How to Deal With a Sunk Cost Fallacy

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A sunk cost fallacy is a real logic of fallacy. Like the fact that you have been doing something for a while means you want to keep going because if you change your mind now, then you're basically passing judgment on all your prior decisions. So again, if you're on a path of wanting to be right in the context of others, logical consistency is your primary optimization target. If new information comes in, that is not dangerous to your identity. This is what your curiosity steals you towards. And if that piece of information invalidates any of prior beliefs, you might completely change. Obviously, you need to go do the exact opposite of what you've been doing until this point. Your

Tobi Lütke is the CEO and Co-Founder of Shopify, the powerhouse company allowing anyone to start and grow their e-commerce business. Over an incredible 18 years, Tobi has scaled Shopify to 10% of total US e-commerce, millions of merchants in over 170 countries, and a market cap today of over $60BN. Huge thanks to Harley Finkelstein for making this happen.

In Today's Episode with Tobi Lütke We Discuss:

1. From a Small German Town to One of the World's Most Powerful CEOs:

What did Tobi want to be when he was growing up?
Who did Tobi learn most from in his younger years? How does Tobi think about the importance of mentorship in learning?
What does Tobi know now that he wishes he had known when he started Shopify?

2. You Can Learn More from World of Warcraft Than You Can Companies:

Why does Tobi believe you can learn more from World of Warcraft than you can from studying companies?
Why does Tobi believe that humans are terrible at company building? What are the most obvious ways we can improve the quality of the companies we build?
Why does Tobi believe that in-person is far superior to remote working? What are the nuances?

3. The Best Companies Operate with Many Constraints:

Why does Tobi believe in all cases, constraints produce creativity?
What is the difference between an enforced constraint and an artificial constraint?
How can leaders create and enforce artificial constraints when they are not real?
How do the best leaders use constraints to ensure their companies move faster and faster?

4. Inside the Mind of Tobi Lütke: Decision-Making & Prioritisation:

How does Tobi reflect on his own decision-making process? How has it changed?
Why does Tobi believe that sunk cost fallacy is BS and only leads to your outsourcing approval to someone else?
Why does Tobi hate "black boxes"? How does he remove them from the org entirely?
How does Tobi decide what to learn? What is his learning process once he has made this decision?
How does Tobi decide what to prioritise in terms of strategic initiatives for Shopify?