Intuition and Startups

Because startup managers operate (as Eric Ries likes to say) in a zone of uncertainty, I believe that they need to make maximum possible use of a little-appreciated cognitive faculty we all have – intuition.

Now, I have to say that I strongly disagree with the definitions of intuition commonly used, particularly philosophical definitions (and especially Immanuel Kant’s). Wikipedia is also unhelpful, insofar as its core definition of “thoughts and preferences that come to mind quickly and without much reflection” is far closer to ‘instinct’ and/or ‘unconscious reasoning’ – and I think that intuitions need have nothing to do with speed, and can also involve a lot of deep reflection. Really, to me the essence of intuition is captured only very imperfectly in all of these descriptions.

Rather, having thought about intuition for the last 25 years, I think a more useful definition of it goes like this:

Whereas logic is the means by which we combine certainties together, intuition is the means by which we combine uncertainties together.

But this is not to say that I think startup managers should rely purely on intuition: no, I think they need a rounded combination of MBA-style thinking (based on financial and situational logic) and intuition (based on fathoming how all the incomplete / unreliable / agenda-coloured pieces of knowledge fit together), and the good judgement to know when the two are applicable. Basically, you need to be good in certain and uncertain domains: logic and intuition are not either-or choices, you need both.

All the same, show me an individual piece of knowledge that is absolutely certain and I’ll show you a tautology (real-world world data always have epistemologically fuzzy ‘haloes’ around them), so to a very large degree you need logic and intuition to make sense of anything. Hence, if you put on your best Harvard Business School Professor hat and try to reduce everything to flat scientific facts ready to be logically combined, you’ll end up painting a very unrepresentative picture – yet this is the conceptual bedrock on which the whole MBA ‘case study’ approach is built (and so is the reason why ‘pure’ MBAs are unsuited to running startups). Similarly, the whole ‘business plan’ culture is based on the same presumptions of contextual, operational and financial certainty, which is probably why they are proving less and less useful as time goes by.

Ultimately, logic helps you work with data that you pretend is ‘knowably certain’, and helps you answer questions: while intuition helps you work with data that you pretend is ‘knowably uncertain’, and helps you ask questions. So, intuition is what you use when you to try to give shape to uncertainties – essentially, to make them manageable – which is therefore why startup managers need it so much!

Note that there are a few people who get at least some of this right, most notably the “Recognition Primed Decision” (RPD) literature. But honestly, I’m not aware of a whole lot of useful stuff on intuition available in any form out there – do any business schools run modules on business intuition? (I would happily run one, but I’m not aware of any demand for this.)

In the end, even if you can’t define intuition or read much about it, startup managers still need to be able to use every day – which is probably why running a startup is hard!

Read Full “Intuition and Startups” Article Where It Was Originally Published Here.