October 1, 2026

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Hi Everyone,

How sure you feel about a decision says nothing about whether you're right. Daniel Kahneman and Gary Klein tested this for six years, from opposite starting points, and it was one of the few things they fully agreed on.

They also agreed on when instinct does work, and their answer comes down to two key conditions.

Today we're breaking down those two conditions, plus three questions that tell you whether to trust your judgment or the data on your next big call.

When your gut is worth trusting

Instinct is reliable when two things are true. The situation behaves predictably, and you've had years of practice with fast, honest feedback on your decisions. Hiring for a role you've filled ten times qualifies. A market you've never sold in does not.

Three questions before you commit

1. Can we undo this cheaply? A price test you can reverse in a week needs less caution than a three-year lease or a key hire. If undoing the decision would take months or serious money, slow down.

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2. Have we made this call before, with fast feedback? Experience in one setting doesn't automatically carry over. Mark Tritton built Target's successful own-brand products, then brought the same strategy to Bed Bath & Beyond. Customers didn't want it. Sales fell 25% in a quarter, and the board removed him. Kahneman warned that experts rarely know where their expertise ends.

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3. What costs more, deciding late or deciding wrong? When the decision is easy to reverse and a competitor is moving, deciding late is usually the bigger cost. When the decision is permanent, a wrong call costs more than a week of checking.

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Now put the answers together. If the decision is easy to undo and you've made it many times, decide today on judgment and set a date to review the result. If it's hard to undo, or new to you, write down your instinctive answer first. Then list what would change your mind, and ask one person to argue the other side before you commit.

What if we don't have the data?

Smaller companies often can't answer with numbers because the numbers don't exist yet. The check still helps. When you can't get data, make the decision smaller until you can reverse it. Test the new price with ten customers before changing the price list, or sell in the new market for one quarter before opening an office there.

And if your company has a dashboard for everything, run the same check on the numbers. Zillow's pricing model had years of data, but the 2021 housing market no longer behaved like the market it had learned from. That mistake cost more than $540 million and the whole home-buying business.

Go deeper

👉 McKinsey: Strategic decisions: When can you trust your gut? — read the full conversation between Kahneman and Klein before your next irreversible call; the parts where they still disagree are the most useful.
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👉 GeekWire: Why the iBuying algorithms failed Zillow — read this before handing any big decision to a model; it covers what Zillow's algorithm couldn't see, and why CEO Rich Barton pulled the plug.
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👉 Harvard Business Review: A Leader's Framework for Decision Making — use the Cynefin model to sort problems into four types before choosing how to decide on them.
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👉 Lenny's Podcast: Inside Linear: Building with taste, craft, and focus — listen to this if you run your company on judgment rather than dashboards; Linear's CEO explains how they build a profitable product with no A/B tests.

Coming up tomorrow

Tomorrow we’ll look at a one-hour exercise to help you choose your Q4 priorities, decide what to stop doing, and stay focused for the rest of 2026.

That's it for today!

P.S. What's the best pure gut call you've ever made? Hit reply and tell us.