Shreyas Doshi: preference

Transcript context

…Yeah, I think I learned this by kind of just observing Patrick at Stripe, particularly over the last couple of years that I was there. And then I kind of like encapsulated what I learned and observed in this tweet, which is when you are in a high leverage role, you should stop doing work that simply, that simply provides a positive return on investment ROI. And you should start focusing on work that minimizes opportunity cost. And what drives that is the observation that in a high leverage role, so like product management is a good example of a high leverage role. Founders by definition are in a high leverage role. Engineering leaders, design leaders, designers, like these are all fairly high leverage roles. And in a high-leverage role, there will be hundreds of things that you can do that will provide a positive ROI, right? And what is positive ROI? It's simply that the value created is greater than the value of your time. That essentially will ensure positive ROI, right? More than zero. So the problem is you should not be doing most of these things. And the reason this kind of ROI mindset is suboptimal and perhaps even harmful in high leverage roles, the formula for ROI is value created minus cost of your time divided by the cost of your time. So the cost of your time is in the denominator, right? And just for the sake of simplicity, let's just call it time taken, right? So when the time taken to do something is in the denominator and whether it's at an individual level or at a team level, what we end up doing to get high ROI on our work is we end up trying to decrease the denominator. So when it's a ratio and you decrease the denominator, the value of the ratio grows. Right. And so how do you decrease the denominator in this case where time is the denominator is you start working on things that take less time. Right. So you start like working on the low hanging fruit. You start prioritizing the quick wins. Right. And the quick wins are very popular. Right. Like any team meeting or sprint meeting. Oh, that's a quick win. Yeah, let's do it. Right. And I don't have anything against quick wins. The problem is we just fill up our plate with quick wins. And while that may be fine in most cases, in most situations, in high leverage roles, you miss the upside and you miss the opportunity that you could have gained by focusing on other things, right? Let's take opportunity cost now. Like how do you calculate opportunity cost? Opportunity cost is simply the value of the optimal option minus the value of the chosen option. Right. So the difference between what could have been the optimal option to pick and the option you did pick is the opportunity cost. Right. So you need to minimize the opportunity cost, meaning you need to be working on the optimal things. Right. So when we reprogram ourselves to think in terms of opportunity cost, we are no longer thinking, oh, is this a good use of my time? Right. meaning you need to be working on the optimal things. Right. So when we reprogram ourselves to think in terms of opportunity cost, we are no longer thinking, oh, is this a good use of my time? Right. Instead, you are thinking, is this the best use of my time? And it's a subtle but profound shift in our thinking, because when we think about opportunity cost, we will pick certain things that we would have never picked if we just had the ROI mindset. And again, this applies equally at the level of individuals, of the work we decide to do as individuals on a day-to-day basis, and the work we do with our teams, the things we prioritize. So that's sort of the basis of this statement that like you should try to minimize opportunity costs and focus on those things rather than simply chasing positive ROI. Is there an example that that comes to mind of when you did this or maybe did it the wrong way that kind of helped inspire this idea? Or is this just kind of more of a broad lesson that you've learned over time?…

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