That’s how much Reed Hastings and Marc Randolph wanted to sell Netflix to Blockbuster in the early 2000s. Unfortunately, Blockbuster didn’t see the value of direct-to-consumer, on-demand content in the midst of the dot-com era.
“The dot-com hysteria is completely overblown”, Blockbuster’s then-CEO uttered back to Hastings and the crew. This was followed by an explanation of how the business models of Netflix and other online ventures burned cash too quickly and weren’t sustainable.
Who’s model wasn’t sustainable, again?
Obviously, all business decisions are a game of risks and bets. Some fail and some return outsized gains. But the reason people make these important decisions might not be as sophisticated as they would have liked to imagine.
In his latest book, Think Again, Wharton professor and organizational psychologist, Adam Grant, introduces three personas most people embrace when challenged to make a decision. They either turn into a preacher, a prosecutor, or a politician.
People assume the preacher’s identity when their beliefs are challenged. They will tell captivating stories with vibrant illustrations and heart-wrenching crescendos to advocate for or promote their ideals.
The prosecutor’s identity is assumed when one person recognizes flaws in another’s thinking. The prosecutor gathers evidence as to why they’re right, why the other person is wrong, and then unleashes a barrage of arguments and pokes holes in the other’s logic.
Finally, the politician seeks to influence and woo an audience. Their goal is to win over the approval of the crowd for themselves, the organization they represent, or the ideas they are protecting.
The risk, then, is that “we become so wrapped up in preaching that we’re right, prosecuting others who are wrong, and politicking for support that we don’t bother to rethink our own views.”
Potentially, the executive team at Blockbuster didn’t want to believe their entire business model was being upended by the internet (Preacher mode), or they thought the idea of someone ordering DVDs from home was ridiculous and their business wouldn’t work (Prosecutor mode), or maybe they didn’t want to upset their investors by pivoting to a potentially new business model (Politician mode). Whatever the case, they refused to rethink their ideas about how people want to be entertained at home based on preconceived assumptions about how the world works.
So, what do we do?
In order to constantly stay on the edge of ideas and make relevant decisions with our lives, none of the previous personas is feasible long-term. Of course, there are situations and opportunities that perfectly align with being either a preacher, a prosecutor, or a politician. But if you stay in either of those mindsets, you never allow yourself to question your beliefs and potentially, change your opinion on something.
The answer, then, is to think like a scientist. In Grant’s words,
“If you’re a scientist by trade, rethinking is fundamental to your profession. You’re paid to be constantly aware of the limits of your understanding. You’re expected to doubt what you know, be curious about what you don’t know, and update your views based on new data. In the past century alone, the application of scientific principles has led to dramatic progress. Biological scientists discovered penicillin. Rocket scientists sent us to the moon. Computer scientists built the internet. But being a scientist is not just a profession. It’s a frame of mind—a mode of thinking that differs from preaching, prosecuting, and politicking. We move into scientist mode when we’re searching for the truth: we run experiments to test hypotheses and discover knowledge.”
Does that actually work?
More than a hundred founders of different startups recently performed in an experiment conducted by researchers. Most of the founder’s companies were pre-revenue and varying in fields from retail to health care.
What the researchers wanted to discover is if there was a true benefit to teaching how to think like a scientist. They split the group in two: one group was the control group and the other was the “scientific” group. Each group would participate in the identical training regime on how to write a business plan, how to interview customers, build a minimum viable product, and create a prototype. The only difference was the scientific group was encouraged to think about their company through the lens of a scientist. This meant constantly questioning their original hypothesis (their business plan) and pivoting if the data wasn’t reading the results they wanted.
Over the following year, the companies in the scientific thinking group averaged over $12,000/month in revenue while the control group averaged just under $300/month.
Once the companies identified their business strategy and their product, the companies in the control group were much less likely to change either of those variables, no matter what the data said. On the contrary, the scientific thinking group knew when their strategy (or hypothesis) wasn’t supported by their data (the customer’s purchases), they simply pivoted. The scientist group was not as tied down to their original idea and plan as the control group was.
What’s the catch?
There are usually two obstacles that prevent people from thinking like a scientist. The first, confirmation bias, describes the tendency people have to see what they are already expecting to see. Everything they observe is being confirmed by what they already believe. Usually, people already form a hypothesis for how something will react or behave and everything seems to confirm that original hypothesis. Objective data and results, no matter what it says, somehow confirm their hypothesis.
The second obstacle is desirability bias, which describes people’s tendencies to see what they want to see. This has been observed lately with cancel culture and the media. When a news story breaks about someone based on facts that aren’t supported by evidence, everyone cancels them. When that person tries to explain what happened, their explanation is twisted in a way to make it sound disingenuous and like they are covering up the story, even though they’re just telling the truth.
How does this end?
These observations aim to help emphasize the need to think and rethink our opinions, goals, and observations about how the world works. And once you identify those observations, don’t be so stuck to them.
In the words of Adam Grant about the power of thinking like a scientist, he says this,
“When we’re in scientist mode, we refuse to let our ideas become ideologies. We don’t start with answers or solutions; we lead with questions and puzzles. We don’t preach from intuition; we teach from evidence. We don’t just have a healthy skepticism about other people’s arguments; we dare to disagree with our own arguments. Thinking like a scientist involves more than just reacting with an open mind. It means being actively open-minded. It requires searching for reasons why we might be wrong—not for reasons why we must be right—and revising our views based on what we learn. That rarely happens in the other mental modes. In preacher mode, changing our minds is a mark of moral weakness; in scientist mode, it’s a sign of intellectual integrity. In prosecutor mode, allowing ourselves to be persuaded is admitting defeat; in scientist mode, it’s a step toward the truth. In politician mode, we flip-flop in response to carrots and sticks; in scientist mode, we shift in the face of sharper logic and stronger data.”