Substitution Heuristic - Are You Really Answering The Right Question? (Edu)

Yaniv: This happens with questions that are easy to ask, but hard to answer, how can I be happy?

People don't know how to answer that one, so instead, they substitute it with a question, How do I make lots of money? Or, How do I get lots of status? And then they set about answering that one instead. And then, they answer the wrong question. You know, they've got a lot of money and they're still miserable, or whatever it is.

and they're like, huh, how come I tried to answer the question and not happy? And it's like, because you've substituted the question with something simpler to answer. But the problem of course is, By answering the question that is easier to answer, you're not necessarily getting the answer to the question that you actually care about, which is how can I be happy?

How can I live a fulfilling life?

Chris: Hey, I'm Chris Saad.

Yaniv: And I'm Yaniv Bernstein.

Chris: so you wrote this awesome article on LinkedIn And I thought the post was super cool. So I thought, let's unpack that, walk through it discuss and debate together.

tell me more about what do you mean startups and founders are asking and answering the wrong questions.

Yaniv: so I've been thinking a lot about the great thinkers and, about cognitive biases and fallacies that lead us in the wrong direction. And so I actually came across this concept, I sometimes called the substitution heuristic, that was first really explained by Daniel Kahneman, the Nobel Prize winning behavioral economist.

he said that What happens with people, and this is the quote, when faced with a difficult question, we often answer an easier one instead. Usually without noticing the substitution. And so really started thinking about that in the context of startups.

this running theme, Chris, we have in this podcast is that Venture scale, Silicon Valley style startups are often thinking about things the wrong way. And I actually think this substitution heuristic, this cognitive shortcut that we take is a big part of it. So when I was thinking about this, I was like, there are really only three questions that Every venture scale startup needs to answer in the sort of the abstract.

And those three questions are, one, can we create something valuable enough that people will make it part of their lives? And when I say people and lives, I'm using it in the broad context, companies will make it part of their operations, etc. That it will actually be used, right? That it is useful and valuable, Thing two, that value that we are creating, can we deliver it at massive scale? if we're delivering massive value as like a shoeshine boy, then we can't scale that. Right? And then the third thing is, can we do that? can we deliver that value at massive scale in a highly profitable way?

if you're a regular listener to this podcast, you know, those are the three things, right? Because what you want to end up with your end state of building a Silicon Valley style venture backed startup is a huge money printing machine. We've used that phrase before, right?

So it's like, those are the three questions that you need to answer in order to say, can I build a money printing machine? so it's pretty simple. Why do we go the wrong direction so often?

Chris: Yeah, it really is interesting. I actually, I wrote a similar post maybe year or two ago and it was very similarly framed around, Hey, building a Silicon Valley scale startup is really simple. And, you've summarized it in a very similar way, which is like, Build something that solves a real problem.

Put it in front of the right people, and monetize. I mean, it's like step one, two, and three. it's so easy to say, and so very, very hard to do. Now, of course. It's hard to do because those three things are hard to do, right? It's hard to build a real solution to a real problem that is habit forming and meaningful and useful.

It's hard to find your audience. It's hard to find your customers and help them understand what you've created and help them internalize that. and it's hard to find a business model and economies of scale. and efficiencies of operations that, do all of that profitably. Those are just hard things, but they're not hard to understand.

They're not hard to appreciate, But the other reason it's hard as the premise of your post says, and the premise of this episode is people don't actually engage with those questions. They don't actually engage with those problems. they decide implicitly. That they're too hard, or they overcomplicate it because they want to be big boys and girls doing big business, or they get distracted by constraints and limitations.

yeah, Yaniv, think this, particular reason that these particular questions don't get answered. That we're dealing with today is, that one I mentioned in the middle, which is, really like that you've discovered this, cognitive, trick we play on ourselves, which is like, Oh dear, that's a really hard question.

I know, I know. There's an easier question. Let's talk about that instead.

And

Yaniv: exactly. And, once you see the substitution fallacy or substitution heuristic, you start to see it everywhere, And if you think just of your personal life and you know, the big questions,   and this happens with questions that are easy to ask, but hard to answer, the question is, how can I be happy?

People don't know how to answer that one, so instead, they substitute it with a question, How do I make lots of money? Or, How do I get lots of status? And then they set about answering that one instead. And then, they answer the wrong question. You know, they've got a lot of money and they're still miserable, or whatever it is.

and they're like, huh, how come I tried to answer the question and not happy? And it's like, because you've substituted the question with something simpler to answer. But the problem of course is, By answering the question that is easier to answer, you're not necessarily getting the answer to the question that you actually care about, which is how can I be happy?

How can I live a fulfilling life? And so, that's the danger. The danger isn't that, you're, Answering, how can I make money? The problem is that that's not the answer to the question that you care about.

So again, once you start looking, Chris, like you see it everywhere, you're like, damn, as humans, we're constantly answering questions that are different to the ones that we've asked.

Chris: you know, Yaniv, this is also ingrained in the craft of product management. asking the right question. Of yourself and of your user and of the market is inextricably linked to building great products and keeping your eye on the north star metrics is absolutely essential for building a great product. the biggest mistake you can make in building a product is asking yourselves the wrong questions and leading off into the garden path.

And so this, kind of works at the product level, and I'm sure at the marketing and engineering and other function level, and it works at this startup level where you are asking the wrong question of yourself through a startup. And as you've already touched on, it works on the life level of like, how do I get happy?

And you substitute it for, Oh, how do I make more money?

Yaniv: So I don't want to be a pedant, but I think this is important, right? It's not about asking the wrong questions. It's about answering the wrong questions. and the reason I'm making that distinction is that the whole point of this fallacy is that in your brain, it's quite often that substitution happens invisibly.

You say, how am I going to be happy? And you don't say, oh, in order to be happy, I need to make lots of money. that substitution happens invisibly. What happens is you say, how can I be happy? Then you spend the next 40 years of your life trying to make a bunch of money. So you're answering the wrong question.

Even while you think you are answering the right question.

Chris: Right. And, we want to, very quickly start talking about some concrete examples here of the kind of questions that are being substituted implicitly by founders. and then we can perhaps talk about mitigation strategies. For how you can minimize this, answer substitution that's happening implicitly and invisibly, I think the answer lies in that implicit and invisible part, the automatic part and making the automatic manual and explicit.

So let's get to that soon.

Yaniv: Yeah. So I think in the context of startup, Chris, we've got a list of some questions that are commonly answered instead of the three questions that matter. And again, sometimes they're asked explicitly, sometimes it's sort of implicit. and let's talk about these and why it's harmful to be answering these questions instead of the core ones.

So the first one, I think that's, very common and, it's discussed quite a lot is. They answer the question, Can we raise a lot of venture capital? So instead of answering the question, can we create something valuable at massive scale in a highly profitable way? They're like, can we raise a bunch of money from VCs?

Chris: I see this a lot. From first time founders who have actually invested quite a lot of money in building a very viable MVP and they're just sitting there waiting like, okay, Chris, we need your help to raise money. And I'm like, why? And they're like, before we launch, we need to raise money.

I'm like, why? built the MVP. You have actually people, operational people on staff. You're paying their salary right now. Why have you not launched the thing? We need to raise capital. We're waiting to raise capital. Then we can launch. I'm like, no, you launch and then you raise capital off the back of that momentum.

they've somehow added, they're implicitly answering a question that is the wrong question. as you said, how do you build something valuable and how do you put it in front of people?

Yaniv: they're implicitly answering the wrong question, but again, it's partly because answering the real question is hard and answering This question is somewhat easier, obviously it depends. We've talked, over the past two years we've been doing this podcast, the fundraising environment has changed quite a lot.

Sometimes it's easier, sometimes it's harder, but what remained true, even in the darkest days of 2023 is that it is easier to raise money than it is to create a truly valuable business at scale. plus it's glamorized, Raising money feels like this amazing milestone.

It feels like an achievement. And of course it is, but it's an achievement only to the extent that it is in service to longer term goal. And I think whenever I talk to founders who've raised multiple times, they're like, every time I do it, it gets less exciting because the glamour of it wears off.

Like it is, it's a thrill. The first time you're like, I can't believe I got strangers to give me 10 million. That's insane. Right. but every time you're like, oh, okay, this is a grind. This is a drag and it doesn't prove anything. Meaningful. It does not answer the questions that we were asking.

It might help us, but only if we keep those questions in mind. And so it's so tempting to just chase the money, chase the dopamine hit. it feels like selling and selling can be really addictive, right? But you're not even selling to your customers. You're just selling the potential to venture capitalists.

And so it's at one degree of remove. it's a really dangerous game to get into that cycle of raising without understanding what you were raising for.

Chris: Yeah, I mentioned it's glamorized. I mean, it's also just discussed and documented to death, right? There is a relatively well worn process that you go through that feels very familiar. As you said, it feels like sales. There's a lot of panels and books and, movies about the Eureka moment of getting that, fundraising.

it feels like, yeah, there's a clear deliverable. It's a pitch deck and there's a clear process. I pitch and there's a clear outcome. I raise the capital. And so you're right. It feels easier. It feels fancier. It feels like the sexy right thing to do. And, it is actually easier. than building something that solves a real problem at scale.

It's, actually way easier. and part of the reason why fundraising is hard is because it is often dependent on have you built something useful that can scale?

Yaniv: you've actually reminded me in saying that of another cognitive bias. As you can probably tell, I'm a bit of a student of these things. I find them fascinating. And this one's called the availability heuristic. and that I've just quickly Googled It describes our tendency to use information that comes to mind quickly and easily when making decisions about the future.

This closely related to what's called, the, street lamp, fallacy, where it's like you look for information where it's easy to find. And so what happens with the availability heuristic is that vivid information. comes to mind more easily. It's a reason why we're more scared about being eaten by a shark than being killed by a horse, despite every statistic showing that far more people are killed by horses than by sharks, right?

The availability heuristic. so I think, yes, because venture capital is discussed a lot, because it is in the news a lot, when you think about, oh, what should we care about? You're like, Raising capital, right? The availability It means you don't have to think more deeply, you just do the first thing that comes to mind, and the first thing that comes to mind is often raising money.

Chris: Yeah. I want to, on a related thing here, which is confirmation bias that leads you to the easier thing. So I was once working with a founder where they were embarrassed about part of their product. They really felt like the product was missing this whole thing that they really, they knew they wanted to go do.

And everybody was saying, you need to go do that eventually. And I was advising, yes, eventually you need to go do that. it's a marketplace. You need to go build the other side of the marketplace drive distribution for this thing. But for now we're building the single player utility.

the theory of come for the tool, stay for the network. And the first thing we're doing is we're building the tool. The tool should work absent the network. Because it's a standalone useful tool, it has utility. But this founder was very uncomfortable about this, right? They knew that the network is what's going to supercharge the tool.

And so every bit of feedback they heard was somebody saying, network, we need the network, we need the network. And so once again, they brought up, hey, we did some user testing and this user said, geez, it'd be really great if you had a network. And see Chris, we need to go build the network. And I'm like, Did they say this tool is useless unless the network exists?

Or did they say, geez, it would be nice if there was a network, but the tool is great. Oh, actually it was kind of more the second one. And it's like, the reason I bring this up is because it's easier to chase your dream of building the network. That's fun. It's sexy. It's easy. It's, glamorous.

It's hard to do the slow grindy work of eating your vegetables and making the single player utility. Useful in and of itself. and so always wanted to substitute the problem, substitute the problem, substitute, we don't need to finish all of that utility stuff. Let's just get to the network. And it's like, no, actually you do.

you're trying to substitute, substitute for something easier, more glamorous, more exciting, the next fun challenge.

Yaniv: So the next question and we've discussed this one before, Chris, that startups try to answer instead of the real questions is, can we find partners? And this one actually, has more in common with, can we raise a lot of venture capital than it seems?

Because again, what it is about is it's about selling And closing deals with entities who are not your end customers, right? So you're distracting yourself. with venture capital, you're saying, can I raise money from strangers? With partnerships? You're like, can I find other companies and convince them that what we're doing is valuable and that there's a synergy here, right?

What you're doing again is avoiding, you're procrastinating from the real question, which is, can we actually deliver value? to the target of our product, it's so tempting to be like, oh, let's focus on distribution or on this sort of partnership or that sort of partnership. Let's focus on raising money, doing all the things that feel like progress other than the actual core thing of creating a product that people love and that people get value from.

Chris: it's so true. there's a lot of movies made on, sales. Right. And, many of us are involved in sales or have been made contact with sales or been on the receiving end of sales. and so sales feels like work. that's the work. That's the job, right? I think there's so little movies.

there's no Alec Baldwin scene in the boiler room talking about, we need to build great products. need to solve hard problems for customers. There's no inspirational, product management speech in a movie anywhere. it's hard to do because it's hard to do, but it's hard to do because it's hard to imagine doing.

don't know what it looks like. and there's no clear, contract signing part where it's like we win.

Yaniv: probably another example of the availability heuristic, right? Selling is much easier to recall and define than building a great product. So let's do that instead, right? So the next one that people end up answering instead of the real questions, and I think this is one that's close to your heart, Chris, so I'll let you run with it, is what does engineering think is possible?

Chris: Yeah. it's just, it comes up all the time, Especially. With even sophisticated product managers and product designers. I'm just constantly, constantly reminding them, that they're asking the wrong question. they're like, well, we need to check with engineering if we can add that button.

We need to check with engineering, if they can come up with that number or that insight. you long time listeners of the show have heard me say this a million times, but if Elon Musk can launch a rocket into space and have it flip over and land on a little patch in the middle of the ocean, we can add that button to this silly little SaaS product.

That's possible. The question is, first, what. Creates enormous value for a large group of people. And how do we put it in front of those people at scale? Let's figure out what that is first, before asking engineering's permission, before asking science's permission, if you're in a medical company, or it's before asking the ops team's permission, let's ask the harder question before asking other people's permission, whether, or we're allowed to do something.

Yaniv: the next, few things are really around making money. And. Chris, we, talk about this a lot, but I think what's great about this episode is it gives us a lens that sort of shows a lot of our bugbears, why are they problematic, And it's because they are answers to the questions that are different from the questions that we should be answering.

and again, we've got questions like, what's our revenue model? How do we make money? again, this is not a question of, that is unimportant. Of course it's important. Ultimately, like I said, the three questions every startup must answer. Can we create something valuable enough that people will make it part of their lives?

Can we deliver that value at massive scale? And can we do that in a highly profitable way? That third question requires a revenue model, But, I also listed those three questions in that order deliberately, because although there is a temporal overlap, you sort of have to answer questions roughly in that order, There's no point having a monetizable, scalable product that nobody wants to use. The value trickles down from the first question to the third question. And so the question isn't, whether it's important to answer what's our revenue model. The question now is, is now the right time to answer that question?

similarly, you know, another one that especially popular right now in early 2024, how quickly can we hit cashflow break even, And again, when we challenge this one, it's like, well, but the whole point of a business is to make money. Right. Yes, eventually, and Jeff Bezos in his shareholders letters is great, very consistent.

He says that, what he is optimizing is the discounted net present value of future free cashflow, right? Which is a mouthful, but what it's saying is that we will trade off making money now for making a lot of money in the future. And the whole point of software, we just had an episode on leverage and so on, is that you can make that trade off long into the future because you've got such massive scalability.

Do you need to be thinking about money? Yes. But you are not running on a quarterly P& L if you're doing the Silicon Valley style venture backed thing. And I think that misunderstanding means that you end up answering that question at the wrong time, nearly always way too early, when you should be answering other questions about can we create something valuable in the first place.

Chris: I'm a big believer, and I think there are people who will disagree with me, is that these questions almost answer themselves once you get the first question right.

So how do you create something massively valuable that people want to make part of their lives? Well, if you solve that, then delivering it at scale becomes much, much easier because people, pick it up, they use it, they retain, and they tell their friends. So scale becomes easier to do. And you do it profitably?

Well, if you're creating massive value at scale, people typically are willing to pay for that, or at least pay for access to those people in the case of an advertising based business model. And so the answers become easier. Answering them in order makes the next question easier and more obvious. Answering them the opposite way makes the answers almost impossible, right?

Like, how do we hit break even? How is that even possible without a product or a service that people pick up, use, retain, make it part of their lives? It's not, the answer is it's not possible unless you're scamming them.

Yaniv: Actually, think a penny just dropped for me. So forgive this aside, but I think this is really interesting. the question of business plans, right? I think we've talked before about the sort of grownup syndrome, right? Where there's this temptation at early stage startups, whatever, from operators, from investors or whatever, to want to see a detailed business plan with a spreadsheet and projections and forecasts and so on.

we've always railed against that. And I think your explanation just then is the reason why a business plan is basically trying to answer the third question before the second question and the second question before the first question, whereas what you really need to do the other way around.

When we talk about focusing on the user and focusing on delivering value, this isn't some sort of kumbaya thing. This is not about, Statements like, oh, we want to make the world a better place or whatnot. Like, I mean, yes we do, but this is actually a hard nosed business view on what it takes to generate a valuable venture scale company, right?

The thing you need to focus on is solving a problem for people. Then you can figure out how to scale it. Then you can figure out how to make money about it. And like I said, it doesn't have to be a non overlapping, it doesn't have to be purely sequential, but the first thing needs to happen before the second, and the second before the third.

Doesn't mean you can't have some ideas about how you might monetize it. doesn't mean that you have to be making no money until the end, but that's the order it needs to happen in. And if you put a business case in, you are privileging that kind of economic view over that. Other view. And in a model, when I talk about a model, like a, you know, an Excel spreadsheet with all your sensitivity analysis and so on, it's very easy to obscure the fact that you still don't have anything that people want.

It's like, Oh, we can grow at this rate. And you know, this gross margin and you know, these operating expenses and blah, blah, blah. And it's like, yeah, but nobody wants it.

I think that's really dangerous because again, it's actually a version of the substitution heuristic. Heuristic you're answering.

the wrong question. in this case, this is more about the order, right? So we need to be answering question one, can we create something valuable? And we're answering question three, which is let's assume we've created something valuable and figured out how to scale it. Can we make lots of profit?

And like, to your point, it's begging the question, of course you can, who cares? You don't need a model, but the hard stuff is obscured out of the model. And so you've learned precisely nothing.

Chris: we've talked about how answering those three questions, create something valuable if you want to make part of their lives, deliver it at massive scale, and then do it profitably. We've talked about how if you answer them in order, each of them make the next question easier or almost automatic to answer.

the answers almost take care of themselves. I would also say that if you answer them in the wrong Not only are they more difficult to answer, that it's actually a corrupting force. So if you decide, Hey, we want to build a subscription model. that's how we're going to be profitable is by making a subscription model.

You've now limited the ways that you're going to scale and you've limited the ways you're going to build the product and where you're going to put the paywalls and the, the feature sets. And so you're pre prescribing how you're going to build the thing, which may get in the way of creating the value in the first place. the whole thing becomes overwrought and confusing. you're just answering the wrong question at the wrong time in the wrong order.

Yaniv: Okay. So the next question is, one that we see answer doesn't usually derail companies, but it does sometimes. So we'll talk about this briefly before rounding the bend to one of the biggest wrong questions in my view, or one of most dangerous ones. So can we get our faces in the newspaper and, Chris, you know, you've, talked a lot about this in the past, which is seeking this external validation from all sorts of parties Who are not the people who are deriving value.

You end up in the newspaper, you get an award, you get a government grant, that's great, but all that means is you convince people who are not your customers, and not your future customers, that you're great. And that doesn't mean much of anything. while it can be part of a useful marketing strategy to get your face in the newspaper, if it becomes a goal in itself, if it becomes validation in itself that doing something worthwhile, then you are on the wrong track.

Chris: I've mentioned on the show before that I've been very guilty of this. When I first started paying attention to Silicon Valley, and then when I first went out to Silicon Valley, TechCrunch was the king maker. So if you were in TechCrunch and you got an article in TechCrunch, all the VCs would reach out to you.

They would start throwing money at you. It was like the way to get your company funded was the only outlet, there wasn't much else going on and it was very exciting. that got ingrained in me. I got obsessed with, we need to do a launch on TechCrunch. We need to launch this feature on TechCrunch.

We need to get in TechCrunch. And it's like, What I came to learn was that became less and less effective as TechCrunch became less and less of a kingmaker, and most of that energy and excitement was just empty calories. You had a massive rush of people come to your front door and then bounce and go away.

and a lot of that VC inquiry was just nonsense. And so, it just absorbs all your time. And you're asking, the wrong question, to keep coming back to the theme of the show.

Yaniv: Okay, now the final, and I guess the most controversial one of these wrong questions to answer, I want to go into this one a bit more in depth, Chris, is Can we hit a set of KPIs that we've agreed to? now here's the interesting thing, KPIs are critical on metrics.

prefer the term metrics, right? Having a good set of metrics is super critical. It is the instrumentation that allows you to know what is happening in your business. So when I say that you need to be careful about KPIs, I'm not saying you shouldn't measure stuff. Of course you should measure stuff. You should say, these are the numbers that matter to us. And actually, that's what KPIs are. If you think about it, KPI is a Key Performance Indicator. It indicates how you're performing. It is not a KPT. It is not a Key Performance Target. this brings me to my favorite law, which is called Goodhart's Law.

And that states, when a measure becomes a target, it ceases to be a good measure. And That is why so passionate about this, right, know, if you are trying to deliver value to your customers and you say, Oh, okay, we will track the daily active users to give us a sense of whether we are delivering value to the user, we are focusing on delivering value to the user, that number goes up, it's a good sign, that is using that metric as a KPI.

If you instead say our target, you is to maximize the number of daily active users, then you might find quickest way to make that number go up is not actually to provide more value. It might be to spam your users with annoying emails or some other sort of engagement bait that is not actually delivering more value.

It is simply causing increased usage. And then you even find, especially as a company gets bigger, this happened at Google, by the way, back in the day. So this is not a hypothetical story, right? You start playing games with how you actually measure daily active users.

You're like, oh, maybe if they click on a notification icon, that counts as active usage and so on. And you end up down the spiral where you're so focused on making the number move, you forget about what the number is supposed to be measuring. And that's what Goodhart's Law means when it says when the measure becomes a target, it ceases to become a good measure.

Why do we care about daily active users? Because it correlates well with the value we're delivering. But if we focus on making that number go up, the correlation weakens or goes away and it no longer correlates and instead we're answering the wrong question. We're answering the question, how can we make this number go up, not how can we deliver value to our users to such a great extent that more and more of them use it every day.

Chris: All right, Yaniv. So I think we've gone through a fun list of these substitute answers, right? These substitute, questions that founders are actually answering instead of the questions they really should be answering.

so the question then becomes, Yaniv, we as founders stop this from happening? of course, answer number one is have good advisors around to catch you making these mistakes.

that's answer number one. But answer number two is, I think, making sure that your chain of logic is explicitly, Written down and rationalized. And what I mean by that is often we're answering the wrong question implicitly and automatically and invisibly because we think that like, oh, I wanna be more happy, money equals happiness.

How do I make more money? And there is this implicit and invisible chain of logic playing out in your head and you're not aware of it. And so part of your strategic thinking, part of your planning, Part of your tactics is to write down that chain of thinking and saying, actually to build something very valuable, we first need to understand the problem.

In order to understand the problem, we need to go ask these questions. In order to ask these questions, we need to create these surveys. In order to go to the surveys, we need to go use Google Forms, and make sure that. That chain of thinking is explicitly written down and doesn't go haywire somewhere along the way and is constantly re examined for false assumptions and bad rationalizations.

And that's the first thing that comes to mind when I think about this. in this vein, I want to put a, plug in for my friend, Daniel Schmidt and his startup DoubleLoop. he's been a product manager at CNET and other companies, and he got very frustrated by, I think, exactly this problem. and he's created a tool and he's been grinding and grinding and grinding on this tool for years, which allows you to describe your strategy as a series of outcomes.

And then. Work backwards into a series of inputs and metrics and, map the whole thing back. And he's trying to create an interactive collaborative tool, forces you to think about that chain and encourages you to share and collaborate around that chain. I gave him just a little bit of advice in the very, very early days, but haven't touched it since.

And I just see him day in, day out, sharing on LinkedIn and grinding on this problem. And I think DoubleLoop has become a really mature and exciting product for this problem set.

Yaniv: Hey man, do you want to see if we can get him to, um, give our listeners a discount code?

Chris: So just quickly, we're cutting in, after the edit because I actually reached out to Daniel and asked him if he can give our listeners a discount.

And he said, absolutely. So if you sign up for a demo with DoubleLoop at DoubleLoop. app, and mention that you heard about the app from the show, he will give you a 20 percent discount. So DoubleLoop. app, sign up for a demo and mention the show and you'll get a 20 percent discount.

so there you go.

Yaniv: I agree with what you say, Chris. ask these questions, get that causal link really clear.

I think that is valuable. and I think DoubleLoop, I'm not highly aware of it, but I think the idea of, Making your strategy explicit. We haven't used the word strategy in here, but actually, underlying it, there's a substrate of this is about strategy, right? Because we're saying, okay, everyone has to answer these same three questions.

Can we create something valuable that people make a part of their lives? Can we deliver that value at massive scale? Can we do that in a highly profitable way? The strategy is the how. How can we do that, And strategy is something that is living and evolving. And so having a good strategy Is really around answering that how question and about making sure that you've validated your assumptions in the how.

the other thing I would add, Chris, is, maybe this seems a bit trite, but I think it's important, is that awareness probably the biggest part of the problem here. The substitution heuristic is so sneaky. Because people don't realize they're doing it, it ultimately comes down to culture, and it ultimately comes down to the founders holding themselves accountable to this, to make sure that you are constantly going back to those questions and constantly being explicit about the questions that you're answering.

So, we talked about KPIs. In the past, we've talked about OKRs, which is Objectives and Key Results. And one of my views about OKRs is that the objective is far more important than the KRs. So the KRs are the measures, the key results. The objective is effectively what you're trying to achieve. Or another way of thinking of it is, this is the question you're trying to answer and the key results are the way you're going to measure it.

But it doesn't matter how good you are at measuring if you don't know what question you're trying to answer. And so Being explicit. at my last startup at Circular, I experimented with just having O's, right? So all we did was we didn't worry about the key results because that became too heavyweight for us already.

But just being explicit about our objectives. What are we trying to achieve? What questions are we answering is so valuable and it is incredible how easy it is to grind day after day, work really hard without stopping and reflecting to think, what is this in service of? What is our objective here explicitly?

And then yes, having tools that hold you accountable, that allow you to be, more explicit in your assumptions. I think that's valuable. But the first thing is simply to build that habit. What are we trying to achieve? What is our objective? What questions are we answering and why are we answering those questions?

Chris: Yeah. And you know, Yaniv, we never want the podcast to be like too self promoting and, and too,

Yaniv: No, fuck, fuck yeah. No, we're awesome. You should buy our stuff.

Chris: but like just genuinely, a lot of what I talk with founders about is. I'll have the first meeting, second meeting with founders where we're trying to understand what, we do and whether I can be helpful.

And I will brain dump everything I can possibly think of to help that founder. I'll give them the entire playbook so that if we never speak again, I will try to leave them with the whole strategy for how I think they can succeed. But inevitably, if, and when we engage, they will have forgotten everything I said, and need to walk them through that again, but here's the thing.

By the next meeting. Even though we may have written it down, formalized it, planned it, they will have forgotten again. And they will revert back to their muscle memory again. And then the next week, they will have reverted again. And again. And again, so the value of having an advisor is certainly to help you figure out your strategy, but it is also to be that person who is tactically and emotionally disconnected from the day to day to come in once or twice a week and go, what the hell are you doing?

You've, reverted back to answering the wrong question. You've reverted back to your muscle memory. You've forgotten the strategy. You're lost in the weeds. Let's go back. Let's go back to the first principles. Let's go back to the questions that matter. I want to say 50 percent of what I do for a startup is not being smarter, not being more experienced, not being more intuitive or tasteful.

It's just being emotionally and tactically disconnected from the problem so that I can remind them of their drift every week. Whether it's me, another founder, a really competent best friend, somebody who can come in on a weekly basis and help you avoid that reversion to the mean, that muscle memory, that, drift, that implicit and invisible substitution of questions, is priceless.

I would say without exaggeration, priceless.

Yaniv: Priceless. And yet, Chris, if people want to work with you, they can get it for a price, which is so much less than the pricelessness of the value that you offer. I joke, but I, completely agree with you, of course. Like so much of this is a mind game. It's, sort of like when you start reading biographies of great sports people or whatever, and you're like, Damn, skill's important and luck's important and all that, but so much of this is psychology.

It's a mind game. It's about having the right habits. It's about, dealing with pressure correctly and so on. And that's where having, an accountability partner who really understands what you're talking about, right? is so, so important. and like you say, Chris, you have that one step of remove, but more to the point, you are simply there.

As a super knowledgeable accountability partner who asks the right questions, great, that's important, holds clients accountable to actually staying the course and building the right habits. And that is 100 percent important. if you are not answering the right questions, you can grind for years and years and it is waste of your time and money.

It is a waste of your life force. So don't let this happen to you folks.

Chris: All right. So I guess Yaniv, we should put a button on that. If you want to learn more about my work in this area, feel free to visit chrissaad. com slash advisory or subscribe to my newsletter at chrissaad. com slash newsletter.

Yaniv: and if you want to keep learning from both of us by listening to this podcast, remember . You have implicitly signed up to the Startup Podcast Pact, which means giving us a rating and review in your listening app, following us on YouTube and giving us a public shout out wherever it is that you have your audience. It helps us grow and it allows us to keep producing this content that helps as many founders as we can reach.

Chris: All right, Yaniv. Awesome. It was fun as always.

Yaniv: It was fun. All right. Have a good week, mate. I

Chris: Catch you later. Bye bye.