Life

Jeff Bezos on Regret Minimization.

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If you can project yourself out to age 80 and sort of think, “What will I think at that time?

We all struggle with making tough and somewhat difficult decisions that can be life changing or altering. Decisions such as leaving a high paying job to start a business, leaving a toxic and abusive marriage for the unknown, setting boundaries with our parents, relocating to a foreign land, reducing time spent with draining and fair weather friends. All of these decisions are tough and that is why most of us never make them, hence we stay stuck in abusive relationships, toxic work environments, get enmeshed in our dysfunctional family units, get entangled with friends that are not adding value to us anymore. As American novelist and playwright James Baldwin once said “Not everything that is faced can be changed, but nothing can be changed until it is faced.”

“Not everything that is faced can be changed, but nothing can be changed until it is faced.” – James Baldwin

At age 30, Jeff Bezos Amazon.com founder was faced with such a tough decision while working at hedge fund firm David E. Shaw & Co. in 1994. He had had an epiphany about the internet revolution and he was stuck between staying in his high paying wall street job or leaving to start Amazon.com. In the process of trying to make this life changing decision, he came up with the “Regret Minimization Framework” as a mental model to help him make the tough decision.

The Regret Minimization Framework is a tool used for reducing the number of regrets in our lives. When faced with a difficult or tough decision:

  • Project yourself forward to the age of 80.
  • Look back on your life
  • Ask yourself “Will I regret not doing this”.
  • Act accordingly because you want to minimize the number of number of regrets.

A man is not old until regrets take the place of dreams.-John Barrymore

Jeff Bezos summarizes the regret minimization framework in this video interview;

The framework I found, which made the decision incredibly easy, was what I called—which only a nerd would call—a “regret minimization framework.” So I wanted to project myself forward to age 80 and say, “Okay, now I’m looking back on my life. I want to have minimized the number of regrets I have.” I knew that when I was 80 I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day, and so, when I thought about it that way it was an incredibly easy decision.

And, I think that’s very good. If you can project yourself out to age 80 and sort of think, “What will I think at that time?” it gets you away from some of the daily pieces of confusion. You know, I left this Wall Street firm in the middle of the year. When you do that, you walk away from your annual bonus. That’s the kind of thing that in the short-term can confuse you, but if you think about the long-term then you can really make good life decisions that you won’t regret later.

If you can project yourself out to age 80 and sort of think, “What will I think at that time?”

In his book, Invent and Wander: The Collected Writings of Jeff Bezos, Jeff writes about how he used regret minimization as a mental model for deciding to quit his job and start Amazon. He writes:

After graduation, Bezos went to New York to apply his computer skills to the financial industry. He ended up at a hedge fund run by David E. Shaw, which used computer algorithms to discover pricing disparities in the financial markets. Bezos took to the work with a disciplined zeal. Foreshadowing the workplace fanaticism he would later try to instill at Amazon, he kept a sleeping bag in his office in case he wanted to sleep there after a late night of work.

While working at the hedge fund in 1994,

Bezos came across the statistic that the web had been growing by more than 2,300 percent each year. He decided that he wanted to get aboard that rocket, and he came up with the idea of opening a retail store online, sort of a Sears catalogue for the digital age.

Realizing that it was prudent to start with one product, he chose books—partly because he liked them and also because they were not perishable, were a commodity, and could be bought from two big wholesale distributors. And there were more than three million titles in print—far more than a bricks-and-mortar store could possibly keep on display.

When he told David Shaw that he wanted to leave the hedge fund to pursue this idea, Shaw took him on a two-hour walk through Central Park. “You know what, Jeff, this is a really good idea. I think you’re onto a good idea here but this would be a better idea for somebody who didn’t already have a good job.” He convinced Bezos to think about it for a couple of days before making a decision. Bezos then consulted his wife, MacKenzie, whom he had met at the hedge fund and married the year before. “You know you can count me in 100 percent, whatever you want to do,” she said.”

You know what, Jeff, this is a really good idea. I think you’re onto a good idea here but this would be a better idea for somebody who didn’t already have a good job.”

To make the decision, Bezos used a mental exercise that would become a famous part of his risk-calculation process. He called it a “regret minimization framework.” He would imagine what he would feel when he turned eighty and thought back to the decision. “I want to have minimized the number of regrets I have,” he explains. “I knew that when I was eighty, I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the internet that I thought was going to be a  really big deal. I knew that if I failed, I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day.

I knew that if I failed, I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day.

Amazon Founder Jeff Bezos delivered the 2010 baccalaureate commencement “We are what we choose” speech at his alma mater to the graduating students at Princeton University. He implored the students to ask 12 questions while making life choices and decisions.

I got the idea to start Amazon 16 years ago. I came across the fact that Web usage was growing at 2,300 percent per year. I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles — something that simply couldn’t exist in the physical world — was very exciting to me. I had just turned 30 years old, and I’d been married for a year. I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn’t work since most startups don’t, and I wasn’t sure what would happen after that. MacKenzie (also a Princeton grad and sitting here in the second row) told me I should go for it. As a young boy, I’d been a garage inventor. I’d invented an automatic gate closer out of cement-filled tires, a solar cooker that didn’t work very well out of an umbrella and tinfoil, baking-pan alarms to entrap my siblings. I’d always wanted to be an inventor, and she wanted me to follow my passion

I was working at a financial firm in New York City with a bunch of very smart people, and I had a brilliant boss that I much admired. I went to my boss and told him I wanted to start a company selling books on the Internet. He took me on a long walk in Central Park, listened carefully to me, and finally said, “That sounds like a really good idea, but it would be an even better idea for someone who didn’t already have a good job.” That logic made some sense to me, and he convinced me to think about it for 48 hours before making a final decision. Seen in that light, it really was a difficult choice, but ultimately, I decided I had to give it a shot. I didn’t think I’d regret trying and failing. And I suspected I would always be haunted by a decision to not try at all. After much consideration, I took the less safe path to follow my passion, and I’m proud of that choice.

At the end of his speech, Bezos implored us all to think deeply about 12 questions while making choices and decisions in our lives:

Tomorrow, in a very real sense, your life — the life you author from scratch on your own — begins.

  1. How will you use your gifts?
  2. What choices will you make?
  3. Will inertia be your guide, or will you follow your passions?
  4. Will you follow dogma, or will you be original?
  5. Will you choose a life of ease, or a life of service and adventure?
  6. Will you wilt under criticism, or will you follow your convictions?
  7. Will you bluff it out when you’re wrong, or will you apologize?
  8. Will you guard your heart against rejection, or will you act when you fall in love?
  9. Will you play it safe, or will you be a little bit swashbuckling?
  10. When it’s tough, will you give up, or will you be relentless?
  11. Will you be a cynic, or will you be a builder?
  12. Will you be clever at the expense of others, or will you be kind?

He ended the speech by making a prediction, he said:

I will hazard a prediction. When you are 80 years old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made. In the end, we are our choices. Build yourself a great story. 

Jeff Bezos also noted that our biggest regrets would be acts of omission and not commission. We would regret the things we did not do than the things we did. He said:

I went to my boss at the time and I really liked my job, and I told my boss I was going to start doing this thing, do an internet bookstore and I had already told my wife and she’s like, “Great, let’s go,” and I said to my boss and he’s like, ‘”I think this is a good idea, but I think this would be an even better idea for somebody that didn’t already have a good job.” 

For me, the right way to make that kind of very personal decision, because those decisions are personal, they’re not like data-driven business decisions. They are, “What does your heart say?”

And for me, the best way to think about it was to project myself forward to age 80 and say, “Look, when I’m 80 years old, I want to have minimized the number of regrets that I have.” I don’t want to be 80 years old and in a quiet moment of reflection, thinking back over my life, and cataloguing a bunch of major regrets.

In most cases, our biggest regrets turn out to be acts of omission. Its paths not taken and they haunt us. We wonder what would have happened. I knew that when I’m 80, I would never regret trying this thing (quitting a good job to start Amazon) that I was super excited about and it failing.

If it failed, fine. I would be very proud of the fact when I’m 80 that I tried. And I also knew that it would always haunt me if I didn’t try. And so that would be a regret, it would be 100 percent chance of regret if I didn’t try and basically a 0 percent chance of regret if I tried and failed. That’s a useful metric for any important life decision.

“Look, when I’m 80 years old, I want to have minimized the number of regrets that I have.” 

Our decisions make or break us, good decisions lead to better results and fewer regrets. As the motivational speaker and author Jim Rohn noted “Success is nothing more than a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day.”

“Success is nothing more than a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day.”

Ask yourself: “What is the worst that can happen?”, “Would I regret or do I want to regret this decision on my dying bed?, Would what am about doing really matter in the grand scheme of things? We hardly ask ourselves such questions because we overestimate what we can achieve in 10 years and underestimate what we can achieve in a year. Instead of living in the future, take life one day at a time. Live in the now, have the courage of your conviction, live life on your terms and be remarkable.

All the Best in your quest to get Better. Don’t Settle: Live with Passion.

Lifelong Learner | Entrepreneur | Digital Strategist | Marathoner | Bibliophile -info@lanredahunsi.com

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