Advertise on the Tentacle


| Guest Columnist | Harry M. Covert | Hayden Duke | Jason Miller | Ken Kellar | Patricia A. Kelly | Edward Lulie III | Cindy A. Rose | Richard B. Weldon Jr. | Brooke Winn |


Advertise on the Tentacle

November 12, 2004

Beware of Instincts

Chris Charuhas

Should a leader trust his gut? It's an important question now. When the United States invaded Iraq, Sen. Joe Biden, of Delaware, told the president he was concerned about winning the peace. The president assured him all was well.

Senator Biden then asked him, "How can you be so sure when you know you don't know the facts?"

"My instincts," the president replied. "My instincts!"

Now we're undertaking a major assault on Fallujah. Will the instincts of our commander-in-chief lead him to make good military decisions?

No! Instincts only work well when making decisions that involve a few people or factors. In situations where many factors interact, relying on instinct leads to failure.

If the President is dealing one-on-one with another leader, he should probably trust his gut. Because humans are social creatures, we've developed a remarkable ability to "read" others and figure out what their intentions are. If he were leading a 40-man platoon in combat, guts would get him by.

On that level, it's often better to pursue a bad decision aggressively than to wait to make a good one.

Commanding successful armies takes more than instincts. It takes a systematic approach to decision-making - and past experience with putting one's own butt on the line.

Since the President has an MBA, let's look at the world of venture capital to see how it's done. Investing in startup companies is nearly as complex and uncertain as waging war. The contrasting records of "instinctual" investor Tim Draper and "battle-tested" investor Jeff Osborn show which approach works better.

A third-generation investment banker, Tim Draper runs Draper Fisher Jurvetson, one of the biggest venture capital firms in the world. He has a blue-chip educational pedigree: Andover, Stanford, and Harvard Business School. He makes quick decisions, and says inspiring things like, "What we look for are heroes...people who are going to change the world."

Jeff Osborn has only a B.A. from Trinity College. In 1991 he started a company called Wilder Systems, maxed out all his credit cards to fund it, then went personally bankrupt when it tanked. He has an exhaustive checklist he uses to evaluate companies, and says dispiriting things like, "If you are doing it right, starting a company is a really grinding proposition."

Who's better at investing?

Not Tim Draper. He lost more than $200 million betting on now-defunct dot-coms, such as Product Pop and If you invested a dollar with him in 1998, you'd have a quarter now.

It's Jeff Osborn. After his first startup went belly-up, Mr. Osborn made $10 million as one of the principals at UUNet. His venture firm, Osborn Capital, turned $3 million into $100 million. If you invested a buck with him in 1998, you'd have $35 now.

The president is more like Tim Draper than Jeff Osborn. He makes decisions based on instinct, not systematically, and has no personal experience of failure. Family support and connections have allowed him to "fail upward" throughout his life.

If he leaves the battle for Fallujah to his battle-tested generals, we'll probably win it. If he takes an active command role, like Lyndon B. Johnson did in Vietnam, our troops are in big trouble.

Yellow Cab
The Morning News Express with Bob Miller
The Covert Letter

Advertisers here do not necessarily agree or disagree with the opinions expressed by the individual columnist appearing on The Tentacle.

Each Article contained on this website is COPYRIGHTED by The Octopussm LLC. All rights reserved. No Part of this website and/or its contents may be reproduced or used in any form or by any means - graphic, electronic, or mechanical, including photocopying, recording, taping, or information storage and retrieval systems, without the expressed written permission of The Tentaclesm, and the individual authors. Pages may be printed for personal use, but may not be reproduced in any publication - electronic or printed - without the express written permission of The Tentaclesm; and the individual authors.

Site Developed & Hosted by The JaBITCo Group, Inc. For questions on site navigation or links please contact Webmaster.

The JaBITCo Group, Inc. is not responsible for any written articles or letters on this site.