How I Avoid $1M Business Mistakes With This Decision Framework (#477)

Shaan Puri

And I **highly, highly recommend** this because, again, judgment and decision-making is the most important thing you can have. People are terrible at actually honing that skill. They always say, "Oh yeah, I learned a lesson." Really? What was it? Did you write down what you were thinking then and what you've learned since? No. We put very little effort into this. So, I have this list of questions that I sell. I have this document that I think I might have shared once before, but I call it the **Decision Register**. In this document, I basically write down every major decision that I make. For example, the very first one that I have in this list is from when I was 18 years old. It says, "Quit pre-med." I'm sorry, I was actually 20 or 21 years old. So, I'm a senior in college, I'm pre-med, I take the MCATs, but I decide not to go to med school.

Sam Parr

the most obvious obviously good decision you've ever made

Shaan Puri

So, I then have the call: "Worst doctor! You'd be the worst doctor." I'm like, "We could fix this the obvious way, but let's try something. Stick out your tongue."

Sam Parr

we'll use

Shaan Puri

that for your acl alright so and then I have a next call and it says did it seem big in the moment because one learning was a lot of the biggest decisions didn't actually seem big in the moment but turned out to be an important decision and then I basically have like kind of the what was the one decisive reason why so if I boil down like not a long list of pros and cons but like what's the one thing that like the main reason I made that decision and then outcome and lesson learned and so I'll give you another example a decision sell it to twitch and not to facebook those are the 2 final companies that we had had given us good offers and we turned down more money from facebook to take the twitch offer did it seem big yeah felt big in the moment why because after 6 years of a startup I was tired and facebook was looking at us like we were gonna save their kinda gaming initiative you know they were looking at us to like make that make it happen whereas like twitch has already won I'll like you know I can just cruise control when I'm here like let me just go play for the winning team versus trying to like take the underdog from the bottom of the league to the top in terms of this industry and you know then it's like you know one of the lessons learned is you know I don't know what the other side was so I know what I got out of it so I think it was a good call I'm happy with the decision but you never know and that's how a lot of these decisions go so I have this decision register now a version of it would be like there's a bunch of investment decisions here you know like not buying ethereum and bitcoin when the smartest people I knew literally working in my office were doing it at the time didn't seem like a big decision I just kinda overlooked it I didn't even realize this was a big decision I was making seemed weird I just kinda laughed at something because it seemed strange rather than leaning in and trying to understand why why are you so excited about this and like could I place a small tester bet right so terrible decision bad call you know and I didn't pay attention to a signal which is what the nerds do on the weekend will probably all do you know in a few years and this is what the nerds were doing on the weekend back then they were really interested in cryptocurrencies okay so anyways I have this like decision register now with it I have a bunch of like questions that I ask when I'm gonna make a decision let me pull that doc up real quick

Sam Parr

and you've been is this a running document that you've had for 10 years

Shaan Puri

No, I started it like 4 or 5 years ago. But I tried to go back and figure out, like, do I...

Sam Parr

and it's like a Google doc

Shaan Puri

Just a Google Doc, exactly. I highly, highly recommend this because, again, judgment and decision-making is the most important thing you can have. People are terrible at actually honing that. They always say, "Oh yeah, I learned a lesson." Really? What was it? Did you write down what you were thinking then and what you've learned since? No. We put very little effort into this. So, I've basically realized that one edge, one source of alpha, is to take a disproportionate amount of time compared to most people. It doesn't even take that much time, right? It's like a couple of hours twice a year. But just doing that exercise can improve my judgment at a rate maybe 2 or 3 times what a normal person's would do. And then all of a sudden, people are like, "Man, you know, how do you get this wisdom from?"

Sam Parr

God, Sean, you're so good at... you're so wise. Yeah, you're such a good decision-maker, like those abs.

Shaan Puri

like you gotta do something

Sam Parr

yeah put it on me

Shaan Puri

Alright, so here are the decisions and the questions I ask for an investor. Here's what I have to run through: 1. **What is the decision?** Explain why I'm doing this in a tweet-length format. I have to be able to explain why I'm making the decision concisely. 2. **What alternatives did I consider?** Did I consider any alternatives? 3. **What am I feeling?** I have some options like extreme fear, pessimism, neutral, boredom, fatigue, greed, extreme greed, and FOMO (fear of missing out). Those are the feelings I could be experiencing right now. 4. **How long have I been thinking about this decision?** Is it a few hours, few days, few weeks, few months, or few years? 5. **Who and what tipped me over the edge?** What was the last conversation, podcast, or thing I read that made me take action? 6. **What are the secondary benefits of this decision?** For example, can I sleep better at night because I'm not worried about a margin call or something like that? 7. **If I took away all the secondary benefits, would I still make this decision?** Yes or no? 8. **What makes me think I'm right?** I have to write down why I think I'm right about this. 9. **What makes me think I might be wrong?** 10. **Upside if I'm right, downside if I'm wrong.** I have to define those two aspects. 11. **What follow-up decision should I make to make this decision more successful?** 12. **How do I predict this is going to play out?** I have to answer how I predict it's going to unfold. Finally, I set a date: **What date will I revisit this?** I will go revisit this decision later. I did this when I sold all my stocks, so I can look back at this and ask myself: Was I right? Was I wrong? What can I learn from how I was thinking then? This way, I can think better the next time.

Sam Parr

how many decisions do you have that you've documented this way

Shaan Puri

I think I have done this maybe 4 or 5 times now in the last 2-3 years. You know, like: - Selling new M1 [likely referring to a car model], for example - Making a big financial decision - Investing in a private company - Deciding to rent instead of buy a house right now Things like that.

Sam Parr

do you consult your wife when you do these things as well

Shaan Puri

no I probably should she she wishes I did but I don't

Sam Parr

well not necessarily like asking for permission but like getting your her perspective

Shaan Puri

Yeah, that's the problem. I want her perspective, but I feel like there's... The messed up psychology in me is like, it kind of turns into asking for permission at some point. You know? Like, "You gotta be aligned to do this," and... What if she's not aligned? Maybe I'll just do this, which she hates.

Sam Parr

And how much decision... or how much like... When you're selling the Milk Road - yeah, you sold the last company, I think, before you were married - but when you're selling the Milk Road, are you like, "Hey, just so you know, this is happening"? Or is it like, "Hey, it's happened"? No?

Shaan Puri

No, I talked to her a bunch. I got her opinion on it, you know, several times during the process. She's very helpful with that. It's more of the stock or startup investments that I don't really run by her because I'm like, "Man, I'll have to explain so much context." It's not an area she pays attention to. She doesn't pay attention to the stock market; she has never bought a stock in her life. She doesn't know about startup investing, angel investing, or these companies. So I'm like, "Oh man, the context for that is really hard." But selling a decision to sell a company or buy a company? That's much easier to explain.

Sam Parr

Right, no, I consult my wife a ton on this stuff. But I think it's more so that I just need to speak this, and I need you to just be a blank.

Shaan Puri

Sarah's a little bit like that character on *Billions*, the office... like Wendy. Yeah, like the mindset coach or psychologist or whatever. I feel like she's like Wendy. Her demeanor is so even-keeled.

Sam Parr

yes she's calm

Shaan Puri

And she's like... I could see her being very third-party about it, versus saying like... She's like, I could see her being like, "I'm gonna help you with this decision," versus "This is *our* decision. I'm gonna have my opinion, you're gonna have your opinion, then we're gonna figure out whose opinion is right." Totally.

Sam Parr

Yes, and I think that I have a history of making emotional decisions. So, a lot of times I need someone just to be like, "Hey, don't be crazy. Don't do this right now. Just sleep on it. Just wait." The decision register is good. I think you're very talented at these frameworks. I'm probably going to steal that for Hampton because I think it's quite good. So you have to post it on the YouTube link so I can actually read it. I do something similar... it's different. This is more organized.

Shaan Puri

I'll put a link to it in the description, the show notes for YouTube and whatever. You can just... I'll make a template so people can make a copy of it for themselves.

Sam Parr

And that's on... well, we'll plug your thing. Smallboy, is it dotco or dotcom? Dotco, yeah. A boy spelled normal or like ballerboy?

Shaan Puri

Not B-O, no, no. Like, is it like "boy" small normal? Yes, it's just smallboy.co. Yeah, dude, that thing's growing like crazy, man! We have like 100,000 people on the list now. It's amazing, that's... in a very short period of time.

Sam Parr

did you start at 0

Shaan Puri

I started at 40K... 38K, I think. When did you start it? So I had 38K from, like, you know, old email newsletter... "5 Through Tuesday" type of thing. And then basically at the start of this year-ish, like maybe February or something.

Sam Parr

6 months

Shaan Puri

ago yeah maybe 5 6 months ago started

Sam Parr

any paid marketing

Shaan Puri

Yeah, paid marketing... We do a little bit of paid marketing, you know. Still, I think half is like organic or something like that. So, you know, it's like half organic growth, half paid growth.

Sam Parr

Dude, newsletters, man! They're the best. Yeah, they're the best. I take all the credit. I take 100% of the credit. It's not your effort or your day-to-day hard work; it's all me just saying newsletters are cool.

Shaan Puri

exactly

Sam Parr

I'll take I'll take 100 newsletters are awesome

Shaan Puri

Dude, my decision to register for why to start The Milk Road was like, "I think I know how to do this." I watched Sam do this from scratch with The Hustle, and I think if you took The Hustle + crypto, that would work. That was like, you know, the whole thing. I'm pretty sure Hustle + crypto would work. Secondary benefit...

Sam Parr

Dude, hustle + anything will work. Just do the hustle. Or, as you say, it's like you're the Milk Road of business and tech news.

Shaan Puri

you

Sam Parr

You know what's the hustle? It's like The Milk Road but for this thing. But no, The Milk Road, The Hustle... anything. It's all that will work for the foreseeable future. I think this data is wrong every freaking time.

Hubspot

Have you heard of HubSpot? HubSpot is a CRM platform where everything is fully integrated.

Hubspot

Woah! I can see the client's whole history: calls, support tickets, emails. And here's a task from three days ago that I totally missed.

Shaan Puri

HubSpot. Grow better. Well, you know what's funny? I don't know how much you get hit up by these people who are doing newsletter businesses—probably all the time. I ignore them. You ignore them. I've learned to ignore them because my friend Ramin has this great little framework. He says that every business is hard; it's just hard in one of two places. It's either hard 0 to 1, or it's hard 1 to end. What he means by that is that some businesses are really hard to get started and gain initial momentum. Then, some businesses are really easy to get initial momentum, but turning that into a valuable business at scale is really hard. I would say, because of this podcast, people basically see, "Sam did it with newsletters; Sean did it with the newsletter; I too will do the AI version of this." You know, I'll do the whatever version of this. Newsletters are very easy 0 to 1 businesses; they're not easy 1 to end. As I've talked to people who are doing this and they're asking for kind of advice or whatever, I'm like...

Sam Parr

talk to me in 6 months

Shaan Puri

I told one of the AI guys straight up, "You're gonna drive this off a cliff and you don't even realize it yet." He asked, "Why?" I explained, "To explain this to you will take some time, and I don't really feel like coaching that. But I'm just gonna tell you: please don't fall in love with this as is. This isn't gonna work. This is not the answer to making something successful." It's very easy to see just the subscriber count going up. If you're in a hot space like AI, you'll get easy sponsorship revenue for the next 6 to 12 months. But if you want to take this to the finish line—where this thing is spinning off $1,000,000 a year in profit and you're able to sell it for maybe tens of millions of dollars, which is what all these people I think would dream of doing—that's where the real skill comes in. I think that a lot of these people are not equipped to do that based on what I hear their plans are.

Sam Parr

The person who's done it best, I think, is Austin Reif for Morning Brew. It's 10 years old now. I think they publicly said that revenue is in the $70 to $90 million range. I forget exactly what they said publicly, but something like that. They have 150 employees. I forget the exact number. I went to their office, and dude, he's got like a tech office setup. It's a beautiful office. He has done it all the right way. I mean, he's made a bunch of errors just like everyone, but he's done such a good job of having durability and a long-term view, while also being able to move quickly. That guy's a machine. He's one of the more impressive operators out there.

Shaan Puri

The thing is, people see the hustle and they see just like the tip of the iceberg. It's like this iceberg theory: when you see an iceberg in the water, you're only seeing the top little bit. You don't see the giant 90% of the mass that is under the water. The benefit for me with Milk Road was that I was there when you were doing just events and then blogs. Then you pivoted to the newsletter. We were in a mastermind group, so we checked in every month. Every month, we would meet and talk about what was going on and what you were trying to do. I got to see the 5-year under-the-water build-up. I think most people don't have that. That's just luck for me that I had that, and that's why Milk Road was able to work a lot better than if I hadn't had that. Most people don't have that; they're just trying to copy what they see on the surface level. That'll get you kind of the 0 to 1. I don't know if that's going to get you the 1 to n. I think for most people, not. I think if you're a great entrepreneur, you'll make it work no matter what. The problem is, if you survey 10 entrepreneurs, they all think they're a great entrepreneur. But, sort of by definition, not everybody's above average, right? You can't... you know, maybe 1 out of the 10. The problem is all 10 think that they're that 1, and you know, that's going to be... yeah.

Sam Parr

They're challenging what they don't see. Morning Brew at this... The Hustle, I don't know how many employees they have now, but we don't sell ads. With Morning Brew, in order to make $70 or $80 million a year in revenue, you need 80 salespeople. And if you have 80 salespeople, you also need 30 people to handle the stuff that they're selling. You also need like a...

Shaan Puri

Evergreen content, like you guys talk about, is what's going on in general with business people who are doing these AI newsletters right now. They're like, "Here's the latest new demo in AI." Guess what? 18 months from now, that stuff is not going to be interesting at all to anybody. Advertisers are going to realize that the type of person who just wants to see an AI demo is not very valuable to advertise to. Milk Road worked because people who read about crypto, like what's going on in crypto, were crypto investors. Crypto investors are a very valuable audience segment. That was very different than just saying, "So, crypto, AI, they're all just topics, right?" No, no, no. The people who write about crypto were putting tens of thousands, hundreds of thousands, or even millions of dollars into those portfolios. They were a very valuable customer. That's not true with an AI reader. But they don't see that. They just see the surface-level stuff. They're not thinking critically enough to realize that they're just riding this kind of current momentum where every day there's a mind-blowing demo, and people are curious. 18 months from now, that's going to fatigue out. That is not going to be the case. Also, your advertisers are going to realize that, like, cool advertisers of a random guy who likes to see the cool stuff that AI could do, that's not translating into a lot of money because that's not a very valuable audience demographic. It's not going to work.

Sam Parr

And you can't be a mercenary about the content. A lot of people are like, "Oh, I just hired this person overseas, and we use AI to actually make the content." That's really hard—not impossible, but hard. At the end of the day, when you have a newsletter, you have to get someone to act. You have to say, "I'm gonna be at this location at this time," and if no one shows up, then your stuff sucks. Getting people to do that is really, really, really hard. It's very challenging. At the end of the day, it's about getting people to take action, whether it's to buy something or to show up somewhere. That's really fucking hard if you're a mercenary versus a missionary. If you're all in on this, that's why Milk Road works. One of the coolest things you guys did was, "I invested this much money into crypto; here's my portfolio. You could see it as we go. I am in this, and I'm gonna talk about that."

Shaan Puri

I talked about the stuff that, like, each day, it was basically, "What is the thing I'm most curious about?" That was the only guiding principle. It wasn't like news; it wasn't announcements. If those were in the newsletter, cool, that's fine. But the lead story had to be the thing that I thought was most interesting, which was sometimes Twitter drama, sometimes a cool product, sometimes a price analysis, and sometimes whatever. That's very different than if you hire a journalist or an aggregator to basically summarize headlines from stuff. You know, that worked for us. I don't think that's the only way to make it work, but it was one of the ways where it felt very different. Like you said, if we said, "Hey, we're going to be here at this time of the day," people would come because they were excited. They were excited to meet us; they were excited to meet other people that are like them. The brand had some influence on people, which is what you need in order to do this. If you just throw up a quick Beyhive newsletter and you get, like, 12,000 subscribers, the number of subscribers is really the wrong metric. I guess that's the other way of putting it. It's the easiest metric, and again, the easiest metric is not necessarily the right metric. It's the easiest metric to look at, but I don't think it's the right metric to look at for a newsletter.

Sam Parr

This is one of those episodes where we talked about stuff that I personally care about. I could talk about those newsletter crap forever. I could talk about personal finances forever. This rate, it might be a high ratio of things we love to talk about, but maybe our audience doesn't all entirely love. But I'm very eager to see the response to this. I could talk about this stuff forever. This stuff actually interests me... like, totally.

Shaan Puri

And by the way, I think that's the only way this podcast can work. It's like... I was watching this thing with Joe Rogan. Joe Rogan doesn't go on very many other podcasts, but one of the ones he goes on is like this "Breaking Points" news thing that he likes. So they interviewed him, and they go: "Joe, what... you know, like everybody does podcasts, everybody does interviews. Not everybody's having... like, what you've created with JRE [Joe Rogan Experience]. What are you doing differently?"

Sam Parr

breaking points is awesome yeah I know breaking points yeah

Shaan Puri

Sagar and I forgot what her name is. There's the woman there too. They're good, and so they...

Sam Parr

and what'd he say

Shaan Puri

at first he just tries to brush it off he's he's like I don't know I don't like I don't know it's just like kinda like fake humility but also like I think he's trying to make a. Which is it's not some calculated thing and and then the but the guy pushes he's like but there must be something like whether you whether you planned it or you intuitively do it like you agree there's a difference between what you're doing and what other people are doing and there's a difference in the results you're getting like just if you had to think about it if you had to answer what would you answer just kinda kinda pushing him and he goes he goes I think that's the thing I don't have a like I don't come in with this sort of like plan or agenda he goes look when I started this podcast I didn't think anybody listened you couldn't even tell if anybody was listening and he's like so I just really had nothing to lose and I just decided to do it the way I wanted to do it so like I just wanna like if I'm chilling with my friends and we're smoking weed and that's what the episode is great because that's what I wanted to do if I'm fascinated by this alien conspiracy and I can talk to this scientist great that's the conversation I wanna have everybody told me like this needs to be 1 hour long it needs to be shorter 3 hours is just too long he's like but I didn't like how the conversation was gonna be in an hour I liked having the 3 hour conversation so that's what I did even though it like you know broke the rule it wasn't like audience driven he goes and so now yeah he's like basically that's what was working so I just decided not to change it he's like basically I just this podcast is a massive education for me I have the conversations I wanna have in the way that I wanna have it and you know I just don't do things that are like lean into this the audience is really responding to this he goes that's how you end up like those late night talk shows where everything is just fake like the host is fake the interactions are fake it's just like it's almost a thing it's quote unquote professional but it's the least real thing and he's like I don't think people like that actually he goes podcasts are professionally unprofessional and he goes I just don't read the comments and I don't try to do things based on what the ratings reviews are gonna be he goes I realized the only way for this to be interesting was if I'm actually interested in it I he's like you can't fake being interested in it for very long it comes through he's like so the only way to do this is if I'm interested in it and then I'm just the audience will be what it's gonna be at that.

Shaan Puri

Like, it'll just be the other people who are interested in this, and that's sustainable for like, kind of forever. I thought that this relates to what Hasan Minhaj said to me once. He goes, "I'm not..." I asked him, "Why aren't you on TikTok, bro? Why aren't you more on Instagram? You could be killing it, dude! These are growing." I'm giving all the logical reasons to be on. He goes, "I don't wanna be on because I know to win in those games, you just have to dance for the algorithm. Whatever the algorithm wants, that's what you gotta do." And he's like, "I just don't wanna do that. I wanna be an artist." He said, "The best comedians, they’re free. They just do what they want, and they are the judge. They don't really care. They pick up on signals from how people react to it, but they are the end decision-maker of if something was good or not." He said, "You see this in everything. I love basketball. You see this on the basketball court. Guys like Steph Curry or Luka Dončić, they're free. They're just playing how they wanna play, and that's it. They're not overthinking it. They don't have this voice in their head that's constantly judging and thinking. They're actually free to just create their art." And he's like, "That's how the best people operate." Joe Rogan said the same thing about comedians. He goes, "If you watch Dave Chappelle, he'll do these shows in front of like 50 people. He's done shows in front of 50,000 people, but he does it for 50 people. He's having a great time."

Sam Parr

he's out there smoking a cigarette and chills

Shaan Puri

He's just smoking a cigarette, he's talking... he's not even doing planned material. And he's having a great time because he just likes doing it this way. That happens to have gotten him a huge fan base, and he's like, "That's kind of my... if you wanted to say what's your strategy, it's like that's my strategy." I think that's just a more admirable way to approach content creation, versus this "I'm gonna just cater to this moving target of what my audience wants."

Sam Parr

Well, there's a way of not truly caring, but then you also... I like seeing our feedback. We had a guy message us, and he's like, "Someone died in my family, and I listened to you guys a ton." And I'm like, "Oh, that's sick." Or someone would be like, "Man, I love when you talked about this." I'm like, "That's awesome." I feel good about that. I want to make people feel good as well while also being selfish and only talking about what I want to talk about. But there is a small motivation; it feels good to make others feel good. However, we don't go crazy on that.

Shaan Puri

Yeah, yeah, yeah, exactly. It's just that, ultimately, who's in charge? You might have three co-founders in your business, but ultimately, who makes the decision? If push comes to shove, obviously you all talk about it and you all have a say. But if a decision needs to be made, who can make the final call in a tough spot? I think that, on the content side, who makes the tough call in the end has to be... Do you think it's good? Do you like it? Are you interested in it? Alright, that is, to me, the highest order decision maker.

Sam Parr

what do you what do we wanna wrap here

Shaan Puri

yeah let's wrap it up alright

Sam Parr

we have a bunch of stuff next week but that's the pod