Keep It Simple, Stupid

Part 1: How Irrelevant Complexity Leads to Bad Decisions

(Want more simple, flexible models of things in business and everyday life? Check out the Resolution Examples page.)

Let This Sink In

Once upon a time, an extremely famous, extremely rich guy named Elon Musk bought an equally famous social media company named Twitter. 

All hail the new king of Twitter.

Twitter was not a financial juggernaut. It was an unprofitable company, and because it was also a public one (and had been for some time) everyone knew it. However, it was both kind of weird and very popular with famous people, and was disproportionately influential as a result.

Over the years, a lot of people had ideas for how to “fix” the business of Twitter. Those people did normal things with those ideas — they wrote about them, built competing companies focused on doing those things, or joined Twitter and tried to execute them internally. A very small number of people with sufficient means tried to change Twitter by buying up pieces of the company. That last one was especially difficult, because while the company was unprofitable, it was quite large and was worth billions and billions of dollars.

Elon Musk took the most extreme possible approach to remaking Twitter in his image. He sold a bunch of stock in his companies and performed a leveraged buyout of Twitter, Inc. — lock, stock and barrel. He removed the leadership of the company, laid off roughly half of the staff, and began ordering the remaining employees to change Twitter.

Would it work? Even for the richest guy in the world, the finances were tricky — Twitter cost $44 billion, and since that’s a lot of money for even the richest guy in the world, Musk paid for about a quarter of that with debt that was to be paid back by Twitter itself. Simply servicing that debt added a billion(!) dollars a year to Twitter’s expenses in an already challenging business environment for an unprofitable advertising company.

However, like the rest of us, Musk had ideas. Product ideas. Business ideas. Organizational ideas! Some ideas were big, some were trivial, some were insane, and some had already been largely built by the employees he would immediately fire (or in some cases, fire later).

With all these factors — new ideas, challenges, financial factors, etc., the entire thing became the most exciting question in business. Could the self-proclaimed real life Iron Man’s free-for-all approach and top-down antagonism turn the company? There was no way to know!

Except… there was. It wasn’t even that complicated. Musk’s plans were illogical and self-destructive, and incredibly, thousands of regular people realized it before he did.

The Complexity is Real

Telling people that “things aren’t that complicated” is a good way to irritate anyone who knows a lot about those things. Many things are complicated, and complicated things are naturally hard to understand. You have to either be really smart, spend a lot of time studying them, or some combination of the two in order to really understand all the nuances of any given thing.

But — and this is a big one — there’s a HUGE difference between whether something is complicated, and whether any of its given complexities actually matter when answering a certain question.

Let’s say I found a house I really like. Should I buy it? Well, real estate is complicated. Interest rates can be a big factor, and whether I get a fixed rate or variable rate mortgage can have a huge impact on my monthly cash flow and long term financial health. The condition of the house itself is also a complicated issue. Various things may need to be fixed or replaced altogether, which can make a huge difference to how much money I’ll need, and when I’ll need it. I could go on like this for hours — buying a house is a huge, and extremely complex decision.

Except, this decision is not complex at all. The house costs $10 million, and I am currently unemployed.

I should not buy this house.

The Complexity is a Lie

People (including me) add true, but ultimately irrelevant complexity to things all the time. Some reasons for this include:

  • a desire to reach a certain decision that’s the opposite of what default logic would indicate
  • a desire to reach no decision at all
  • fear of making the wrong decision and hoping that considering more factors will make that less likely
  • a personal, professional, or emotional attachment to one or more lower-relevance factors
  • a desire for others to think we are smart, and using complexity as a proxy for that intelligence

One of the reasons it’s so important to understand the idea of complexity is because it’s not actually possible to understand every specific complexity. If you’re making decisions about something — anything, really — almost by definition you have to dismiss some amount of very real complexity. The socks I choose to wear in the morning probably affect my comfort, and my comfort probably affects what I get done during the day. I have literally worn socks that physically annoyed me so much, they ended up making me less productive and more irritable at work. But for the most part, I just put on socks in the morning without thinking about them because I have a lot of stuff to think about, don’t know a lot about socks, and don’t have the time or inclination to learn.

Socks are complicated, but they don’t matter.

Unless they do.

… But they usually don’t.

Misreading Complexity Leads to Bad Decisions

In conclusion, the two worst things you can do when you make decisions are:

  1. Ignore relevant complexity
  2. Take time to consider irrelevant complexity

There you go, thank you for coming to this TED talk. Seriously though, this is an extremely broad condemnation of bad leadership and decision-making, but it’s also pretty hard to argue against, and it’s bizarre there isn’t more investment in making day to day questions and challenges not just as simple as possible, but appropriately simple.

Elon Musk is — again — the richest man in the world, and he has completely whiffed on this to an absolutely horrifying degree. He thought the business economics of Twitter today were infinitely complex, and that he could grow the company by disregarding many things Twitter does, and exchanging them for things that it does not. He also thought various elements of Twitter (like the value proposition of advertising, or the social and business impacts of various verification strategies) weren’t complex at all, and would either continue working as they had, or simply wouldn’t matter. So far, he’s spent a bunch of time pontificating about video lengths and the benefits of Twitter theoretically becoming the most accurate source of information in the world (irrelevant complexity) while hand-waving away the concept of “brand safety” that is absolutely critical to how the company stays solvent.

Again, this is not to say Elon Musk can’t handle complexity. He definitely can, because he works on complex things all the time. However, what he’s struggled to do here is read the terrain properly, and assess what issues are hard because they’re complicated, and which ones are hard despite being incredibly simple.

Why Are We Bad at This?

Now, many of us are significantly less successful than a world-famous billionaire, which means we can all stand to get a little better at reading, using, and sometimes ignoring complexity. So how should we do it?

Complexity is a funny thing. There’s a base level of it any given analysis needs in order to be useful, and that amount varies based on the question. However, any additional complexity after that is a net negative, as it diverts our attention away from the fundamental truth of the question, allows people to get distracted, and helps us miss the point. So complexity is essential, until you have enough, at which point it becomes extremely bad.

In 2022, we are very good at adding complexity to things, and the complexity is often technically true! It’s just not relevant most of the time, or relevant enough to justify giving it a lot of weight in our decision making process. The other thing the world of 2022 is really good at is stripping out complexity, but again… not with relevance in mind. We can give you a dashboard of anything, but when the dashboard tells you something irrelevant or out of context, suddenly it’s your fault for setting it up wrong.

So that means we still leave a lot of important simplification up to humans. There’s a reason why people who are pretty smart, but aren’t afraid to sound dumb sometimes, are often such good modern-day problem solvers. It’s because they’re the kind of person most likely to correctly assess a situation as simply as possible, in the process stripping away tons of irrelevant complexity. Sure, sometimes they’ll strip away too much. But, if they’re actually smart and not especially insecure, someone will correct them and they’ll simply add whatever key factors they’ve glossed over.

(Also, many times someone will object to the simplicity of an explanation, but when pressed, fail to justify the additional complexity. This is always hilarious.)

However, if you’re scared to sound dumb, you’ll never strip away complexity (it’s too risky!), which means you’ll never be the person who successfully cuts through it. To be super clear about this, it’s not that “simpler = better”, because as stated previously, that’s not actually true. What’s actually better is the simplest version of something that is still fundamentally correct.