decision of leaving D.E Shaw using the regret minimization framework,
“I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way… it was incredibly easy to make the decision.”
Bezos’ decision of leaving his comfortable job and starting what was initially just an online bookstore would give the world Amazon, and make him one of the richest men on the planet.
What makes the “Regret Minimization Framework” a powerful thinking tool is that saves you from biases of the present moment by pushing you way ahead in the future. It changes the entire frame of reference with which one would look at the available choices.
When you’re thinking about the regrets you might encounter when you’re old, you also tend to feel less fearful. In a way, the regret minimization framework also minimizes fear and maximizes courage.
So the next time you are faced with making a life-changing decision — in your career, business, or life — give the Regret Minimization framework a try.
If you do end up making the right decision using the framework, don’t forget to thank Bezos and pass on the wisdom in your circle.