Evernote CEO Phil Libin has a serious addiction to kaya toast – a staple snack in Singapore. He joked that it was all he thought about while on a flight to Singapore to attend Techventure, a conference for startups and investors.
I’d guess that his desire to eat that dish is driven by two things – a love for kaya toast, and to a lesser extent, the fear of missing out. He doesn’t visit Singapore that often after all.
Fear is often a main motivator in our decision-making. It’s useful for short-term choices, such as whether to “fight or run away,” says Libin in a speech at the conference on September 25. And the part of the brain (called the lizard brain) that makes those decisions leans towards negativity and fear.
While the claim that the lizard brain serves as our fear center is shaky, researchers have figured out that humans have a negativity bias, which means we react more strongly to negative or unpleasant stimuli.
“We’re optimized to make decisions based on fear,” he says, cautioning however that it is a bad way to make long-term decisions, which include: “What product should I build? What should I name my company? What should my long-term strategy be?” We tend to decide between two options by comparing the positives and negatives of each:
We should just weigh the positives instead, he says. By doing so, we avoid letting fear overwhelm us, and this gives room for the logical thinking part of our brain to operate.
This is Libin’s strategy for overcoming negativity bias. He derived it after some soul searching on the root causes of the mistakes he and Evernote have made. Most of these errors arose out of decisions made in fear, he concluded.
In his talk, Libin lists a few types of decisions where fear could creep in and lead to bad choices.
What’s the competition doing?
“If you’re a startup and you’re thinking about your competition, you’re using your lizard brain. You’re probably making poor decisions. It’s as simple as that. Very, very difficult to make good long-term strategic decisions based on what your competition is doing,” he says. The enemy here is the “if Google can’t fix this, then I probably can’t either” mentality.
Should I go local or global?
A lot of companies outside Silicon Valley struggle with this. He says: “Why are there so many companies in Southeast Asia saying: we’re gonna be the Yelp for Southeast Asia; we’re gonna be the Facebook for China? These decisions to go local, to constrain yourself, are often fear-based.”
Should we ever remove a feature?
Startups shudder at the thought of users complaining vocally if one feature is removed. Yet bloated software often gets in the way of the company’s goals, especially if it has features used only by a small segment of customers.
Libin described one incident in his company where fear-based decision-making almost took hold. It happened seven years ago, when Evernote was deciding which logo to use. “The discussion was all negative. Whenever anyone said anything, 90 percent of the time they talked about what was wrong with the particular logo.”
The group ended up picking the least problematic but boring logo (bottom right).
Fortunately, Libin and a marketing person decided to override everyone and go with the elephant, because it had the most positives going for it.
That wasn’t the end. A board member called him the night before the logo’s launch in panic. He said that Indian people find an image of an elephant with their trucks turned down offensive.
Libin tried to confirm this. He called up his brother who was working at Google, and asked him to grab several Indian colleagues to get feedback on the logo. One of them said sarcastically: “Yeah, it’s a picture of an iconic animal with the trunk in the default position. I’m offended horribly.”
Libin claims that the logo was one of the best decisions Evernote has made. “This got us hundreds of millions of free advertising and marketing just because people liked the logo so much. Apple liked it and put it on iTunes and all over the place. Google liked it and they put it everywhere. Going with something we had the most concerns about but also the most awesome benefits paid off huge.”
On a more personal note, Libin tells Tech in Asia about a costly mistake he made: he declined an opportunity to invest in Uber at a very early stage.
“I was worried about regulation,” he says. “The way I think of it now is that when I make a decision, I’d force myself to not think about the downsides. If I was looking at Uber again, I wouldn’t say: what can go wrong? I know all the things that can go wrong. I’d say: what would it be like if it was awesome? What if it actually does well, and what if it actually reinvents the way everyone gets around?”
He continues: “You’re always overestimating the downside and underestimating the upside in the long term. If you make decisions based on the upsides, you’ll make many spectacular errors, but also many more successes.”
See more: Evernote now has more than 30 million users across Asia
This is how Evernote CEO Phil Libin makes decisions
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