Kathleen Eisenhardt: Simple Rules for a Complex World [Entire Talk] | Summary and Q&A

Transcript

Read and summarize the transcript of this video on Glasp Reader (beta).

Summary

In this video, the speaker discusses the power of simple rules and how they can be used in various aspects of life, including business and decision-making. The speaker explains the different types of rules and why they work, as well as how to create and update them.

Questions & Answers

Q: What is the difference between how entrepreneurs and academics approach studying companies?

Entrepreneurs often focus on their own experiences and the companies they have started, while academics study multiple companies and gain a broader understanding of the entrepreneurial world.

Q: What are Simple Rules 1.0 and what are their key features?

Simple Rules 1.0 are simple, unique rules that relate to specific activities. They are typically 2-5 rules that simplify decision-making and focus attention.

Q: Can you give an example of Simple Rules 1.0 in action?

Michael Pollan's simple rules for eating are a good example. He suggests eating real food that your grandmother would recognize, eating mostly plants, and not eating too much.

Q: How do you determine your objective and identify the bottleneck when creating Simple Rules?

To determine your objective, you need to keep it specific and measurable, such as wanting to be the top U.S. solar residential company by revenue. The bottleneck is the main obstacle or challenge that is preventing you from achieving your objective, such as Yahoo's struggle to attract great computer scientists.

Q: Can you provide an example of Simple Rules in crowdfunding platforms?

Indiegogo has simple rules that allow any legal project to be funded, while Kickstarter curates its projects and only selects certain categories for funding based on staff preferences.

Q: How do you create Simple Rules according to the speaker?

To create simple rules, you first need to determine your objective, identify the bottleneck, and then brainstorm or seek expert advice to develop the rules that will help you overcome the bottleneck and achieve your objective.

Q: Can you provide an example of Simple Rules in arctic exploration?

The speaker mentions the example of Roald Amundsen, an arctic explorer who used Simple Rules to successfully reach the South Pole before Robert Scott. Amundsen had rules such as resting the dogs once an hour and always having a lead skier in front of the dogs.

Q: What are the different types of rules beyond Simple Rules 1.0?

The speaker discusses Boundary Rules, Priority Rules, How-to Rules, Timing Rules, and Stopping Rules.

Q: How are Timing Rules and Priority Rules different from Simple Rules 1.0?

Timing Rules and Priority Rules are harder to learn and typically involve deciding when to act or which tasks to prioritize. They require more understanding and experience in a specific field.

Q: Can you provide examples of Timing Rules in nature and investing?

Dragonflies migrate based on Timing Rules, specifically freezing temperatures and wind speed. In investing, Warren Buffett's rule of investing in what you know is a Timing Rule that helps him make better decisions.

Q: How do Simple Rules make decision-making faster and lead to flexible opportunity capture?

Simple Rules focus attention on important factors, proxy for more information, and provide guidelines for decision-making. They allow for faster decision-making and flexibility in capturing opportunities.

Takeaways

Simple Rules are an effective tool for making better decisions, scaling business operations, and coordinating large groups of people. They work by simplifying and focusing decision-making processes, serving as proxies for more information, and allowing for efficient and flexible opportunity capture. Simple Rules can be created by determining objectives, identifying bottlenecks, and developing rules based on expert advice or personal experiences. It is important to update and refine Simple Rules over time to ensure their effectiveness.