Decisive: How to Make Better Choices in Life and Work

by Chip Heath

imagine a restauranteur, Jack, who is deciding whether to take out a loan to start a Thai restaurant in downtown Austin. What’s in the spotlight, for him, will be all the factors going for him: I’m a wonderful Thai cook. The location on 4th Street would be perfect. The foot traffic in that area is huge. There’s no other Thai restaurant close by. From the inside view, the opportunity looks pretty good. By contrast, the outside view does not treat Jack’s situation as unique. It looks for the averages: Are there other people who’ve faced a similar situation, and if so, how did they fare? This involves looking for, in statistics terminology, some “base rates” on the situation—data showing the record of other people in similar circumstances. Jack might learn, for instance, that 60% of restaurants fail in their first three years. From the outside view, the restaurant looks pretty risky.