Category: Decision Making

Decision Making

My Favorite Cognitive Biases #1

Gregory Pearl

Buying and Selling Companies, Investing, and even just general life involve decision-making. I’ve seen people in positions of authority really make some bad mistakes in their decisions. Decisions that were obviously bad to those around them before action was taken by the power figure. What causes this? Are they dumb? Well, in some cases yes. Just because a person has power doesn’t make them smart or wise. But sometimes otherwise smart people fool themselves. If you are really interested in this subject I would refer you to the book Thinking Fast and Slow by Daniel Kahneman. If you are really…

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Culture and Ethics, Decision Making

Balance the Positive and the Negative

Gregory Pearl

Early on in my career, I worked with an astonishingly effective salesman.  He did exactly what you’d expect such an effective sales professional to do, be enthusiastic, deal well with rejection (when it happened), craft a good succinct story, understand his customer’s needs. One thing he also did is that he looked at the negative. He analyzed the situation and his customer and put it this way “Eliminate every reason why the customer can say No and then he has no reason not to say Yes.” He looked for the obstacles and problems in the situation and determined a solution…

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Alternative Investments, Decision Making

The New(er) Strategies for Massive Startup Success

Gregory Pearl

What can we learn from the startup efforts of companies that became wildly successful? What lessons can we take from the successful companies in the innovation hubs? I am talking about the massively successful startups – the ones that become unicorns (worth $1 billion or more). I’m not talking about smaller-scale, less ambitious startups. Mostly only those with unicorn potential. Startup land is a dynamic field. What works now and has worked in the past may not be a good template in the future. A lot of what succeeds in one time and place may not work in another. That…

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Decision Making, Exit Planning

The Stock Market Goes Up, Goes Down or Stays the Same

Gregory Pearl

Here are at The Value Focus we talk about business decision making around Strategy, M&A, Exit Planning and Business Valuation. Short term trading in publically traded equity markets is not what we advise on. Still, I get asked about this topic reasonably often.  So here is some perspective. Recently, the publicly traded stock markets have become more volatile. I do not know if this will continue or not. Neither you or I know how the markets will perform in the short term.  I do know that the markets tend to increase over longer periods of time. In fact, there is…

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Decision Making

What Are the Reasons Small Businesses Need Financing?

Gregory Pearl

There are four main reasons Small Businesses need financing, and to take on debt. There are variances within these four reasons. But most of the time the reason can be put under one of these categories. The four main reasons are: 1) Starting a business.  Some types of businesses are more expensive to start than others. Service businesses that do not require specialized equipment are less capital-intensive than ones that do require such investment. 3) Expanding the business to capture new opportunities. Sometimes an opportunity will present itself and the businesses cannot take advantage of the situation without additional capital.…

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Decision Making

Do Professionals Think Like Hammers?

Gregory Pearl

How many times have you encountered a marketing professional that thinks all of business is nothing but marketing? Or the engineer that thinks that all you need to have a hit product is superior functionality or quality? Or the lawyer that considers nothing but litigation risk? Or the tax professional that recommends a company reorganizes in an operationally inefficient way because saving money on taxes is all that matters? An informal way of describing this is that when the only tool you have is a hammer,  every problem requires a nail. When perhaps a saw or wrench would be better.…

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Decision Making

Chance favors the Prepared Mind?

Gregory Pearl

“Chance favors the Prepared Mind” – Louis Pasteur We’ve all heard that saying but often do not know who originally said it. I think that saying is somewhat misleading. Taken out of context. The entire quote is actually quite different: “Where observation is concerned, chance favors the prepared mind.”  People have mostly heard only the last part of that quote. Be prepared and when luck presents an opportunity not only will you notice it, but be able to act on it. That misses the observation part. Observation is extremely important – without doing a good job of observing to recognize…

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