Big Deal Small Business: Fighting Perfectionism
March 10, 2022 | Issue #64
I’m by no means a perfectionist. In fact, attention to detail is probably one of my weaker areas. I’m fairly comfortable ignoring stuff that is wrong but doesn’t really matter.
Early in my PE/finance career, this was a liability. I made errors that made me look really bad (dumb math errors, font consistency across a slide deck, etc.). Nothing big that “mattered” though (I didn’t work on much that mattered anyway).
As I got further into my PE/finance career, this mentality turned into an asset. Some associates/principals were too busy trying to analyze every single possible input for a model – they were chasing perfection. But what seemed “perfect” was really just false precision.
I was better at identifying the key drivers that would actually determine our investment returns. I focused on the range of outcomes possible for those key drivers rather than trying to nail down “the base case.”
That skillset is proving to be surprisingly relevant now that I’m jumped into the deep end with my small business. The urge to chase perfectionism is stronger than ever.
As I learn how the business works, my internal dialogue is just a constant refrain of “but why??”
Why do we move physical sheets of paper from this folder to that folder to another folder?
Why do half our Google Ads seem to have broken conversion tags?
Why do we handwrite paychecks instead of direct deposit?
Etc, etc, etc.
I was advised by TONS of folks to not mess with anything early on, and I’ve stuck to that so far despite wanting to immediately change processes.
Even just a week or so in, I’m starting to see some answers to my question. There is a reason behind many of the Whys. That reason may be a zombie reincarnate of the original reason, but the basic logic is sound.
Why do we move physical sheets of paper from folder to folder around the office?
Because each folder is meticulously ordered by date and represents a different stage in the customer lifecycle. It’s our customer funnel, but physically manifested.
Why do half our Google Ads have broken conversion tags?
Because we’re booked 3 months out, so who cares? 80/20, getting our Google Ads is a lot less important then figuring out how to add capacity.
Why do we handwrite paychecks instead of direct deposit?
Because the crews come by the office to relax & unwind at the end of each week. The office is a comfortable, inviting space for them. Picking up a paycheck brings everyone together, and creates space for the new guys to get to know the old guys. It’s foundational to company culture.
In other words, the minute I got started, I could see a dozens of new potential optimizations that I hadn’t see during DD.
But out of those new ideas, my guess is ~50% are misreads by me and actually have good reasoning. Another 45% probably don’t matter that much.
But maybe 5% will matter. I’m doing my best to figure out which ideas matter, and then focus on those after my first few months of learning come to end.
Reg Zeller explained this concept well in this thread, so have a read of how he thinks about it.
Anyway - I’m having fun, learning a lot, and haven’t broken the business yet. Onward!
Thanks,
Guesswork Investing