Tuesday, May 15, 2012

The Bright Side of Ignorance

Paco spoke about impulse purchases and the need to think before buying something whether we will really use it and enjoy it. He had bought some magnets during one of our trips which he rarely uses. I agreed, but suggested that impulse decisions sometimes have unexpected positive consequences - so we shouldn't be too rigorous on this front. We should also consider the magnitude of the purchase: we wouldn't want to buy our next house on a whim and without knowing anything about its neighborhood, but we shouldn't spend too many hours investigating our next pair of running shoes.

Another important factor is the price of delay: if we are in a trip abroad and see a souvenir we really like in a shop in a small village, we are probably facing a once in a lifetime opportunity to buy this souvenir. Think too hard about it and you will miss the opportunity forever. But if you are considering the purchase of a video game on Amazon, you can probably take your time.

The conversation reminded me of something that happens with entrepreneurs who "don't know better": sometimes entrepreneurs start businesses because they don't know all the challenges they will face. If they did, they would go do something else. But we sometimes succeed against all odds, and sometimes ignorance is a good thing! Have you ever enjoyed a "bad movie" you wouldn't have seen if you had paid attention to its IMDB rating? I have.

It is also important to pay attention to our intuition. Our intuition helps us make decisions very quickly - and these are decisions that are often better than the ones we make after more "careful analysis".

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