41: Looking ahead, looking back.
- August 27, 2017 -
“Short-term benefits are the kind[s] of things that can confuse you,” says Alice Winkler, host of the What It Takes podcast, in an episode on Jeff Bezos. “But if you stay focused on the long-term, you’ll make better life decisions and minimize regrets.”
While there are a great many things of interest to be found throughout that episode of the podcast, it was those comments on short-term thinking that were of the greatest interest to me. I think you’ll discover why in a moment, but, first, let’s start with the backstory.
Prior to founding Amazon, Bezos was working as a senior-level employee at a hedge fund on Wall Street. And so, when he decided to make a serious attempt at building an internet company around June of 1994, the timing of it all left him in something of a difficult position.
You see, if he were to have quit his job right then, he would have been leaving the hedge fund in the middle of the year — and, as a result, he would have had to forfeit his annual bonus. For most of us, an annual bonus likely wouldn’t be large enough to have a significant impact on our decision-making for the year ahead. But for a Wall Street executive, an annual bonus tends to represent a rather sizeable portion of one’s income, making it a very real concern impacting Bezos’ decision about whether or not to take the leap.
Now, if he had based that decision solely upon the risks and rewards of the short-term, there’s a good chance that Amazon never would have been founded. But, as we know, Bezos didn’t limit his thinking to the short-term. Instead, he chose to focus on the long-term, and he did this by putting into practice something which he calls “regret minimization,” an approach to decision-making that aims to minimize regrets over the course of a lifetime.
While there was no question that it would have been a great short-term risk to walk away from both a well-paying job in the financial industry and a sizeable bonus, it was nonetheless impossible for Bezos not to recognize that, in the long-term, he would have regretted not taking the risk.
And so, choosing to focus on his principle of regret minimization, he left behind both his job and his bonus on the off chance that his plans for an internet company might one day pan out. The rest, of course, is history.
When faced with the choice between a guaranteed short-term gain and a potential long-term gain, Bezos ignored the urge to focus on immediate gratification and chose, instead, to think of his life from a long-term perspective. He chose to consider how he might feel about that decision not towards the end of that year, but towards the end of his life, at a time when his thinking would be driven not by questions like What should I do next?, but rather What do I regret not doing back then?
Many of us, I think, are already doing something similar when we make plans for the future. But maybe this is something we should all be doing more often.
Backwards and forwards,