The concept of the regret minimisation framework is something that I’ve wanted to write about for a while. I first came across this topic when I read Brad Stone’s book called The Everything Store: Jeff Bezos and the Age of Amazon.
Although Brad Stone never interviewed Jeff Bezos for the book, it is still one of my all time favourite business books. It was originally published 2013, so it is a little of out date, and one of the reasons the author has written a follow up book called Amazon Unbound: Jeff Bezos and the Invention of a Global Empire. I’m really looking forward to reading this as well.
It was in this book that I was first introduced to the concept of the regret minimisation framework. A concept Jeff Bezos used when deciding to start Amazon. At the time Jeff Bezos was working in New York for hedge fund called D.E. Shaw. He was a senior vice president of the firm (age 30), earning a good salary and would most likely have gone on to have a successful career on Wall Street.
Instead, he chose to pack everything up, move across the US to Seattle and start what we now know as Amazon. This decision led to what is now an enormous global organisation and made him the wealthiest person in the world. In hindsight, it looks like an obvious choice, but at the time that was a brave move. How many people would have left a secure, high-paying job on Wall Street to start what was initially on online book store?
The regret minimisation framework was the mental model he used to make this decision.
Here is Jeff Bezos explaining it in his own words.
The regret minimisation framework boils down to this:
If you’re having a hard time making a decision, imagine yourself as an 80 year-old looking back on your life. Would you look back and regret not doing the thing you are unsure about?
I think Jeff explains why the framework works so well. It helps you think long term and it reduces the impact that short-term factors, such as a bonus, have on your decision making.
The thing I like most about this framework is that you can apply it to many different things, it doesn’t only apply to big life decisions.
Personal Experience
Ever since coming across this framework I’ve used it often in my personal life to help with decision making. As an example, when my wife and I decided to move to Amsterdam in 2018 we used this framework to help our make our decision.
It was a big move. New country, different language, away from family and friends. We had to apply for new jobs, find a place to live and learn a new language. At the time we had good careers, lived in a beautiful city and were around the corner from our families. There were many reasons not to leave.
But this is a perfect example of a situation where if we had to project ourselves forward to 80 years-old, look back on our lives, and ask ourselves if we would regret not moving to Amsterdam (or any other country for that matter) the answer would be yes.
We’ve now been here for three years, started a family, and don’t have plans to leave anytime soon. It was the 100% the right decision. Was it hard? Absolutely. But when we’re 80 years-old, looking back, we’ll never have that feeling of “what-if”.