Sometimes your gut feeling is plain wrong

Use it the right way. Startups, Management and People

We think of intuition as divine messages from above but the fact is that hunches are formed out of our past experiences and knowledge. So how good is relying on our gut feeling for making decisions? This was something that made me wonder for a long time. Do you listen to your gut or do you give in to logic?

There is another angle to this. You first look at the facts as objectively as possible and then a gut feeling happens that contradicts the facts. In that moment if you try to give in to your intuition unconsciously your mind will try to find arguments to support it and needles to say most arguments will not be sound from a rational point of view. But hey, that won’t stop you from believing in them.

Take my case for example. When I put in balance the likelihood of an unfortunate event to happen I first try to look objectively as I can at the facts. From this I obtain a first conclusion that let’s say is the rational one. After this, sometimes, I also get a feeling of “come one, this will not happen” or “this will not happen to me”, or “ it is not the case right now” or I don’t want to even look at the facts anymore. I start changing the rational facts because I already know “the correct answer”, I have a good intuition. It happens that I dismiss hard facts and evidence because of a hunch. This sometimes has lead me into problems.

A good example where intuition is way off track is the Monty Hall problem. It puzzled me the first time I have learned the answer. It is a perfect example of how your gut feeling is just wrong.

It goes like this:

You are in a TV show and you have to select 1 out of 3 doors. Behind one of this doors is a fast new car, behind the other 2 there is a goat. If you select the door with the car you win it.

You start the game and you chose a door. After this, Monty (your favorite TV host) reveals a door that had a goat behind it (he knows where the goats are :) ). He now asks you if you would remain with your first selected door or you would like to switch. What do you do?

You think that now there is a 50% chance to choose the right door, I mean there are 2 doors, one has a goat and the other one has a car behind it. It doesn’t matter if you switch or not but also making up your mind could bring bad luck so it is better not to switch. WRONG !

Now comes the answer. If you switch you have a 66% chance in getting the car, if you stay with your previous decision you just have a 33% chance.

The mathematical proof is trivial if you compute all the probabilities of the options. I will lay it out here and leave at the end of the post the full logical table for the proof.

So here is the thing: you choose one door, Monty will open a door with a goat (he known where the car is). Now comes the interesting part. If you have first chosen a door with a goat behind and if you switch now you will get the car. (only the car remains in the game after Monty shows the door with the goat).

What is the probability of choosing a door with a goat behind it the first time: 66% (2 out of 3).

Still with me? If not at the end of the article there is the full logic table along with a detailed explanation of the solution.

This it is not intuitive, your gut feeling screams inside that this can’t be possible and it is right (I know because I have rejected the answer a couple of times until trying to solve it myself).

Remember the fact that intuition is based on past experiences, and most of the time you probably had to chose between same probability events like in childhood when a friend grab a rock in one of his hands and then asked you to guess in what hand the rock is. 50% — 50%

What I am trying to say here is not to not trust your intuition but to be careful when to trust it.

Startups are an interesting subject where this tale has some meaning. Startups are not intuitive at all because when you first start a startup odds are you don’t have the previous experience. You will have to do things that contradict your gut and this will result in a strange feeling.

A good metaphor is with skying. When you want to slow down your intuition tells you to lean back but if you do that you will fall, you have to lean forward. Startups are the same, you should lean forward. Paul Graham has an excellent article on this matter.

When would it then be ok to use your gut feeling in a startup or business? It is good to take your gut into consideration on matters where you have a broader previous experience.

Trust your intuition in situations you have plenty of past experiences.

But if you are a young founder in starting a business or you are a young manager odds are you don’t have a rich previous experience. There is one thing you can do and do carefully: listen to advice and use aspects that you have done in the past.

Trust your instincts about people…it pays out.

“Trust your instincts about people… This is one case where it pays to be self-indulgent” (Paul Graham). In startups or management working with people, hiring them, partnering with them, raising money from them, driving business together is very important.

You can use this “skill” because you have used it your entire life. You have a life of experience in choosing people you like to interact with. As I have said in a previous article, the most important job of a manager is hiring the right people, it’s also the same for entrepreneurs: choosing the right co-founders, partners, investors and employees.

Trust or no trust?

The answer is that it depends. The more you have past experiences in a certain field/topic and you cover a broader spectrum of it the more chances are that your intuition is wright. One such valuable example is choosing people to work or do business with. In Startups and Management it is all about the people, so use also your gut in finding your next co-founder, business partner or future stellar employee because it matters.

Of course experiences may vary, it is as subjective as it can be. If you have questions or want to share experiences where intuition was pointing in the wrong direction let’s hear them in the notes below.

Monty Hall problem

As promised here we have the logic table of all the possible outcomes. As you can see, if you switch, the probability of getting the car is the probability of choosing a goat for the first time.

Remember, you make a choice, then Monty shows you a door with a goat and then you have the option to switch or not. In the table below there is a first choice. Based on the first choice Monty will show you a door that has a goat behind it. Now you have to choose if you switch or you don’t.