How to Think in Bets to Make Decisions?
A Product Marketer's guide to not screwing up big decisions.
I think, read, and write a lot about decision making. For example, I published this article some months ago about the Vroom-Yetton decision model.
Today, I’m sharing a different angle.
As product marketers, we're constantly faced with high-stakes decisions that can make or break our products — and careers.
When you're making a big decision, what's your first instinct? For many of us, it's to create a pros vs. cons list. It seems logical: more pros than cons means we should move forward, right?
The pitfall of simple Pro-Con lists.
Imagine you’re deciding between two big options: launching a product in a new region or launching it into a new vertical.
Here's the breakdown:
New Region Launch Pros:
Increased market size
New revenue streams
Global brand recognition
Potential for early adopter success
New Region Launch Cons:
Localization challenges
Unfamiliar competition
So, 4 pros and only 2 cons. That looks like a winner, right?
Now let’s look at the alternative:
New Vertical Launch Pros:
Deeper market penetration
Targeted industry solutions
New Vertical Launch Cons:
High industry-specific risks
Existing competition is strong
Unclear product-market fit
Higher investment in education for the market
Longer sales cycles
Wow, just 2 pros but 5 cons. It seems obvious that the New Region Launch is the better choice... or is it?
But what if the likelihood of those pros and cons happening wasn’t equal? Context matters! We need to be thinking in bets and embracing uncertainty.
We should start by acknowledging that we're often working with incomplete information and that outcomes are rarely certain.
As product marketers, we can apply this thinking to our product marketing decisions:
Play the Odds: Without Going to Vegas.
Instead of just listing pros and cons, try assigning probabilities to each outcome. For example:
New Region Launch:
60% chance of increased market size
90% chance of localization challenges
New Vertical Launch:
95% chance of deeper market penetration
60% chance of unclear product-market fit
Consider the Stakes: Evaluate the potential impact of each pro and con.
A 60% chance of tripling revenue might outweigh a 90% chance of minor localization issues. And a 60% chance of unclear product-market fit can put that 95% of increased users in the market at risk.
Embrace the uncertainty: We can’t predict the future.
If you can, please DM me the winning lottery numbers. Recognize that you can make a good decision that still leads to a bad outcome due to factors outside your control. This mindset helps in learning from both successes and failures.
Avoid outcome-based thinking when making decisions: Wait, what?
This sounds counterintuitive, right? We love outcome-based roadmaps, OKRs and we judge a decision based on the biggest positive outcome (and lowest effort).
But, in product marketing, a successful launch doesn't necessarily mean every decision was perfect, and a struggling product doesn't mean the strategy was flawed. Instead:
Focus on the decision-making process: Evaluate your choices based on the information available at the time, not just the end result.
Learn from both successes and failures: Analyze what went right and wrong in both scenarios to improve future decision-making.
Gather better information: Add diverse perspectives. For product marketers, this means consulting and getting insights from cross-functional teams like sales, engineering, customer support, and other departments.
Seek contrarian opinions: Actively look for perspectives that challenge your initial thoughts. Let others poke your bear.
Use pre-mortems: Imagine the launch has failed and work backward to identify potential pitfalls.
The WRAP Framework. No burrito-making skills required.
I’m a big fan of Annie Duke’s WRAP Framework for Decision-Making. I learned about it in her book "How to Decide," which we can adapt for product marketing decisions:
Widen your options.
Don't limit yourself to just two choices. Could you launch in both the new region and new vertical, but on different timelines?
Reality-test your assumptions.
Use data and market research to challenge your beliefs about each option.
Attain distance before deciding.
Take time to step back and view the decision objectively. How would you advise another product marketer in this situation?
Prepare to be wrong.
Have contingency plans for both success and failure. How will you pivot if the chosen strategy doesn't work out?
As product marketers, our decisions can have far-reaching impacts on our products and companies.
By moving beyond simple pro-con lists and embracing more detailed decision-making strategies, we can make more informed choices and better navigate the uncertainties of our field. Now, the goal isn't to eliminate uncertainty – it's to make the best decisions possible with the information we have.
Let’s do this! Next Steps.
For your next big decision, try assigning probabilities to potential outcomes instead of just listing pros and cons.
Implement a pre-mortem exercise with your team before your next product launch.
Review a past decision using the WRAP framework. How might the outcome have been different if you'd used this approach?
By incorporating these strategies into your decision-making process, you'll be better equipped to navigate the complex landscape of product marketing and drive your products toward success.
If these tips help you nail your next big decision, let me know!