When I Sank
In 2014, I had a crack at creating my own product. I had six months worth of runway and I had already burned two months and had no paying customers.
Worse still, I didn’t have a robust decision making process to navigate the uncertainty of whether to pivot or persist.
Every day, I convinced myself I was one feature away from a breakthrough. And while optimism is an admirable trait, optimism in the face of the market telling me “no” is probably the kind of “grit” that could have landed me in dire financial straits.
In the end, a job offer that landed in my lap made it an easy decision to retire that project.
But that was a lucky break.
And, the thing about luck is that it’s unreliable.
These days, when I take on one of these moonshot type projects, I have a more robust decision making process at my disposal.
Here is one part of the process: the luck thought experiment.
Why We Get Trapped in Bad Decisions
It can be extraordinarily difficult to walk away from something we’ve invested in, even when it’s no longer serving us. Time, energy, emotions—they all create powerful inertia.
This is an example of the sunk cost fallacy.
Specifically, it is our tendency to continue with an endeavor we’ve invested money, effort, or time into, even when the current costs outweigh the benefits. This psychological trap causes us to stick with a plan or decision, despite it no longer being in our best interest.
With the above mentioned project, my significant time and emotional investment made it nearly impossible to see clearly. I needed a decision making process that could help me detach from past investments and gain a fresh perspective.
The Luck Thought Experiment: The Missing Part of My Decision Making Process
The Luck Thought Experiment helps me reassess my investment by asking a simple but powerful question:
“If you arrived at your current situation by some lucky break—would you still feel compelled to continue on your present trajectory?”
This mental shift decreases the mental weight of previous investments from my decision making process, allowing me to see my situation with remarkable clarity.
The Luck Experiment in Action: The Career Pivot
When considering a career break from a comfortable position at a fintech company, I applied this decision making process. I had worked hard to secure a job with reliable income. However, when I asked myself, “If I had arrived at this position by luck, would I feel compelled to continue?” the answer was no. This clarity helped me make the decision to take that break which led to me starting The Plucky Jester and writing From Dilemmas to Decisions.
How to Detach Yourself from Sunk Costs
To implement this tool into your decision making process:
- Ask yourself: “Would I feel compelled to continue if I had arrived at this point by pure luck?” If the answer is “no”, this is an indicator that it’s time to pivot rather than persist.
- Connect with your future self and consider the long-term costs and benefits of staying the course
- Consult with someone outside your situation to gain a fresh perspective free from sunk costs
Why Accountability Transforms the Decision Making Process
Since 2019, I’ve been part of structured accountability relationships that have transformed my decision making process. When going solo, it’s dangerously easy to develop tunnel vision. As a result, we often throw good time, effort, and money after decisions that no longer serve us.
Having a community of peers who can provide oversight and propose thought experiments like the Luck Thought Experiment significantly improves our decision making process. This external perspective often reveals options we can’t see ourselves.
If you’re interested in forming accountability relationships, but aren’t sure where to start, check out this community I have been building.
Break Free from Sunk Costs Today
Don’t let past investments hold your future hostage. Apply the Luck Thought Experiment to your current decisions and investments and see what clarity emerges.
If you liked this, you may also enjoy