I’ve made lots of errors as an angel investor, and I try not to beat up on myself when things don’t go well. I understand that this is a learning journey, and it’s going to take me time to get better.
This is why I analyse my errors systematically, because I don’t want to repeat them again.
The No Brainer Issue
I have found that I am more likely to make mistakes when I think things are pretty obvious. It’s when it seems that the issue seems to be a straight-forward “no-brainer” which just needs common sense to resolve, is when I am most likely to err.
When it’s a complicated issue – one I’m not sure about, I need to do a lot of careful thinking – what Kahneman calls “Thinking slowly.”
I take my time weighing the pros and cons, and am more likely to come up with the correct solution. However, when the answer seems obvious, I end up “thinking fast” which means I am more likely to mess up.
I have learned that when I think that fixing the problem needs only “common sense” that I need to be maximally on my guard to prevent errors!
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]