But here’s the thing: I spent a decade deep in the hockey world, working in the media, working inside an organization, and regularly communicating with some of the heavyweights in the hockey industry. That scene in Moneyball was not too far off.

In all sports, but especially one as conservative as hockey, there has always been a battle between what’s known as the “Eye Test” and data/analytics. The eye test is more about anecdotal evidence, while analytics use hard data to try and show what’s actually going on. From the data perspective, it’s hard to argue with facts, yet many people do. “Facts are stubborn things,” John Adams once said, “And whatever may be our wishes, our inclinations, or the dictums of our passions, they cannot alter the state of facts and evidence.”

Yet, I experienced firsthand members of hockey’s old boys club doing exactly that. They often said things like “He’s a hockey guy.” That term, “hockey guy,” was constantly spoken to describe someone on the inside. If you didn’t have the connections or you didn’t look the part, you were just another schmo. But if you did have those connections, and if you did look the part, you were a “hockey guy.” Frankly, it didn’t matter how talented you were, just so long as you were a “hockey guy.” It was one of those unspoken rules in the hockey world, one that continues to have a stranglehold on the sport. It’s why it was one of the last sports to truly embrace analytics and data as a means of decision-making.

When advanced analytics first crept their way into hockey, much of the older generation fought back. Meanwhile, the younger generation tried to chastise those who were unwilling to utilize hard data. As someone who is now nearing middle age,1 I tend to favor a hybrid model, taking a little from each side of the aisle.

I’ve found this debate to be a big help in running a small business. The eye test is crucial, because there are always things that occur that may not show up in the data. But at the same time, you can just about always find a piece of data to support or reject a hypothesis.

Think about this: you can walk into a store and see hustle and bustle – a ton of customers lined up, a loud atmosphere, and a buzz of excitement. Great! But does the data show that it is translating into sales? Does it show that those sales are profitable? Does it show that the store is making the most use of its space? To me, the eye test is a means of telling you where in the data to look. And the opposite is true as well: I often will see something in the data that surprises me, which points me in a different direction for my own observation.

Anecdotal data is incredibly convincing. When three of your friends tell you they tried a new restaurant and it was terrible, you will probably never try that restaurant. But the Google rating may be 4.8, or it may have a James Beard nomination, or something of the ilk. In this case, the anecdotal data, or the eye test, doesn’t jive with the actual data. Something’s got to give.

The downside of missing out on a potentially great restaurant isn’t too bad. But the risk of mis-diagnosing a business issue can be catastrophic. You can watch a segment of your business operate for a few minutes and catch an issue that would never have shown up in the data. Consequently, you can pore through the data and find a nugget that you would never have considered while overseeing your company.

My strategy has always been as such: I love hearing people’s experience, listening to anecdotal data, and knowing what they saw. But my reply is almost always, “That’s interesting. Can you find the data to support that?” If they can’t, it doesn’t necessarily mean they were wrong. But if an idea can pass both the eye test and the data test, then it’s pretty much a slam dunk.

A word to the wise, though. Beware of confirmation bias. A lot of people, when forced to confront the other side, begin cherry-picking anything that supports their belief. If you force a data person to do the eye test, they can very easily weed through ten examples to find just one that supports their belief. Likewise, if you force an eye test person to look at data, they will find a single example to “prove” themselves correct. If you believe there is a particular item that is selling great, you have not proven yourself by picking out a single transaction where that item was bought. You need to be able to show that the item consistently sells, across days, customers, and seasons.

This happens in the public sphere constantly as well. Think about how often the CPI doesn’t match the public’s perception of inflation. Or how people say there are labor shortages, but at the same time the unemployment rate is high. Or headlines that make it seem like AI is driving our entire economy, all the while the vast majority of all income is being made in other industries. Data often contradicts intuition.

Ahead of his presidential campaign, John F. Kennedy commented sarcastically on the Eisenhower administration. He said, “Every bright spot the White House finds in the economy is like the policeman bending over the body in the alley who says cheerfully, ‘two of his wounds are fatal – but the other one’s not so bad.’”

If you find yourself picking through data to confirm your eye test, you will lead yourself astray. The eye test is important, but it cannot be the be-all end-all of leadership. You need to be able to support your ideas using every tool at your disposal. By utilizing everything at your fingertips, you are much more likely to make the kinds of decisions that keep your business growing and operating smoothly.

Subscribe now

“Our landings in the Cherbourg-Havre area have failed to gain a satisfactory foothold and I have withdrawn the troops. My decision to attack at this time and place was based on the best information available. The troops, the air and the Navy did all that bravery and devotion to duty could do. If any blame or fault attaches to the attempt it is mine alone.”

Have you figured it out yet? If not, you won’t be alone. It’s a letter Eisenhower wrote before the D-Day attack on the Germans in World War II. In fact, it’s a letter that he wrote to be released in the chance that the attack failed.

Fortunately, the attack succeeded, despite the loss of over 10,000 Allied troops. But the key line in Eisenhower’s letter gives us one of the most important leadership lessons in history: “If any blame or fault attaches to the attempt, it is mine alone.”

Eisenhower’s hastily handwritten letter ahead of D-Day (with the wrong month penned) shows how seriously he took his leadership role. Source: National Archives

Most importantly, this letter was not released publicly until after his death, when his presidential library uncovered it in their archives. Eisenhower wrote this letter knowing that it would (hopefully) never see the light of day. If it weren’t for his presidential library and the National Archives, we might never have known of its existence in the first place.

Eisenhower’s letter wasn’t symbolic, it wasn’t PR, and it wasn’t retroactive accountability. It was him honestly and humbly accepting his role as a decision-making leader. It shows that leadership isn’t proven by how you claim credit; rather, it’s revealed by how you prepare to accept blame.

Accepting blame is hard. It bruises your ego. “It makes human nature better,” said Abraham Lincoln, “To believe that one human being was perfect – that human perfection is possible.” He was talking about George Washington, but the quote works more generally as well. Everyone wants to believe that they can be perfect, at some level. We want to believe it’s achievable, and we should strive to improve every day. But we are all going to make errors, it’s part of life. And as a leader, knowing how to handle it when it happens speaks volumes about your character.

Accepting the blame and passing on the credit is, in my experience, key to being a good leader. After the U.S. Olympic hockey team won gold in 1980, someone asked coach Herb Brooks why he wasn’t celebrating with them. “They did all the work,” he said, “So they get all the credit.” Ask any of the 20 players about Brooks’ role, and they will forever confirm the immense part he played in their success. But Brooks was a true leader: he stepped away from the spotlight when his team triumphed, allowing them to bask in the glory. Yet, if they had lost, he would have been front and center, accepting the blame.

Admitting mistakes and accepting blame are key traits in a leader. Not only does it allow you to fix errors in a timely manner, but the vulnerability it shows helps bring people onto your side. Those same people will support you when you need it next time.

We’re talking about admitting fault and accepting blame here, which is important. But there’s another, more poignant leadership trait that hides in Eisenhower’s letter: prevention. It’s perhaps the highest form of leadership. The best leaders reduce the need for heroics in the first place by ensuring crises don’t become existential. He wrote this letter hoping no one would ever read it. It’s not so much what he wrote in the letter that shows his leadership – it’s the fact that he felt he needed to write it in the first place. He was willing to let that letter disappear into the annals of history. Taking blame to him wasn’t a public relations strategy, it was just the reality of how he thought. But more importantly, the letter was part of a larger strategy of preparation. Eisenhower was one of the great generals in American history, because of this type of behavior. He prepared diligently, took blame when he failed, and passed along credit when he succeeded.

Behavior like this helps create stability, which is important for a small business. Stability can look like stagnation from the outside. But inside, people like stability. It proves there is a steady hand running the ship and it’s usually the result of someone quietly doing their job extremely well. I’ve written before about how good leadership often lurks in the shadows. Almost all decisions you make as a leader are made quietly. Most leadership only ever happens in private – only a minority of your decisions are ever made public. Because of this, restraint can often be a better decision than action. What is left unsaid is often more important than what is spoken. And what is not done can have a greater impact than what is.

Restraint can take many forms as a small business leader. You can choose not to fire someone after they’ve made a mistake. You can make a deliberate decision not to expand. You can choose not to assign blame when disaster happens. These decisions may not feel like leadership in the moment, but the key is that these decisions are rarely applauded. They don’t show up in monthly or quarterly financial reports. And they often don’t even feel that bold in the moment. But more often than not, these “invisible” decisions matter more than the ones that become public.

There’s an old joke from the British Foreign Office. A civil servant said, “Every morning, I went to the Prime Minister and assured him there would be no world war today. And I am pleased to note that in a career of 40 years, I was only wrong twice.” It’s a humorous parable, but it shows that a good leader works to prevent bad things from happening in the first place, rather than simply accepting the blame after the fact. The most consequential leadership decisions are made before failure, before credit, and often before anyone knows they happened. It can often feel unsatisfying, or even annoying. But no one needs to be told that everything’s fine – they can sense it.

Those in the public eye and those with big egos often think that leadership is about performance. It’s not. Leadership is revealed in preparation. The absence of a disaster should not simply be an accident. And when there is a crisis, do you stand in front of your team, or hide behind them? At the end of the day, leadership isn’t proven in the moments everyone sees. It’s proven in the moments that never need to arrive in the first place.

Subscribe now

Cook was one of those few big business leaders that I looked up to as a small business leader. He was someone whose style and expertise really translated to the smaller companies that I’m used to running.

The Alabaman was Steve Jobs’ hand-picked successor, chosen while Jobs was in his final months battling cancer. Cook spent many years working at IBM and Compaq before joining Apple. He worked on the supply chain side of the company and eventually worked his way up to COO, where he served under Jobs for many years. He became a close and cherished confidante of the Apple founder.

Cook led Apple through one of its most financially-successful eras. Apple’s stock rose by about 2,000% during Cook’s tenure, growing the size of the company from $350 billion to $4 trillion. But he was oft-criticized by Apple faithfuls, specifically those that had a soft spot for Jobs’ design and product expertise. That criticism was loud enough to inspire an entire book arguing that Apple “lost its soul” under Cook.

Now, I’m not touching the “soul” part. I’ve never worked for Apple, nor am I the kind of person who analyzes the ridges and curves of each new iPhone version like it holds a clue to the Ark of the Covenant. But I am interested in how a company evolves over years and through generations. And Cook was inarguably one of the most successful company leaders of my lifetime.

Jobs was indeed a product genius. He opened the world’s eyes to the types of product we’re now used to seeing each year from Apple. And Jobs knew that wasn’t Cook’s specialty. So why would this “genius” want someone that his own fans didn’t trust?

Because Jobs knew that the next stage of Apple’s evolution was to focus on its operations and make the company more efficient. That’s what Cook spent years doing under Jobs, and it’s what Jobs knew the future held for his own company. Cook’s greatest contributions are largely invisible. It’s unnoticeable to consumers, but crucial to Apple’s success.

I’ve written before about the importance of focusing on operations in small business, and Cook’s success shows why.

One of Cook’s biggest successes in Apple was in how he strove to eliminate as much inventory as possible, so that Apple could free up more cash. Early on, he asked his staff how Apple could increase product turnover from 12x to a higher number. When they offered suggestions, he asked them how they could increase it to 1,000x. The number is apocryphal, but it shows how serious Cook was at creating efficiencies. He eventually overhauled the way Apple fulfills customer orders by completing the manufacture of products to order and shipping direct from the factory. In this way, Apple never actually had the inventory on their balance sheet: the customer pays Apple for a product, Apple’s vendor completes the build of that product, and then ships it to the customer. In this supply chain, the inventory never technically enters Apple’s ownership.

Most businesses think inventory is what enables sales. And that is sometimes true. But in the case of a manufacturer, it could be something that gets in the way of cash. That’s how Cook looked at Apple. Inventory isn’t just a balance sheet item. It’s a collection of decisions you’ve already made that you can’t undo. If it’s not in your inventory in the first place, but rather a part or two away from completion, you can offer more customizations to your customers without having to actually stock each version.

Operations were secondary under Steve Jobs, who was the product and marketing genius. But Cook, under Jobs’ tutelage and then on his own as CEO, turned the operations into Apple’s primary driver of profit, speed, and customer experience. He utilized his relationships with suppliers and made some brilliant moves, including: prepaying for capacity in order to lock in priority access; concentrating its volume with fewer suppliers to ensure it was the priority customer; making Apple too important for its vendors to ignore. There is definitely a benefit to spreading purchases across multiple suppliers, to not put your eggs in one basket. But the flip side of that is that it may not give you the power to negotiate better terms for yourself. Most small businesses won’t replicate this at Apple’s scale. But the principle still applies: the more important you are to your suppliers, the better your position.

How is this relevant to small business? First and foremost, Cook preached inventory discipline. Are you holding product “just in case”? Is too much product just sitting on your shelves? What product do you still stock because it used to sell or it has some personal or nostalgic meaning to you, even though it may not be pulling its weight anymore?

Cook also preached speed over stock. Can you place smaller orders, more frequently with your suppliers? Is your product something that can be customized later in the process? If either or both of these are true, you can increase your cash flow immensely by only pouring money into inventory as soon as you need it. In some cases, like Apple’s, you may be able to design the process in a way where your customers pay you for the product before you even have to pay to complete it.

Moreover, Cook showed us how important operations truly are. If your sales doubled tomorrow, would your systems hold? Or would they break? Multiple times in my business’s life, an explosion of sales nearly broke the company. It led me to double down on efficiencies and operations in order to ensure we could always handle an increase in business, no questions asked.

Lastly, Cook was laser-focused on cash flow awareness. Apple’s financial strength is its cash flow. Even when sales are stagnant, or they don’t have the hottest new product, their cash flow is the envy of the retail world. Apple’s cash flow has grown dramatically since Cook took over, and even in leaner years, still hovers around the $100 billion mark. None of us have that many zeroes on our financial statements, but the lesson still stands: cash flow reigns supreme.

The downside to someone like Cook is that he indeed seemed to take fewer risks with regards to product development. But he did what he was hired to do: he made Apple more efficient, more profitable, more nimble, and grew it into one of the most financially-powerful companies of all time. There’s a reason Steve Jobs handpicked Cook to be the heir to Apple. Jobs built Apple’s products and made the company iconic. Cook built the system that put those products into consumers’ hands within days.

Tim Cook is often described as the man who followed Steve Jobs. And to hardcore Apple fans, he is often the one who “lost Apple’s soul”. But that framing misses the point. He was never supposed to be Steve Jobs v2. His strength was operations and logistics, and he utilized that expertise to rebuild Apple around an entirely different strength. A business leader can not be everything to everyone. And Cook never tried to be. Most businesses treat operations as a support function. Tim Cook treated it as a strategy.

So, in his final months as Apple CEO, I salute Cook and the lessons he has for all business owners, not just the publicly-traded ones. Vision is important. But what is more important is someone to put it into practice.

Subscribe now

Shortly after their IPO, the company was valued at just over $2 billion. But the company soon began to falter, and after another few paltry years, the company eventually sold all of its remaining inventory, IP, and brand assets for just $39 million.

This story isn’t about the rise and fall of a company. That’s nothing special, honestly. Companies succeed and fail every day. The story here comes shortly afterwards.

That asset sale? That happened on March 30, 2026, a short time ago. Just two weeks after that, with their stock trading at $2.49, they made an announcement. They were accepting a $50 million investment, becoming an AI company, and changing their name to NewBird AI. In their press release, they said that they planned to “acquire high-performance, low-latency AI compute hardware,” as well as “provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service.”1

Despite the odd business decision and even stranger press release verbiage, the stock shot up to a high of $24.31. That’s an 876% return in a single day, for those of you keeping score. A company with no operations and a small pile of cash was suddenly worth $150 million because they said the words “AI.”

Now, to be fair, Allbirds was broken. Their core business was failing. Change wasn’t only optional, it was necessary. But there’s a difference between fixing a broken business and abandoning it entirely for something unrelated. One is adaptation, while the other is desperation dressed as a strategy.

I recently wrote about how AI is distorting everyone’s view of the economy. That’s not going to change anytime soon. Nor is the purpose of this column to try and change the world’s opinion.2 Rather, my goal is to help guide small business owners and leaders with the navigation of an increasingly-complex world. And there’s nothing more complex than a bubble mixed with irrational behavior. Public markets reward the story. But small businesses have to survive the reality.

I want to be clear: AI is not a fad. A fad is something that will eventually lose popularity and disappear. AI is here to stay. But what is becoming problematic is the premium the market now assigns to anything remotely related to the AI bubble. That becomes risky for everyone, especially those that try to chase revenue where none may exist.

As small business owners, we constantly have to evolve. We have to keep our eye on the horizon while also managing an operation of a few, or a few dozen people. It’s become increasingly difficult to do that when the world throws what feels like ten existential news stories at us each week.

And when things get difficult, it’s human nature to reach for something easy. Whether that’s AI (in this example) or some other trend, it can be an actual existential threat to your business. The reason you’re successful in the first place is because you found a market need, satisfied that need with an efficient operation, and continued to work on raising both demand and supply for your product or service. Your success is likely despite all of the craziness going on in the world, not because of it.

So when the world continues to be crazy and irrational, one of the keys is to take a step back and review your goals. Small business ownership is not about easy money, fast success, or taking gambling-like risks. It’s about playing the long game. Compounded interest plays an enormous role in small business growth. If your foundational revenue hits $5 million per year, you can safely bet that, if you do your job properly, next year you should have at least that same amount of revenue. You’re not resetting each year, you’re simply trying to build on that successful business model.

The challenge isn’t avoiding change. It’s knowing which change actually matters.

A simple test when you believe a new opportunity arises: does this new idea or opportunity strengthen your existing business, or does it require you to become a completely different business? When my family decided to purchase one of our customers back in 2013 to vertically integrate, the only question was whether it would strengthen our existing business. We weren’t looking to become something new. Instead, we wanted to ensure that this acquisition made our existing operations and financials stronger. It did, and we went forward.

Over the years, we were presented with plenty of other opportunities to purchase other businesses. And in all cases, we declined. It wasn’t because of price – some of those companies were offered to us at a steal. We passed because we couldn’t figure out how it would strengthen our core business.

If something is intriguing to you only because it’s attracting attention from everyone else, that’s not really a strategy. It’s more speculation. And if you want to speculate, go to a casino and play roulette. Same thrill, less risk to your employees.

A coda to the story: shortly after the stock exploded, Allbirds stock fell precipitously the remainder of the week, until it settled at 10.80, losing 55% of its value in just a couple days. Sure, it’s still trading at nearly five times what it was a week earlier, but we all know that it’s going to end up back where it started, perhaps even lower.

And the complete pivot to an unrelated and bubble-ish industry was not unprecedented. Back in 2017, the Long Island Iced Tea Corp. rebranded as a blockchain company, in an attempt to grab ahold of the budding crypto craze. While the stock nearly quintupled in the short term, it eventually crashed, was delisted from the stock market, and had multiple executives charged with insider trading.

A public company can afford to be that stupid – a small business owner can’t. Keep your eyes on what you know and what you do best. It’s great to take some risks and try new things. But just make sure those risks aren’t the existential kind, where you could bring your own company down. Businesses that last don’t chase what’s hot.

Subscribe now

But most people, and most companies, aren’t Apple. Most people and companies, however, are definitely blinded by others’ success.

Let’s take investing as an obvious example. Everyone wants to beat the market. And the best traders claim they do beat the market. So let’s look at the data.

There are over 16,000 investment conglomerates in the U.S., including mutual funds and exchange-traded funds. From 2014 to 2024, there were just 20 total funds that beat the S&P 500’s 327.8% return. Each of those 20 likely markets that fact, and thousands of others likely try to copy the investment strategies of those 20.

But if there’s anything we know, it’s that humans behave irrationally, and humans certainly ignore statistical probabilities. If you start in Year 1 with 10,000 investors, and every year 50% of them beat the market, then 13 years later there will be one person that beat the market every year. That person will say “I’m smarter than everyone else,” but in reality it’s just math.

So let’s take the real-world example. The 16,000 conglomerates that exist in this country? If half of them beat the market in any given year, then after 10 years, we would expect 15-16 firms to have beaten the market in total. That’s pretty darn close to the 20 that have actually beaten the market during that time span.

So if “winners” in the market are just a statistical normality, why are they considered “special” or “brilliant”? It’s because we like good stories. Everyone does. No one wants to admit that it’s just dumb luck. It’s more fun to laud brilliance and build people up. In reality, they are just the statistically lucky ones that have flipped a coin and landed on heads ten times in a row.

Subscribe now

There are a myriad of psychological terms that encompass this: selection bias, survivorship bias, outcome bias. The bottom line is that humans love starting at the end of the story and working backwards. No one starts their research or story with the 16,000 investors at the beginning. You start at the end, with the ones that won, and then back fill the decisions that you believe led to their success – even though 15,000 others may have employed the exact same strategy. We love studying survivors. It’s not a moral failing, but a data error. If 1,000 people each invest in different risky startups, and one of them becomes the next Facebook, the single person who invested in it is called a genius. They might very well be, but statistically, that makes no sense, especially since all 1,000 people thought they were backing the correct company.

In any sample of people, if you have a large enough number, someone will outperform. Over a long enough time horizon, someone will always look brilliant. That doesn’t necessarily mean they are. Long-term success doesn’t always require genius. Sometimes, it’s just probability. In large samples, extreme success is inevitable. But inevitability is not the same thing as insight.

In investing, it is widely known that the smartest investment strategy for an average investor (and even some Wall Street investors) is to put your money in low-cost indices that simply track the stock market. By nature, the “market” is almost impossible to consistently beat, because the whole point of the “market” is that it’s the most efficient collection of companies. So by tracking the market, you increase your chance of maximizing your return.

Even famed investor and longtime Berkshire Hathaway CEO Warren Buffett agrees with that sentiment. As someone who picked stocks for a living (and was incredibly successful at it), he regularly admitted that Berkshire failed way more often than they succeeded. But the ones you hit big on can grow indefinitely, whereas a mistake can only go to zero. It only takes a few home runs to erase hundreds of strikeouts. Even amidst his success picking companies, he still recommended that everyone simply invest in a market fund.

This happens all the time in business as well. We all compete against something or someone. Sometimes, your competitor is selling the exact same item as you. Sometimes they’re selling a competing item. Sometimes, you’re competing for people’s attention. And while it’s important to keep an eye on your competition, the most dangerous thing you can do is try to mimic your competition.

My family’s businesses were extremely successful. Not every single year, but we had many more good years than bad. And over the long term, that compounded into immense success for us and our staff. We did that by always keeping both eyes on our own companies. Yes, there was definitely a pile of luck throughout the years. But we never tried to copy anyone else. We always paid attention to what competitors were doing, but we didn’t make decisions based on that knowledge.

On the contrary, there were many companies in our industry that attempted to copy our business model. In fact, there was even a competitor who called me to tell me exactly that.1 That competitor didn’t last very long. Our business model worked great for us, but it’s possible that it only worked great for us. It’s also possible that it was all luck and we actually had no brilliance at all.2 The environment often matters more than the strategy. Timing, the economy, customer behavior, regulation – it all plays a role and none of us can influence those factors. A business that succeeded in a low interest rate environment might fail when rates increase. A strategy that worked in a fast-growth market may not be able to handle stagnation. And a model that worked when labor was abundant could collapse when the labor market tightens.

We should always learn from others’ successes and failures. Even those that fail potentially had great strategies. Sometimes, they did everything right but just hit a speed bump from which they couldn’t recover. Don’t get blinded by others’ success. Focus instead on process. You always see the one business that made it, but you don’t usually see the ten that tried the same strategy and disappeared.

Don’t mistake survivability for repeatability. Some strategies only work if nothing goes wrong. And there is often a tenuous fragility hiding just behind that success. What looks brilliant at scale may actually be lethal without a safety net.

Instead, you should study broadly, borrow selectively, and question relentlessly. The goal isn’t to find someone who beats the market. It’s to understand what would have happened if they didn’t.

Your attention is drawn to the old lady on the aisle, as you hope for her sake that she’s about to win big: seven…seven…cherry! Ah, so close! You stop for a moment and watch her mash that button again. Seven…seven…lemon! Must be rigged. But you still keep your eye on the machine. She was so close to hitting the jackpot! Maybe this spin is the one.

Forgetting the fact that casinos tend to program aisle-facing machines to win slightly more often than normal, what you’ve fallen for (and what nearly every human falls for) is what’s called the “close-call effect.” It hits us in all walks of life. Your favorite sports team loses the championship on the last play of the game and you feel absolutely crushed. If that same sports team loses in a blowout, you don’t feel quite as bad, even though the final score doesn’t change the fact that they still lost.

Near misses trigger the same reward center as wins in our evolved brains. Dopamine levels spike when you nearly win, which is dangerous. It reinforces behavior without delivering the actual reward of winning. Near misses increase engagement. That’s how casinos are so successful. They don’t want you to win. They just want you to continue engaging, and they do it by tricking you into thinking you’re about to win.

The brain interprets “close” as progress, even when it isn’t. This was one of the key findings of two famous scientists, Amos Tversky and Danny Kahneman. I’ve written about them before, but in short they performed tons of research on behavioral irrationality. They are perhaps the two people that most contributed to our library of knowledge about human behavior. The close-call effect came up many times in their research findings. For example, a traveler feels worse when they miss their flight by five minutes than if they missed it by 30 minutes, even though the result itself hasn’t changed. And if three people all have losing lottery tickets, the one who was only one number off feels worse than the ones who didn’t match a single digit, even though none of them won the jackpot.

While this is classic human behavior, and we all do this regularly, it can be fatal in business. Being oh-so-close to success can have disastrous consequences if you don’t properly analyze your failure. Near-success is more addictive than failure, because it preserves hope while preventing change. If you miss a sales goal by miles, you tend to break down the entire process and build it back up. But if you miss a sales goal by an inch, you are liable to think “Ah, we’ll get it next time.” And it’s possible that your process really is correct. But being close doesn’t make it correct. Being correct makes it correct.

Clear failure forces reassessment. Near-success invites endurance and grit in trying the same thing again. Endurance without reevaluation becomes inertia. And inertia is a death knell to most small businesses.

There are a large number of ways this can sneak up on you in business. You could have an incredibly busy week, and fall just short of meeting your productivity goal. A typical response can be, “We’re just one more hire away.” But in reality, it’s possible that your process is inefficient. Maybe you’re not one hire away, but rather could improve the process to the point where you’re actually over-employed by a few people.

What about a busy season in which you miss a sales goal by a small amount? It shouldn’t matter how close you were, you should always break down the entire process as if you missed it by a mile. Perhaps your process was right, but perhaps it wasn’t. It has no bearing on whether or not you’re on the right track. Leaders often confuse motion with progress. The two are correlated, but correlation does not equal causation.

Think of it like an accounting issue. If you’re adding up the debits and credits (in a pre-software world), and you’re off by three cents, it’s easy to assume that you’re just off by three cents. But in reality, you could be off by 3,564.05 in one column and 3,564.08 in the other column. That’s a much different picture than three cents.

What kind of phrases can you catch yourself saying, either out loud or silently, that mirror the close-call effect? If you’re behind on your bills, have you ever thought, “Oh, we just need one good month of business to get out of this.” Or, if you’ve been trying to solve a major operational problem, have you said “We’re really close, so we must be on the right track”? Sometimes your beliefs are indeed true, but it’s easy to be fooled by the close-call effect.

It’s just like the mantra, “Busy is not the same as better.” You can work your butt off, but if you’re not doing the right work, you’re not actually getting anywhere. We often confuse exhaustion with momentum. In fact, hardworking leaders are most at risk here. Persistence is often rewarded in our society. Grit is a strong, respected leadership trait. But those two alone don’t make someone successful. On the pyramid of business success, grit and hard work would be close to the top, not the bottom. You build a foundation with the proper strategy, team, and processes, and only then does hard work actually make a difference. If you’re asking “Why isn’t this working” instead of “Is this going to work at all”, you’re putting yourself and your business at risk.

Now, this doesn’t mean you should give up anytime you fall short. Far from it. Instead, any level of failure, whether you were an inch away or a mile away, should result in a reassessment. Failure is an excellent learning opportunity, even if you believe you were that close.

Near-success deserves scrutiny. Hell, even success still deserves scrutiny, because we can always improve. But what’s crucial, when you fall short, is to remember that hope is not a plan. Optimism doesn’t replace proper planning. Almost winning feels like validation. But sometimes it’s the last signal you’ll get before a decline.

Subscribe now

So down he went to Florida, turning his business over to the son, but he got weekly financial reports. And he hadn’t been in Florida very long before they turned sharply negative. In fact, they were terrible. So he got on an airplane, and he went back to New Jersey where the factory was. As he left the airport on the way to the factory, he saw one of his company’s billboards lit up. There was Jesus, spread out on the cross. And under it was a big caption: “They Used Liebowitz’s Nails.”

So he stormed into the factory and said, “You dumb son! What do you think you’re doing? It took me 50 years to create this business!”

“Papa,” the son said, “Trust me. I will fix it.”

So back he went to Florida, and while he was in Florida, he got more reports, and the results kept getting worse. So he got on the airplane again. Left the airport, looked up at the billboard, and now there’s a vacant cross. And lo and behold, Jesus is crumpled on the ground under the cross. And underneath, the caption said, “They Didn’t Use Liebowitz’s Nails.”

This is one of my favorite parables, once told by the late, great Charlie Munger. It illustrates how ridiculous it can look to the outside when someone clings to a failed idea.1 But despite this parable, it’s amazing how quickly you can find examples of this, especially in the small, family business world.

We had a joke when I entered the family business after college. As I was getting up to speed, I would ask a ton of questions. None more so than, “Why do we do X this way?” And almost universally, the answer was, “Because we’ve always done it this way.” As a young’un2, I found that reply incredibly frustrating. But over time it actually became funny. Because my dad (who also went through the same conversations with his dad years earlier) and the other managers in the business realized immediately how ridiculous the answer was.

Now, there are often reasons why you should stick to certain processes and ideas. Usually, you can articulate what those reasons are. And in a small business, it’s even harder to walk away from old ideas because those ideas did, at one time, work. Small business leaders are often emotionally invested in the way we do things right now. We remember effort, not outcomes. And we mistake familiarity for validity. Quite often, we over-appraise effort and under-appraise evidence. We see that something no longer works, but we just can’t get the nerve up to change what we believe is a core part of our business.

This can take many forms: it can be a product line that no longer sells well but you just won’t let it go because it helped you grow to the place you are now. It can be customers you insist on continuing to serve, despite the poor or even negative margins you get with those customers.3 It can be suppliers you defend out of long-term loyalty, even though their business policies may be nowhere near what they were five or ten years ago.

We all do it. I’ve done it. My dad did it. His dad did it. And I’m sure you’ve done it as well. Sometimes this stubbornness can be laudable. Other times, it’s damaging. What’s important to remember, though, is that it’s not a failure of character. It’s simply a part of the process of trying to sustain growth over the years.

Going back to the Liebowitz parable, the father is not stupid, and the son isn’t malicious. The son firmly believes he is correct in his marketing plan. And the father is obviously correct in his analysis of the situation.4 The mistake isn’t incompetence. It’s misplaced confidence.

We all make mistakes, and we all fail at various levels as business leaders. If the premise or the direction is correct, then failures are not only acceptable, but helpful to learn from. Where this becomes problematic is when you’re misunderstanding the situation in the first place. Brand inertia, legacy thinking, and confusing past success with present relevance are all ways to turn a company’s growth upside down. The issue with Hyman’s son wasn’t that he framed the billboard incorrectly. It’s that he shouldn’t have been utilizing the crucifixion in his advertising in the first place.

What fascinates me about this legacy inertia, for lack of a better term, is that the more intelligent you are, the more vulnerable you tend to be to this issue. Intelligence increases your ability to rationalize your own mistakes. I’ve seen brilliant businesspeople make horrendous mistakes because they completely misunderstood the situation. Oftentimes, it’s because they had seen such great past success that they naturally assumed what they were doing was right. Again, it wasn’t about smarts. It was about being stuck in a past mindset. What helped you grow from 0 to 100 doesn’t necessarily help you grow from 100 to 1,000. Different stages of growth require different strategies. Past wins create blind spots.

Small businesses often treat startup tactics as a permanent strategy. What worked when you were a nascent company trying to get off the ground does not always continue to work once you’re established and growing. Leaders also tend to confuse scrappiness and grit with scalability. You can work as hard as you want, but if you’re focusing on the wrong strategy, it’s just a waste of air. Think about the founder who insists on approving every order because that’s what he did when he was first getting started. The owner who refuses to delegate pricing because that’s the task he’s done for the past 30 years. Or the company that still interacts with customers like it’s desperate for business, long after it isn’t.

As a leader, confidence can often reduce your willingness to revisit your assumptions. If it’s worked in the past, it’s easy to assume it will work in the present or the future. But what’s important is to frame each issue as questions with consequences. What does this product/idea/strategy cost every year that it stays alive? What else could you do with the attention it consumes? What else could you do with the capital it consumes? What revenue/profit are you missing out on by not trying something new?

The goal in business isn’t to honor what worked. It’s to stay honest about what works now. Letting go of an old idea is not admitting failure. You can update your beliefs while still respecting and honoring the past and the decisions that got you to where you are. Past success deserves respect, but it does not deserve control.

Subscribe now

When people talk about the labor market, they generally refer to the national unemployment rate or the national labor force. But these numbers aren’t helpful for a small business. My business is in New Jersey, which means California’s labor data has no bearing on how easy or difficult it is for me to hire someone. Unless you’re hiring for remote work, you care only about your own region.

The problem is, the data most covered by the media is the national data. And those data tell us that the national unemployment rate is good: between 4.3 and 4.4 percent. In fact, since the job market recovered from the pandemic closures, the unemployment rate has never been above five percent. That’s the threshold under which the Fed considers the country at “full employment.” Usually that means it’s harder for businesses to hire.

But that data only tells a small piece of the story. Hiring problems aren’t just about wages, culture, or any other national theme. In fact, if you break down the unemployment rate by state, it can range anywhere from 2.2 to 6.7, which is an enormous gap. More often than not, hiring problems are literally about how many people there are available to hire in your area.

You may be beating yourself up because you can’t seem to find new staff. I’ve got good news, though.1 Your hiring problem may not be cultural or operational at all, but rather demographic. That’s what jumped out to me when I saw some census data buried deep in a recent Wall Street Journal article:

Allow me to mansplain for a moment: this chart shows net migration for each region of the country since 2021. As you can see, up until 2025, the entire country saw positive international migration, no one more than the South. But during the same time period, every area of the country saw negative domestic migration except the South. Residents that are moving are generally choosing to move to the South.

What this means is that as international migration has grinded to almost a halt in the last year, the West, Midwest, and Northeast have all seen their labor forces dwindle. The South, meanwhile, has seen a boom in their populations. This became apparent during the last two rounds of congressional reapportionment: in 2010, eight states gained seats in Congress, with only one of them (Washington) in either the Northwest or Northeast. In 2020, six states gained seats in Congress, none of them from the Northwest or Northeast. States that lost seats in 2020 include California, New York, Pennsylvania, and Ohio. Sense a pattern?

Furthermore, this second chart shows that population growth has dropped precipitously. There are a myriad of reasons behind this: a drop in legal immigration, an increase in deportations, a drop in the birth rate, and more. Now, far be it from me to discuss a political topic as toxic as immigration at this moment.2 But this data shows a problem that’s getting worse in certain regions, specifically the Northeast.

If you dig deeper into recent Census data3, you can see how the above charts contribute to a larger labor problem. Since December 2024, the labor force (the number of people available to work) has increased by just under 3 million people, but the labor participation rate (the percentage of that force actually choosing to work) has dropped by 0.1 percent. So the number of people available to work nationally has increased by less than 1 percent in the last year, which is incredibly small by historic standards. And data from Cal Matters shows that in August 2025, there were 1.4 million fewer legal immigrants living in the United States than in January 2025. That was months ago, and we can safely assume that number has only grown since then. That shrinks the labor pool even further.

If you look at the data by state, and how it’s changed between December 2024 and November 2025, 16 states had a drop in total labor force. Of those 16, 14 were located in regions outside the South. And there was only a single Northeast state that saw its labor force increase by more than one percent during this timeframe: Delaware, a state known nationally for its pro-business and pro-resident policies.

In layman terms, all of this data means a few things: first, the U.S. is not organically producing many new workers. Second, the labor supply growth is coming from people moving around the country, not births or immigration. Third, and most importantly, the people that are moving around the country are generally moving to one region – the South. Unless your business is located in Florida, Texas, or any of those other states, you’re likely having more trouble hiring than you did a few years ago.

This doesn’t create a national labor story. Rather, it creates a regional hiring asymmetry that can make it feel like you’re doing something wrong as a small business leader. But that’s not necessarily true. Here’s the landscape in 2026: a Fortune 500 company can relocate employees, sponsor visas, hire remotely, open satellite offices, and rely less on regional labor rates. Small businesses are tied to physical geography in a way that large businesses are often not. When population flows shift, small businesses get hit the hardest. And as more workers have gone remote in recent years, they’ve likely moved to lower-cost states knowing that they can continue to keep the job they have.

This is one of the reasons why, despite the strong economic data that comes out of the government, it can often feel like your region or town is struggling. The data supports that. Economic data is often national, but the small business reality is usually local. So the next time you feel like you’re doing something wrong when it comes to hiring, sure, take a look at your policies, your starting salary, your employee benefits, and any other hiring strategy you utilize.

But if all of that is in order, remember that hiring difficulty is not always a signal of competence. Sometimes, it’s simply a strategic constraint, especially when the demographics are against you.

Subscribe now

The administration’s tariffs were based on a law called the International Emergency Economic Powers Act, or IEEPA, as it’s now known. The law states that the president, after identifying an “unusual and extraordinary threat,” may, among other acts, “regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest.”

Perfectly clear, right?

The government’s argument to the court was that because of the words “regulate” and “importation,” the Executive Branch can issue tariffs under this law, because tariffs are a type of regulation.

Chief Justice Roberts and five of his colleagues read that argument and essentially said: no. Roberts’ opinion boiled down to four points:

1. The administration’s argument is based on the words “regulate” and “importation,” which are separated by 16 other words in IEEPA. “Those words,” Roberts wrote, “Cannot bear such weight.”

2. Article I, Section 8 of the Constitution specifies that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.” The founders assigned the taxing power to Congress – not the executive branch.

3. At no point in our nation’s history has Congress ever subtly intonated that an executive power included unilaterally imposing a tax. Any time the Congress has ever wanted to give a taxing power to the president, they have done so explicitly within a law.

4. The government’s argument was based on the word “regulate,” but when pressed by the Court, they could not identify a single case in United States history where the word “regulate” allowed taxes to be put into place, without the express written consent of the Congress.

During oral arguments, the government admitted that “the president does not have any inherent authority to impose tariffs during peacetime.” And since we’re not at war with every nation around the world, that pretty much sealed the deal.

Subscribe now

Now that this issue is settled, what next? Well, the biggest unanswered question is what happens to all of the tariffs already paid under IEEPA by millions of companies and citizens across the country? According to Customs and Border Patrol, the current estimate is that $179 billion in total receipts have been collected for IEEPA tariffs. And naturally, everyone that contributed to that now wants their money back2. The Court’s opinion conspicuously did not touch this issue, and in fairness, that question was not put in front of the Court. The only issue they were asked about was whether the tariffs themselves were legal.

More than likely, what will happen now (if it hasn’t already) is that hordes of companies will file suit against the government to get their money back. If money was collected under a statute later deemed illegal, restitution would logically follow. We can expect that these cases will eventually be joined together, and also end up in the Supreme Court one day, likely a few years from now. That’s right, we’re all likely going to be waiting quite a while to see if any of us get our money back.

But let’s assume, just for argument’s sake, that the government will eventually be required to refund all of the IEEPA tariffs. There are many questions that arise.

First, how will the money be returned? Is each company going to be required to petition CBP for a refund? Or will it be required to be done by the Customs broker who filed the entry summary in the first place? Is it going to be on a per-entry basis or in aggregate?

Another question that arises in my mind is what happens to all of that money, once it’s returned? Most tariffs are paid by corporations. Whether that money ever flows back to consumers is a different question entirely. A company like Walmart? There is almost no way that they return the money back to their consumers. More than likely, companies will simply pocket this refund.

Now, that raises its own questions in kind. First, what happens to the U.S. economy when $179 billion of cash is suddenly added into companies’ coffers? That number sounds enormous, but in macroeconomic terms, it’s not. The stock market (meaning the value of all public companies) is about $70 trillion. The United States’ annual GDP is about $31.5 trillion. The amount of IEEPA tariffs that have been paid amounts to 0.2% of the total stock market value and 0.5% of annual GDP. Not trivial, but way less than you might expect. And the stock market number doesn’t even count every small business that has paid tariffs over the last year.

Estimates have put the cost of tariffs for each family at between $400 and $1700. If families get refunds, will they spend it or pay down record household debt?

And what about prices that have been hiked because of the increase in costs? Some companies may certainly choose to lower their pricing, but you and I both know that most companies will just pocket the money, knowing that consumers have generally accepted (albeit unhappily) new pricing. But does this mean that, when supplier or raw material prices increase in 2026, they will then absorb that pricing, since they’re looking at an increased margin from the tariff refunds? The range of outcomes runs from short-term deflation to lower inflation over the next few years. Consumers would want the former, but economists would want the latter.3

Basically, this decision does not really answer the “what now” question. In fact, shortly after the announcement, we also saw President Trump announce a new round of 10% global tariffs based on a different law, which the administration claims allows the president to do so temporarily for 150 days. That’s five more months of essentially the same tariffs, which likely will also be challenged in court. In other words, as one legal theory collapses, another takes its place.

So what do you do now, if you’re a small business owner? Especially if you’re one who has been directly or indirectly affected by tariffs? Well, my (non-legal and non-binding) suggestion would be: nothing. There is too much unresolved to justify major strategic shifts. Rather, keep paying attention to any court cases that arise from this ruling, but don’t make big changes to your business until there is more certainty moving forward. Don’t overreact to incomplete information.

Lastly, and most importantly, a quick reminder to anyone viewing this decision through a partisan lens. After the opinion was released, some political leaders quickly framed the decision as good or bad for the country. The Supreme Court’s job is not to weigh economic consequences. That’s the job of the Congress and the President4. The Supreme Court’s job is to interpret statutory and constitutional authority.

The law has been clarified, but the money has not. Whether $179 billion returns to companies, stays in government coffers, or gets tied up in litigation for years will shape the real economic impact of this decision. For now, the only certainty is uncertainty. And for small businesses, that means discipline matters more than reaction.

The Court answered the constitutional question. The economic one is just getting started.

I’ve admired the Disney business for as long as I can remember.1 If you invested in Disney stock back in 1962, when it traded for about six cents per share, you would have multiplied your money by nearly 1900 times by the end of 2025. The company today is worth about $200 billion and is a conglomerate larger than Walt Disney would ever have imagined back when he was drawing an odd-looking rabbit and mouse.2

What’s most impressive about Disney to me, though, is how relatable its design is for a small business, despite its size. Disney’s biggest strength lies in its resilience and its operating system. The company’s segments operate like spokes on a wheel, with the center being its intellectual property – its studios, movies, and content. In short, its characters. Think about any part of Disney: the parks, the cruises, the merchandise, the licensing. All of it is based off of the creative side of the company. Disney’s core business is creating stories and characters. Without that, the rest of the company falls apart.

That’s why, over the last few decades, Disney has aggressively pursued acquisitions that give it access to popular IP. Here is a small selection of the companies Disney owns: Pixar, Lucasfilm, 20th Century Fox, Marvel, Searchlight Pictures, ESPN/ABC, Hulu, FuboTV, FX/National Geographic, and half of A&E (which also owns History Channel and Lifetime). That means Disney owns, in addition to all of the characters it’s created in the last 100 years, every Marvel character, every Star Wars character, every Simpsons character, a huge chunk of the global sports content, and more. These acquisitions, while pricey, expanded its core offering and allowed it to further expand the rest of its business segments using this new IP. Disney found a recipe for success and they use it over and over again.

Most importantly, this focus gives it the type of resilience that Coca-Cola and Pepsi have. Disney has survived many bumpy parts of its history, including leadership changes, strategic reversals, capex mistakes, and more. But it’s built to survive these things. It can absorb mistakes and errors, so long as they continue to focus on their core business.

Subscribe now

This has become an issue multiple times throughout the company’s long history. After Walt Disney’s death, the company’s creativity struggled mightily. In fact, if you scroll through a list of the Disney movies from 1971 to 1988, you’d be hard-pressed to find any that you really remember. Similarly, in the early 2000s, after the musical animation boom of the 90s, Disney Animation couldn’t keep pace. Almost all of the successful Disney movies of this era were made by Pixar, which hadn’t yet been acquired by the entertainment giant.

And when Bob Iger relinquished the CEO role in 2020, his successor, Bob Chapek, made plenty of mistakes, but none worse than trying to restructure the management tree of the core business – media and entertainment. The uproar among the careerists at Disney was deafening, and within two years he had been fired by the board. When Iger replaced Chapek for his second stint as CEO, he handed creative control back to Disney’s creators.

As an investor, you could be excused for getting impatient with Disney’s stock market performance. It has lagged that of the greater market every year since 2021. But that’s exactly why I think it’s a great company to follow as a small business owner. Wall Street likes clean stories, margin expansions, and short-term clarity. But Disney lives in the long cycle. They live in the world of capital expenditures that take years to pan out. They live in the world of delayed gratification. As long as they continue to create great IP and great stories, I trust that the financial success of their company will follow along shortly thereafter.

As small business leaders, we can’t match Disney’s scale. But we can learn from their priorities.

Disney works because no single failure can take the whole system down. That’s not about scale, it’s about design. The best companies’ successes don’t hinge on one small area. It should be diverse enough that a small failure, a poor decision, or a single setback doesn’t bring the entire thing down.

Disney consistently chooses decisions that keep the institution intact, even when they don’t look optimal in the short-term. The strongest businesses make decisions based on what’s best for the long-term health of the company. Weaker companies chase sales and profit in a way that is unsustainable.

Disney found a formula that works, and keeps using it repeatedly. That’s the sign of a smart business model. That doesn’t mean they can’t make adjustments. But you should never veer away from a successful formula just because you think you’re supposed to.

Most importantly, Disney rarely loses its focus on the core business. Disney knows it struggles when its creative minds can’t keep pace. In any business, no matter how much you expand and no matter how much you diversify, you should ask yourself every day if the core business is healthy. Without it, everything downstream suffers.

One other lesson that you can take directly from Disney parks: experiences matter. I don’t mean from a grand perspective – none of us are going to be setting off nightly fireworks shows for our customers. But the next time you happen to be in a Disney park, take some time and focus on the design and operational efficiency. Look at the sightlines – you only ever see exactly what Disney wants you to see from that spot. Look at the ground – you rarely ever see a piece of trash, yet you also rarely notice a janitor walking around. Look at the lines – you spend half of your time in them, but you’re also rarely bored. Look at the way the design influences traffic flow – Disney wants people to move in a certain way, and builds accordingly.

None of us are building theme parks or cruise ships. But we all, as small business leaders, create an experience for our customers, especially if you are in a retail setting. For example, is your physical setup one that flows traffic in an ideal way? Do you present items in a way that shows your customers exactly what they should see at that moment? Does your checkout line have impulse buys or distractions in case someone is waiting a while?

The key lesson from Disney is to focus on the little things. They often matter more. Their strengths are copyable even at the smallest levels. To follow them is to follow a posture and resilience model that has endured for over 100 years.

First and foremost, I don’t like clickbait, and just about everyone writing about AI is only interested in jumping on a bandwagon. There are way too many articles that are either “AI is destroying our country” or “AI is the greatest thing ever invented,” neither of which is helpful. And I don’t like just doing the popular thing. I tend to be pretty disagreeable in the face of a popular consensus.1

Second, and more importantly, I didn’t feel like I actually had anything useful to contribute to the larger AI conversation. And I tend to abide by the mantra of “‘Tis better to remain silent and be thought a fool than to open your mouth and remove all doubt.” I have no plans to pretend the complexities of AI are my strong suit.

It’s been written ad nauseum that the economic data doesn’t match the popular consensus. The charts and graphs seem to show the economy is strong, but the average household is still struggling. Both things can technically be true.

The most-cited strength of the economy the last few years is the stock market. Since 2023, the annual returns for the S&P 500 have been 24.2%, 23.3%, and 16.4%. Those are astronomical numbers, way above the historical average. And since 2020, there has only been one year in which the market was down. If you invested on January 1, 2020, you would have more than doubled your money by the end of 2025. That’s quite a profit for a five-year period.

But when you dig deeper into the market gains of the last few years, it’s generally been concentrated in just seven companies: Nvidia, Alphabet (Google), Apple, Meta (Facebook), Microsoft, Amazon, and Tesla. These stocks, referred to as the Magnificent Seven, or Mag7, accounted for nearly 37% of the entire S&P 500’s market capitalization, and about 31% of the entire U.S. stock market at the end of 2025. The Mag7 also accounted for 42.5% of the S&P 500’s total 2025 return. Meanwhile, the market’s equal weight index (which treats each stock the same, regardless of its size), returned just 9.34% in 2025, underperforming the broader market by six points, and the Mag7 by an enormous amount. In layman’s terms, this means these seven stocks propped up the rest of the stock market with them. In fact, Nvidia alone made up nearly 8% of the entire stock market at the end of 2025.

Technology isn’t my expertise – business is. So the more I started seeing trends in the economy over the last few months, and in particular the disparity between the Mag7 and the rest of the market, the deeper the AI earworm kept digging into my brain. As anyone who has been a consistent reader would expect, my next step was to do some research. According to AI Invest, in the three-year period from June 30, 2022 to 2025, the weighted S&P 500 (which weighs each company based on market capitalization) returned approximately 70.9%, while the equal-weight S&P 500 (which assigns each company an equal weight of .2% of the index) returned 49.4%, highlighting the disparity in returns. “As a result,” they write, “Investors have been heavily concentrated in a subset of…technology firms, all of which are now competing in the AI space, increasing the overall risk of the market.”

Subscribe now

Now, this is where you would expect me to go into a soliloquy about a market bubble, how it’s all about to collapse, and compare it to the dot-com bubble of the early 2000s. But to be honest, I don’t see the same risk. Yes, the dot-com bubble saw companies skyrocket in value because they said the word “Internet,” and we’re starting to see companies use the term “AI” in their quarterly earnings calls way more than ever before, even when it doesn’t apply. And there are certainly companies that are massively overvalued at the moment because of this – that much is inarguable.

But the companies at the top of this list are all profitable, and six of the seven are massively profitable. Over the trailing 12 months, here are the profits each of those six companies reported on their public financials:

Nvidia: $99 billion

Apple: $112 billion

Alphabet: $124 billion

Microsoft: $105 billion

Amazon: $76.5 billion

Meta: $58.5 billion

And here are their free cash flow (a more accurate depiction of their financial strength):

Nvidia: $77 billion

Apple: $123 billion

Alphabet: $73.5 billion

Microsoft: $77 billion

Amazon: $10.5 billion

Meta: $46 billion

These companies’ stock prices may be riding a high, but they’re not at risk of going anywhere or falling at the pop of the proverbial bubble. If Apple wants to spend over $100 billion per year on capital expenditures related to AI, I can disagree with the decision without thinking it’s going to turn the company from a success to a failure. Put it in numbers closer to our comprehension as mere mortals: if you sold your business for $10 million, and told me you wanted to buy a $250,000 Ferrari, I would tell you it’s irresponsible, but I wouldn’t worry about an impending bankruptcy.2 That’s not to say the market can’t crash from being overvalued, but these companies themselves are highly unlikely to go anywhere even if the bubble bursts. Their core, profitable businesses will generally be unaffected.

The Wall Street Journal reports that Meta, Alphabet, Amazon, and Microsoft are actively spending nearly $120 billion per quarter on capital expenditures, most of it building AI data centers.

And while we can all discuss and disagree about the worthiness of these expenditures, this is real money actually being spent. These are construction jobs, maintenance jobs, and ongoing investments in the country’s technological infrastructure. Five, ten years down the line, we will see if it was the correct investment, but for the time being, I don’t necessarily see how this is any different than other industrial revolutions that we’ve gone through as a society. If this is the direction we’re heading, then I would rather have companies invest in it early on so that we do it properly. We’ve still got areas of the country that don’t have reliable Internet, 25 years after the dot-com boom. I think it’s reasonable to suggest that we didn’t properly invest in the technology back then – perhaps we can make up for it this time around.

But here’s where the risk lies for those of us that don’t live in the world of big business and technology: most businesses, and especially small businesses, do not participate in the mechanisms creating these numbers. Whether or not over-investing in AI is the correct move, those companies not involved in AI are living in a different economic reality.

Harvard Economist Jason Furman reported that investment in information processing equipment and software was responsible for 92% of H1 GDP in 2025. Without these technology-related categories, GDP growth for that six-month period would have been just 0.1%. And according to CNBC, “A September 2025 analysis from Deutsche Bank argued that without AI-related investment, the US economy might already be in a recession.”

I recently wrote about how small businesses are getting left behind in the current economy. I can put an addendum onto that piece by saying, small businesses and those businesses not involved in AI feel like they’re getting left behind in the current economy. There are now two economies: the asset/capex economy, and the cash-flow economy. Small businesses live in the cash flow economy, but that’s not where the growth is.

The companies driving AI-related growth benefit from everything currently driving economic growth. And their multi-billion-dollar investments show up immediately in GDP, employment numbers, and market indices. Small businesses, on the other hand, don’t issue stock. They don’t borrow against soaring equity values. They don’t spend half of their company’s worth on infrastructure and patiently wait for annual returns. They live on cash flow, margin, and whether this month’s sales cover payroll.

The risk isn’t that AI-driven growth is fake – it’s real. The risk is that this growth convinces people the economy is healthier than it is, which delays the reckoning for those living outside the AI economy. For those of us that live in the cash-flow economy, it’s crucial to not use asset-economy signals to judge yourself and your business. By severing the ties between these two realities, you’re less likely to feel like you’re falling behind, and more likely to understand that you exist in a different economy than the one most news outlets write about.

We all have to make business decisions based on our places in our own economy. Everyone should learn about, utilize, and leverage whatever part of AI can help within their own business, while continuing to reap any benefits that advancing technology provides. But always keep in mind the economic realities of your own space, rather than just reading the big-picture numbers without the proper context. Because a chart without context is just decoration.

Real leadership happens in stages. It happens over a long period of time. It’s something that shows in action, rather than a few inspirational words. It takes years to fully develop a leadership style and have people recognize and respond to it. Sometimes it happens intentionally, sometimes it happens accidentally.

When I want to learn more about leadership, I tend to go to look toward some of the best leaders in corporate history. The obvious example is Warren Buffett, the long-time (and now former) CEO of Berkshire Hathaway. Buffett’s annual shareholder letters were legendary. He always had a tidbit or two about management, leadership, and decision-making that stuck with me. I read his letters religiously each year when the company released it. One of his best lines is, “You only find out who is swimming naked when the tide goes out.” Meaning, when times are good, everyone seems brilliant. It’s only when times are bad that you truly know who has it under control.

Subscribe now

One of Buffett’s most brilliant leadership moves was in how he structured the Berkshire corporate office. Their website lists 68 subsidiaries it fully owns, but it is believed that over 80 companies are currently owned by Berkshire, including GEICO, Benjamin Moore, Sees Candies, Duracell, and more. That doesn’t even count the enormous percentage of some public companies Berkshire owns as well, including 27% of Kraft-Heinz, 21% of American Express, 9% of Coca-Cola, and more.

It’s believed that Berkshire employs nearly 400,000 people across its entire web of operations. Yet, only a couple dozen employees staff their corporate headquarters in Nebraska. This is a company that oversees over $400 billion of annual revenue. It’s the 13th-most valuable company in the world at the moment. And they have just over 20 staff members overseeing it.

Why do they do this? According to Buffett, because it makes micromanaging nearly impossible. It’s difficult enough to micromanage one company – trust me, I’ve watched it happen many times throughout my career. But to micromanage scores of companies, some of whom are doing over a billion dollars of annual revenue? That’s just nuts. Buffett’s mantra is to hire good people and trust them. And he ensures the alternative is impossible by keeping the headcount to a bare minimum. At first glance, one would think that takes some hefty cojones. But after thinking it through, it makes perfect sense. Why would you hire someone if you are just going to second-guess their decisions?

Another executive that I’m fond of is JPMorgan Chase CEO Jamie Dimon. He’s led the world’s largest bank since 2005, an enormous reign in an industry where leadership turns over much more often than 20-plus years. Forgetting how successful his own company is, world leaders and economists look to him for guidance. He was even rumored to be in the running for U.S. Treasury Secretary or the chairman of the Federal Reserve, before he made it clear he wasn’t interested. In an era where high-powered financial world leaders are usually lambasted, Dimon has the respect of nearly everyone.

And it’s not an accident. I’m convinced the reason is because of his patience and his humility. He understands that he doesn’t know everything. He doesn’t try to convince anyone he does. And he shows legitimate interest in learning not just from those around him, but from people many rungs beneath him.

In a recent interview with Fortune, he said, “There’s a humility about learning. Every day, if I need to know something, I have to call you up to find out. I’m not an expert in everything that takes place in the company. If you get arrogant, complacent, a lack of curiosity, you’ll kill the company.”

But more importantly, his actions speak louder than his words. One of the tidbits I learned over the last few years is that Dimon and his executive team go on an annual bus tour to visit a bunch of Chase branches in a region of the country. And it’s not just for show. Sure, it starts as a giant pep rally to get everyone excited. But afterward, he sits down with everyday employees to find out what the company can do better. He wants to see them in action, how they work, to get ideas for improvement.

In a Wall Street Journal feature covering the 2025 tour, he explained that the first time they did this, they returned to headquarters with “over 1,000 things to fix. I’m not kidding.” Leadership may happen from the top, but it has to start from the bottom. You can’t lead without knowing what needs to be done. And you know what needs to be done by learning from people at every rung of the ladder, especially those on the front lines.

Now, in the same Fortune interview, Dimon also joked, “Management is a lot of fun, except for two things…customers and employees.” And while I certainly identify with that mantra1, the reason he can joke about that is because his customers and employees know that he truly cares about them. They know he takes the time to learn from them. They know he relies on them to make the company better, that he can’t do it himself. And they know that he will do everything in his power to make improvements to the company they devote their time to.

Dimon and Buffett didn’t create their aura in a day, a month, or even a year. They did it over the course of many years of putting in the work, often quietly, in order to achieve their company goals. And people see that work. You don’t need to tell them you’re doing it or advertise the fact. Actions speak louder than words, but those actions need to occur consistently and over a long period of time.

Most of us will never write an annual shareholder’s letter or go on an annual bus tour throughout America. So how does this scale down for those of us in small businesses? First, by recognizing the obvious: leadership often feels unsatisfying because it often looks like you’re doing nothing special. Leadership isn’t developed with big displays of bravado. It’s done with baby steps that are sometimes imperceptible to anyone else – even yourself. But if you’re doing it properly, one day someone around you will think, “Huh, how did we get here?” and realize the effect you had on the direction of the company. That’s how loyalty is built: you show people the way, and give them the space to follow.

And Buffett is right: great leadership is recognized only after the tide goes out. Dimon was a lifeline for the entire economy, let alone his own company, during the 2008 financial crisis. He held everything steady and continued to grow in the face of massive roadblocks. I recall a few times during my career when things were rough, and everyone in our building knew it. It was those times where I often gathered segments of my staff, or even the entire company, to make sure everyone’s concerns were heard. Were we on the right track? Was the rough patch something we just had to wait out, or did it require significant decision-making or evolution? Just asking these questions and listening to what people have to say helps make them know you’re working on their behalf.

Because of pop culture, we often cling to illusions of leadership that resemble dramatic episodes. Whether it’s a single decision that comes to mind with a shout of “eureka!” or a verbal brow-beating to get someone to do what’s necessary, many people believe in these fictitious ways of getting to the top. But that’s simply untrue. My most important moments of leadership generally occurred within the quiet of my own office, or even amidst something I chose not to do. That’s why leadership often feels unsatisfying in the moment. You rarely feel it working until months or years later.

So why does it feel like something’s still off? Talk to anyone on Main Street, be it consumer or small business, and people aren’t feeling too hot. The economy of the last few years has had a plethora of headwinds – inflation and tariffs among the biggest. Larger businesses have hung on just fine. Smaller businesses, on the other hand, are another story.

My grand theory recently has been this: small businesses are falling so far behind the rest of the economy that they are no longer the natural engine of growth in the United States. But since small businesses don’t publicly report their financials, it was nearly impossible to support that hypothesis. That is, until recently.

ADP, one of the largest payroll firms in the country, released their monthly employment report and there was a chart that stopped me in my tracks:

These three lines are the change in jobs in the last 12 months. And they show that mid-size and large companies are growing their employment, but among small businesses, defined as those under 50 employees, employment is plummeting.

I delved deeper into their report and it’s as bad as the chart suggests: in November, small businesses cut 120,000 jobs. And private employers (regardless of size) cut 32,000 jobs. Mid-size and larger companies had cumulative job growth of 90,000. That means that almost the entirety of recent job growth has been in large, public companies.

I’m always skeptical of an outlier. So I went directly into the government’s data to see if I could find anything different. And I couldn’t.

The BLS Quarterly Census of Employment and Wages shows that just over 40 percent of jobs are in companies with under 50 employees, a multi-point drop from the historical average. That means over the past few years, the share of jobs that are held by small businesses has decreased significantly relative to its larger peers.

For the life of me, I can’t figure out why this report didn’t get more attention. In my mind, the report should have come with giant red flags and a blaring siren. This is not some niche, marginal group struggling: it’s a core pillar of the U.S. economy, of the labor market.

Subscribe now

It’s one thing if the entire economy is weak. If the jobs report is bad all around, or inflation is high, or GDP has stalled. That’s actually easier to explain: economic weakness affects everyone. But this data suggests something far more dangerous: the smallest businesses are losing, while the larger businesses are winning. The economy isn’t generally zero-sum – there’s enough money in the U.S. economy for everyone to succeed. This isn’t a case of all businesses slowing down or being more cautious: this is active divergence based on the size of a company.

Let’s lay out some of the economic indicators that the government and media use to explain the strength of the economy:

GDP has risen each year. Nominal and real wage growth is up each year. But look at the stock market: in a three-year span, it’s returned a total of nearly 85%.1 That’s only happened one other time since the 1990s.

But here’s the thing: small businesses live in the GDP and wage growth reality. The return of the stock market has little to no effect on those companies, even if they’re invested. Larger companies can leverage that stock market growth in the form of higher pay packages and more valuable stock options/bonuses. They can borrow against their rising equity to help finance their growing costs. Small companies have to rely solely on cash flow. We can’t ask our shareholders or our bank for more money because the value of our company is up. In the small business world, you’re either making money or you’re not.

What has been acknowledged publicly are the skyrocketing fixed costs of running a business. Since 2023, commercial liability insurance is up about 15% on average. Utilities are up more. Payroll costs are up the same amount. Software costs are up around 20%. Employer-sponsored healthcare plans have increased about 25% on average.2

Amidst these rising costs, as well as general inflation that has peskily stuck around since 2021, small businesses can’t keep up. Larger companies can squeeze suppliers or even absorb margin hits. Small businesses generally have to say “yes sir, may I have another.” Larger companies can hire into uncertainty. They can hire and fire at will. If they get into a bind, they can cut some jobs or issue another corporate bond. Small companies can’t miss payroll even once. Small companies can’t pump revenue up in the same way larger companies can. Fixed costs go up regardless of your revenue – that’s the nature of the cost being fixed in the first place. And when fixed costs rise this much, this fast, it’s nearly impossible for revenue growth to match it.

Now, there’s no data that suggests small businesses are closing at any greater rate than businesses of any other size. But it means that the game is changing. It means the definition of success is changing. Growth at all costs is rarely a strategy that works for small businesses in the best of times. It certainly won’t work when the deck is stacked against you.

So, if small businesses are cutting jobs, but still remaining in business, it suggests one of two things: first, that business is down everywhere. I don’t buy that, because again, the data doesn’t support it. The second option is that small business leaders are opting out of scale. They’re choosing not to hire people when they might have otherwise. They’re choosing not to replace an employee that leaves or retires. They’re choosing not to take on more risk. If your fixed costs are up that much more than your revenue, you have no choice but to skimp on your variable costs. That means decreasing payroll, lower-margin products and services, building upgrades, software upgrades, and anything else that can be pushed off another year. Small businesses are opting out of growth because growth has become too expensive.

If you’re in the small business world, you’ve probably heard people complain that it takes way more work to do the same amount of business. There are a variety of reasons behind that: business ownership has gotten way more complex in the last decades; increased regulations have made compliance much harder and more costly; and some owners are simply taking on more tasks themselves to avoid having to expend cash hiring an extra person or two.

I’m not looking to be a Debbie-Downer. In fact, I don’t think this is even an existential risk to small businesses: most family-run companies can adjust to a changing landscape accordingly and survive just fine. This data isn’t suggesting that small businesses are collapsing. Rather, it shows that they are showing quiet restraint and simply acknowledging that the rules have changed. There is a widening gap between Main Street and corporate America, and small business owners know there’s pretty much nothing they can do to change that.

Perhaps we just need to reanalyze what we consider success for a small business. There are pundits every day who declare the American Dream dead, but that’s clickbait. The American Dream is alive and well, though the route to get there certainly has some detours. Just because small businesses don’t seem as successful when we use the same metrics we’ve always used, doesn’t mean we suddenly won’t have small businesses. But we do need to begin adjusting how we view their role in the modern economy, especially if we want to ensure that they’re indeed here in the future.

Unfortunately, I don’t have a solution. I don’t have some inspirational words or a magical fix. There isn’t a policy tweak or a productivity hack that closes this gap. The forces that drive this change are structural to our economy. I would argue that being a small business owner has never been harder than it is now. And business is supposed to be hard. No reasonable person ever asked for it to be easy.

But we’re entering new territory now. We’re in a society where the public as a whole seems to be okay with small businesses being left behind. Everyone says they want to support small businesses, but when they have to tighten their purse strings, they understandably migrate to Walmarts, Amazons, and Costcos. I don’t blame them – I would do the exact same thing. No one looks out for you better than yourself.

The danger isn’t that Main Street disappears. Rather, it’s that we keep pretending we can continue to succeed using the old playbook. The danger is in doing the same thing we’ve always done, and expecting the same result. Times have changed, and sometimes you can do everything correctly, and still fall behind.

Whether this shift is a long-term problem or simply a rational evolution of a global economic superpower is yet to be seen. We’ve lived through major economic transformations before – the industrial revolution, the dot-com era, and now the rise of artificial intelligence. And we’ve always come out the other side. But each of those major shifts in society still produced long, uncomfortable periods where entire groups got left behind.

Small business owners aren’t suddenly less capable or less driven. Rather, they’re responding rationally to an environment that now rewards scale, capital access, and risk absorption in ways they simply can’t match. The real risk isn’t that small businesses disappear; it’s that we continue to judge them by outdated measures, expect them to control the things they can’t control, and fail to recognize that sometimes the smartest move in a changed system is not to grow at all.

Just about everyone starts off working for what we can call “survival income” – making enough money to put food on your table, support your family, maybe buy a house, or any other typical financial goal. That can quickly morph into “status income,” when suddenly you want a larger house, or you want fancier decor, or luxury vacations. At the far end of the spectrum, it can even become “identity income,” where your earnings become indistinguishable from your sense of self-worth.

Don’t get me wrong, there is nothing wrong with wanting to achieve immense financial success and reward yourself accordingly. But some people continue chasing success long after the chase stops making sense. It starts with “I just need enough to pay off my credit card debt,” but can end with “If I don’t have that yacht, will anyone truly love me?”

Okay, I went a bit off the deep end. But you get my point.

We aren’t built to recognize the exact moment when “more” stops being useful. In his best-selling book The Psychology of Money, Morgan Housel discusses what he describes as “the relentless pursuit of more.” The research shows that it often results in “irrational behavior, causing us to…make choices that conflict with our values.”

You see this occur regularly in business, especially in small business leadership. Leaders and owners burn out not because a business fails – it happens when you discover success hasn’t fixed all of the problems you thought it would. I’ve written endlessly about the fallacy of money equalling happiness (https://www.mainstreetmind.com/p/employees-say-theyre-motivated-by). Things can be going great, but you’re still dragging yourself out of bed each day, mustering up the energy to go through the motions yet again. You say to yourself, “I just need to do this one more year,” but then five years later, nothing has changed. As leaders, we tell ourselves it’s responsible – noble, even – to keep pushing. In reality, we may be hanging onto something long gone – a past version of ourselves, a passion that used to exist but has long disappeared, or anything of the ilk.

Subscribe now

The Catch-22 is that a business, by its nature, always wants more. Everyone around you expects you to grow each year – your employees, your customers, and your vendors. If you’re not growing, you’re contracting. If you’re not evolving, you’re falling behind. How would you appear to those who look to you for leadership if you said, “Eh, this year we’re just going to ride it out and see what happens,” and put your feet up? No ethical leader could do that in good conscience.

Housel also delves into how the fear of the unknown affects people’s financial behavior. “An uncertain future drives many to seek more money than they might ever need,” he says. “This relentless accumulation often comes at the cost of time, relationships, and peace of mind.” And those items are priceless – you literally cannot put a monetary value on them. Time, freedom, reputation, happiness, social and familial relationships: all of these are some of the key factors in one’s life satisfaction, and no amount of money can buy them. Yet, all of them suffer when you pursue additional financial success above all else.

You could argue that freedom is something you can indeed “buy” with money – generally freedom only comes once you have enough in life to not worry about where your next paycheck is coming from. But how many people out there have plenty, yet cannot seem to make the decision to take that freedom? We all know people like that – financially secure on paper, terrified in practice. They’re terrified of not working, terrified of losing the identity that is linked with their career, terrified of the unknown. So I would argue that freedom isn’t something money can buy; it’s something you need to be willing and ready to claim once you’re able.

There’s an old story, likely apocryphal, but eye-opening nonetheless. The late Kurt Vonnegut goes to a billionaire’s party on Shelter Island with author Joseph Heller. Vonnegut tells Heller that their host, a hedge fund manager, makes more money in a single day than Heller did from the sales of Catch-22.

“Yes,” Heller replies, “And I’ve got something he can never have.”

“What on earth could that be, Joe?”

“The knowledge that I’ve got enough.”

A quick caveat: the definition of “enough” is very personal. It is different for everyone, depending on their income level, financial situation, or stage of life. But when I talk about “enough,” I’m not talking about a mega-mansion with a luxury car in the driveway. I’m talking about the moment in which your life stops being dictated by fear. That fear could be the fear of failure, the fear of the future, or the fear of ending one chapter and beginning the next one. Whether we’re willing to admit it or not, most of us know that feeling well in advance.

If you do have enough, then what are you still working for? Is it because you’re still passionate about your work? Or is it because you don’t know what else to do? Is it because you wake up each day energized about the day to come? Or is it because you’re scared of the alternative?

I’m not one for New Year’s resolutions, but I do like using the turning of the calendar as an opportunity to reflect. As we head into the new year, ask yourself these questions. Be sure that the reasons behind your continued hard work still make sense.

Enough is something that we often don’t think about amidst the day-to-day stressors of life and work. But it’s something we should all spend a bit more time focusing on.

Enough isn’t a number. Enough is a decision.

Hockey is a game played with five skaters on the ice for each team, plus a goalie. That’s 12 total players at any given time. However, a team has the option to “pull the goalie,” meaning the goalie skates to the bench, and a sixth skater jumps on the ice. While that leaves the net empty and open for the opposing team to score, it also gives the team with six skaters a man-advantage, and a higher chance to score. It’s a high risk, high reward strategy, usually utilized at the end of a game when a team is desperate to score.

The idea of this is that, if you’re losing by one goal, you need to make a really hard push and do anything possible to tie the game. Whether you lose by one goal, two goals, or ten goals, it’s still a loss. You don’t get additional points in the standings depending on your winning margin. So, as backwards as it might seem, late in a one- or two- goal game, teams would historically heighten the chance of conceding a goal in order to raise the odds of scoring a goal themselves. It’s why the last minute or two of a one-goal hockey game is often incredibly exciting. Everyone is pulling out all the stops, on both teams.

Subscribe now

The problem with this is that, for decades, hockey coaches would only pull their goalies in the last minute of a game, and no earlier. There are a variety of reasons for this: perhaps a coach trusts their team may be able to tie the game without the extra skater. Maybe the coach doesn’t think the extra skater gives their team that much of a better chance to tie the game. More likely, however, is that subconsciously coaches are terrified of the perception of what could happen if they pull their goalie too soon. While it’s technically true that losing 3-2 or 10-2 is the same thing, no one wants to be on the losing end of a blowout. Especially in a career where job security is minimal, coaches don’t want to stand out for poor decision-making. Instead, it’s better to take the safer route, perhaps give up one empty net goal, and move on to fight another day.

But over the last 15 years, there has been a push in hockey (as in all sports) to utilize data and analytics for better decision making. One of the strategies that kept being pushed by analytic nerds was that coaches should be pulling the goalie much earlier than they had historically. Unsurprisingly, most coaches (hockey being an old-school sport amidst an old boys club) rejected this data.

Then, in 2018, an unpublished paper by Clifford Asness and Aaron Brown made the rounds in the hockey world. They dove deep into the data and found that, on average, coaches pulled their goalie about three minutes too late when down a goal. They found that if a team was down one goal, the ideal time to pull their goalie is with just over four minutes left in the game. If they were down two goals, they should pull the goalie with 13 minutes left in the game. Down four goals, the data shows the goalie should be pulled the entire game.

Their data showed that, on average, a team is more likely to score a goal than concede a goal with the goalie pulled. So, while you may lose a bunch of games with this strategy, you’re more likely to win in the long-term. In fact, the researchers found that utilizing this strategy would earn an average team four more points per season. That may not seem like a lot over an 82-game season, but this past season four points would have been enough for two teams to make the playoffs that ultimately didn’t. In the 2023-24 season, it would have been enough for three teams. That is the difference of millions of dollars of revenue, perhaps another year or two of job security for a coach or player, and increased happiness of the fan base.

Even so, it took teams many years after this research to actually change the way they did things. Now, teams certainly are willing to pull their goalie much earlier – not quite with four minutes left, but definitely earlier than they used to. Hockey is a conservative, slow moving business – it takes a long time for people to change their habits. But in the meantime, dozens of players, coaches, and general managers likely lost their jobs because of their inability to change their habits. “This is the way we’ve always done it.”

This trap is something that has not only bothered me for my entire career, but is also one I’ve found myself falling into as I get older. It’s incredibly easy to just stick to the status quo, since change is often so complex, especially in business. When I was younger, I would push back against these “ways”, because I wasn’t a part of the decisions in how we did those processes. Nearly 15 years later, there are processes that I put in place that may need changing. And I certainly find that it’s much harder to change something that I’ve implemented than it is to change something that someone else implemented.

Yet, this is how a business stagnates. As business leaders, our job is to always keep growing, to always keep improving. Just because we made a process more efficient last year, doesn’t mean we can’t continue improving it this year. Just because we spent money on a solution a few years back doesn’t mean there isn’t a better option (which also costs money) right now.

There are endless examples of this in the sporting world, including how baseball uses their pitchers; how football coaches choose whether or not to “go for it” on fourth down; how soccer players take or defend against penalties. There are also a plethora of examples that you can find just by diving into your business’s operations. Most of us aren’t in denial about what processes or strategies we use that are outdated. It’s simply that we often don’t want to make an adjustment, because something new and unknown is terrifying. It’s the principle of “the devil you know.”

This is the part where I usually try to give advice or suggestions on how to avoid falling into some trap. But to be honest, this is one that is incredibly difficult to do. There’s no secret recipe for getting past “the way we’ve always done it.” More often than not, you simply need to step to the edge of the cliff and just jump. There’s no way around it. Especially for larger changes, it can be terrifying and anxiety-inducing. But if you want to progress, improve, and continue growing — not just in business, but also personally — you often have no other option.

Pull the goalie.

A trolley is going down a set of tracks. It’s heading in a direction that will run over five people currently on the tracks. However, you can pull the lever and force the trolley to the other track, where just one person is standing. Do you pull the lever?

This is one of the oldest philosophical thought-pieces. Essentially, it’s asking if you’re willing to let five people die by doing nothing, or cause one person to die by pulling the lever. Most people say they have no problem pulling the lever, because they see it as saving four lives.

But if you make the example more realistic, you can throw a wrench into the thought process. Say you’re a doctor, facing five patients who will die if they don’t get transplants by the end of the day. And you have a single patient with all of the needed organs. Are you willing to kill the one patient in order to harvest the organs and save the other five? Or are you comfortable doing nothing and letting the five patients perish?

There are all varieties of the trolley problem, some more ridiculous than others. But the bottom line is that it forces us to come face-to-face with the issue of omission vs. commission.

Omission means you fail to do something right by not doing anything. Commission is when you make a decision, but you do it incorrectly. Omission is passive; commission is active. Here are a few examples:

Commission: a doctor prescribes medication that the patient turns out to be allergic to – the patient dies.

Omission: a doctor takes no action when faced with a patient’s symptoms - the patient dies.

Commission: a witness lies under oath in order to put someone behind bars. The defendant is found guilty.

Omission: a potential witness fails to offer exonerating evidence. The defendant is found guilty.

Commission: telling a lie.

Omission: withholding the truth.

Commission: bullying someone.

Omission: watching someone else get bullied.

Subscribe now

There are countless examples of this through all walks of life. And some of the fun in these mental exercises is seeing what variables you can add to the equation. You can try a wacky version of the trolley problem here.

In general, the human brain is wired to commit sins of omission, rather than sins of commission. We do not want to actively harm anyone else. Oftentimes, that becomes irrational. Other times, it’s right.

Look at the entire medical profession. The Hippocratic Oath says, “First do no harm.” It doesn’t say “Do good.” It doesn’t say “Heal sick patients.” First and foremost, we’ve been taught, do not harm another person. And that’s fantastic advice, when your career involves life or death decisions, or when the fate of another human is potentially in your hands.

But in business, most decisions we make are not life or death. In fact, I can’t remember any time I’ve made a decision that had those types of consequences. Almost every decision we make is ultimately financial, even the difficult decision to lay someone off.1 Yet, in business, missing out on a great opportunity is viewed as less problematic than taking a risk and failing. I’d like to say this is perplexing, but it’s not. This is how our brains are wired. Be risk-averse, be safe, “first do no harm.”

When we engage in “omission” as business leaders, we’re essentially saying that we’re afraid of failure or error. That’s perfectly rational – no one wants to fail. No one wants to make a mistake or make the wrong decision. But as a business leader, those around you are relying on your decision-making abilities. You end up in your role because you have to be able to make those difficult decisions. Frankly, if you couldn’t, you likely wouldn’t be in your position anymore.2

I’m certainly a victim to the omission vs. commission bias on a regular basis. No one likes change, no one likes risk, and no one likes the chance of failure. But I often think back to the riskiest business decision we’ve ever made as a family, one that I was at the forefront of. Years ago, we had the opportunity to acquire a company that would help us vertically integrate within our industry. It was a larger financial risk than we had ever committed to, and we were terrified. Our company has always been conservative and fairly risk-averse. This was not one of those moments.

The safe thing to do would be to carry on with the status-quo. But we had done an incredible amount of analysis, as did the professionals we hired, and we saw exactly what the financial benefit was going to be over the course of the next ten years. Even with those numbers slapping us in the face, we still were afraid to pull the trigger. I honestly can’t remember, this many years later, what finally convinced us to okay the deal. But I’m assuming it was our family collectively saying something to the effect of, “F**k it”.

As it turns out, it was perhaps the smartest business decision we’ve ever made. Our analysis was spot on, and 13 years later we’re still reaping the benefits. That doesn’t mean that any risky decision is worth making. But it means that, if you’ve done all of your homework, all of your research, and have triple-checked yourself, it’s irrational not to do something that will benefit your business.

We have certainly failed at many things. And though it doesn’t feel like it at the time, years later no one remembers those failures, including yourself. Many leaders are more comfortable doing nothing than something, because if you do nothing and fail, you are less likely to be criticized. If you do something and fail at it, you are more likely to be criticized for making a bad choice. But that thought process will inhibit growth in your business. Do your homework, look at the pros and cons, and make a decision based on what will be best for you and your business. Pull the lever. Even if it’s a little terrifying.

There is a tendency among people who aren’t used to having power (or people that are incredibly insecure) to try and show off their power in the most obscene ways possible. Telling people how powerful you are, and even utilizing that power, is not effective, especially if you want to craft the perception of a strong leader. If you run a company, everyone in the company inherently knows that you can fire people. So what good does it do to remind those around you regularly that you have this ability? It might work once, but after you utilize that strategy a few more times, you’re just a vindictive jerk.

Instead, the best show of power is not to use it – especially when people know that you could.

Let’s dive into the sports world for a great example. With the new hockey season among us, this situation came up a few times as some very large contracts were signed between teams and their superstars. It made me double down on this opinion that power is best utilized when it is not utilized at all.

In the last few weeks, two NHL superstars signed enormous contracts to stay with their existing teams. A brief background for those who don’t follow hockey: the league has a salary cap, and the most a player can make is 20 percent of the cap, which for this coming season is just over $19 million. No player has ever signed for 20 percent of the cap ever since it was implemented in 2005. The highest-paid player for the 2024-25 season made just $14 million.1

So, it was pretty shocking when Kirill Kaprizov, the Minnesota Wild’s top player and one of the best players in the world, reportedly rejected a contract extension that would pay him $16 million per season. Fans and media debated whether that meant Kaprizov wanted to leave Minnesota, or if he just wanted to be paid more. That argument was settled days later, when he signed an eight-year extension worth $17 million per season, the largest salary in NHL history (and by far the largest salary in the post-2005 cap era). Kaprizov had the power to name his price – and he did, bending Minnesota’s management over a barrel, since their option was essentially: pay up or lose the type of player that you may not come across for another generation.

That contract then jump-started another discussion, this one about Edmonton Oilers superstar Connor McDavid, generally agreed to be the best player in the world and perhaps one of the best to ever play the game. Entering the last year of his current contract, he has been eligible to sign an extension since July 1, yet had not done so. People were clamoring over how much money he would ask for. The discussion was pretty much identical across the hockey world: McDavid could ask for 20 percent of the cap – the maximum salary – and Edmonton would have no choice but to pay it. No one wants to risk losing a player of his caliber. The only question was, what salary would he demand?

Everyone knew that McDavid, at that moment, was the most powerful person in the hockey world. He could literally name his price. So what did he do?

He asked the Oilers for no raise at all. Just a few days ago, he signed a two-year contract extension that pays him $12.5 million per season, the same salary he has made since 2018. McDavid will be the fifth-highest paid player in the NHL next year – and the second-highest paid player on his own team.

And what was the general reaction from the hockey world? Pretty much wonder and amazement. It was no secret that he could have demanded $19 million and received it with no argument. Yet, he chose to keep his salary the same. Now, we mortals can argue about whether or not there is a legitimate difference between making $12.5 million and making $19 million – rich is rich. But in a cutthroat world – the sports business world – most people don’t look to be “nice.” They want to win, they want to max out their earnings, and they want to be the best.

Take a similar example from a year ago. Sidney Crosby, the 38-year-old captain of the Pittsburgh Penguins, was in negotiations for a small contract extension to get him to the end of his illustrious career. That career includes: three Stanley Cups, Olympic Gold Medals, perhaps the best player of his generation, and arguably one of the top five players of all-time. So what did he demand in this new contract?

$8.7 million per year over two years.

That’s it. He also could have asked for the moon and received it. Instead, he kept his pay at the same rate it’s been since 2008, when he was 21 years old. This season, Crosby will be the 46th-highest paid player in the league. It’s wild to think there are even five players who would be more desired this season, let alone 45. Yet, Crosby didn’t feel the need to demand the max.

Just like McDavid, Crosby had the power to name his price. And he essentially chose not to. McDavid didn’t need to take the max. Everyone already knew he could. Players may choose to take a lower salary for a multitude of reasons, but chief among them is to give their team the ability to use that excess money to sign other good players. A sport with a hard salary cap is a zero-sum game – every dollar given to one person is a dollar less you have to give to someone else. McDavid and Crosby are telling their bosses, their teammates, and their fans that they want to use their power for the benefit of their team, rather than for their own personal gain.

The supply of superstar hockey players is light, which generally makes the demand high, which makes the pay rate high. But Kaprizov chose to follow that economic curve, while McDavid and Crosby chose to parlay their power in a different way. Don’t get me wrong – any player has the right to demand a market rate for their services. I harbor no feelings of ill-will toward Kaprizov. He wanted to max out his pay, and he has earned the right to do that.

But after the dust has settled on these deals, the ones that hockey fans and media continue to be in awe of are those that Crosby and McDavid signed. Everyone agrees: they had the power, and chose not to utilize it. In a way, that makes them even more powerful – the fact that the entire world, including their employers, understands this.

This same dynamic plays out in the business world each day. Leaders who constantly remind everyone they’re in charge may command obedience, but they don’t command loyalty or respect. Those who hold power, but choose not to yield it, command both.

There’s a quote from House of Cards that I always remembered in business. I’m paraphrasing here, but it’s when the main character is talking about courage. He says that anyone can run their mouth and yell and scream. But what takes real courage is keeping your mouth shut, holding it together when the stakes are high. I often think about that. Sometimes, even when you want to tell someone off or get in someone’s face, the more powerful thing to do is say nothing.

I find the same with power, especially when you’re in a position of business leadership. Everyone knows you have power, just by the nature of your position. What makes the power even more awe-inspiring, is when you choose not to use it. In business, as in sports, the most powerful people are the ones who never have to remind you that they are.

Subscribe now

Our brains are wired to believe that our beliefs are correct, and also to be socially accepted by those around us. Being told no, or being told our idea is incorrect, threatens both of those. All of us, at some time, have witnessed a colleague react horrifically when they were told no, or when they were told they had to do something that they didn’t agree with. It’s not fun – but as a leader, we often have to make these hard decisions.

A way around this is to make people believe that your idea was actually theirs. This isn’t a matter of forcing your idea onto others. Rather, it’s a matter of getting someone to think the way you are, and seeing if they get to that same conclusion. If they don’t, then perhaps your idea wasn’t correct in the first place. But oftentimes, someone fails to agree with an idea because they’re only looking at it from their own perspective.

You know how the book is always better than the movie? There’s a psychological reason for that. When we read, our brains create. Our minds build the world that the book itself has presented, and we forever believe that our mental image is correct. When the movie comes out, we’re seeing a director’s mental image of that same book, and it rarely matches ours. It’s the ultimate form of confirmation bias – we have a belief that the book looks this way, and the movie is that way. When two ideas collide, the one in our own head wins.

Subscribe now

Which is why it’s so difficult when you want to suggest an idea, or try something new, and the person who has to actually implement it is putting up a roadblock. Their mental image of the situation is different from yours, so the pushback is not just natural – it’s what has helped us survive as a species over millennia.

Ultimately, you need to get someone thinking about a problem in the same way as you, so that they can get to the same place you did on their own. Here are a few tips of how to get there:

Use the Socratic method of questioning

Asking someone questions is a much better method than trying to convince them of something. If you tell someone “this is how it should be,” their first response will likely be defensiveness. If you ask open-ended questions, however, they are much more likely to ponder the situation and consider different options. It’s a typical tactic lawyers use every day. You also may want to start with the end goal and work backwards. Why aren’t we at that place right now? What are some options to try to fix that issue? Is there something we need to purchase to make it better? Do we have the solution here already? You know where you’re trying to get to at the end of the day – but you need your colleague to get there as well.

“Yes and”

While this is actually a technique used for improv comedy, there is plenty of research showing that the use of the word “and” instead of “but” makes life much easier. If your colleague expresses an opinion that you disagree with, don’t say “Yeah, but…”, as that will cause defensiveness from the other side. Tell them, “Yeah, and…” Your idea will still come across, but in a way that will lessen the chances of the other person closing off their mind to an alternative opinion. It shows you’ve heard them and are taking their opinion into account when presenting your own.

Know Your Audience

More than likely, you know your colleagues quite well, especially if you’ve worked with them for a long time. You know their strengths, weaknesses, personality flaws, and how they best operate. Utilize this knowledge to frame your argument in a way that will give you the best chance of success. If you know one of their biggest concerns is their workload, try to ask questions that help them see how the change will ultimately make their life easier in the long-term. If their concerns tend to be about making a wrong decision, ease their mind by reminding them that mistakes are how we learn and improve. Use your knowledge of them to your benefit, by framing issues in a way that they will care the most about.

Don’t take credit. Ever.

Being a business leader is not an ego-boosting activity. I’ve written about this ad nauseum, but it can never be said enough. As a business leader, you should care about only one thing: is it good for the company? If the answer is yes, then nothing else should matter. If your colleague’s “idea” is actually yours, you shouldn’t care about claiming credit for it. You should only care that it gets implemented. That internal satisfaction should be plenty. If you’re looking for external praise or external motivation, you should get out of business right away. As Winston Churchill once said, “Neither look for nor expect gratitude but rather get whatever comfort you can out of the belief that your effort is constructive in purpose.”

Perhaps the biggest key to this entire strategy is to make sure you’re not over-using it, or that you’re using it for miniscule issues. Utilizing this strategy to convince someone that they should take out the trash is a recipe for disaster. But if you’re looking to improve a larger part of the business with bigger ideas, especially if you want to try some different things to see how they work, I highly recommend making others think that they’re the ones who came up with the idea in the first place. Not only does it get them on board with what you are ultimately trying to achieve, but they end up much more enthusiastic and energetic upon implementation.

By that, of course, I mean your staff – everyone from management down to entry-level employees. Respect is like trust: it can take a lifetime to earn it, and just seconds to demolish it. And by the time you’ve been a business leader for some years, you learn quite quickly how long it can take to garner that respect.

In my experience, it was a very bumpy road in the years preceding when I took over. As the third generation in our family business, I was put in an awkward position, just as my father once was: I was suddenly put in charge of people that I had grown up with, many of them twice my age. They were working at their desks while I was a toddler running around the place.1 Now, I’m suddenly dictating what people are supposed to be doing in the jobs they have done forever.

I already had some experience with this from years earlier, when I first entered the business full-time, a point in which the only experience I had was listening to dinnertime conversations at home, as well as a few summers working in the building – hardly management material. Yet, at that time, I just assumed there would be a level of respect for a “member of the family.”

Turns out, I was quite wrong. I made the mistake of expecting respect, rather than figuring out how to earn that respect. The good news is, the building was already populated with people who truly cared about my family and the business, and over time we all found an excellent balance. Part of that meant I had to bide my time before suggesting or implementing major changes to the company. No one likes a young, rash kid who walks into a successful business and says, “we’re gonna do things differently!”

Now, nearly 15 years later, I’ve learned quite a lot about the best ways to garner respect. And the answer is quite simple:

You need to show your staff that you care – that it’s about more than just money.

It doesn’t take a genius to make numbers add up, put in some crazy sales policies, cut costs, and rake in the profit in the short-term. However, it is extremely difficult to run a successful, profitable business, while also showing how much you care about the company and the people that run it on your behalf. As NFL coach Marvin Lewis once said, “They don’t care what you know until they know that you care.”

How do you show them that you care? Here are a few ways that I find are extremely beneficial, and something that should come easy to any good business leader:

Know and share your motive

Make sure your staff knows why you do what you do. If you don’t have motivation, they certainly won’t. This also comes into play with basic business decisions. It’s common knowledge that the phrase “because I said so” can destroy years of great parenting. It’s the same thing in management. If you firmly believe in a decision you’ve made, explain it to your staff, especially if they’re skeptical. If you show your motivation, they will respect it, even if they disagree. As famed financial consultant Peter Drucker once said, “[Effective leaders] have authority only because they have the trust of the organization.”

Be honest

Honesty is by far the easiest item on this list. I remember one of my middle school teachers saying that if you’re going to lie, you better have a good memory.2 To me, there is no reason not to be honest, so long as the topic isn’t proprietary. That means, if someone wants to know specific financial figures from the business, I’ll politely decline. But I will certainly open up about why we do things a certain way, the risks we do or don’t take, and what we hope to achieve with certain decisions. Again, even if people disagree with an action you’ve taken, they will respect you if they believe they can trust you.

Put the company ahead of yourself

A mantra that I preach (and practice) regularly is, “It’s all about the company.” Meaning, everything we do is for the betterment of the company. Sometimes, that means saving money. Sometimes, that means spending money. Sometimes, that means making a decision that may not be good for you personally. Sometimes, that means changing an internal policy that irks people. A business is not a personal piggy bank – you need to show with your actions that the decisions you make are to help make the company, and therefore all of your employees, more successful. If it’s good for the company, then it’s good for you – even if it isn’t.

Lead by example

Especially when business is rough, you need to set the tone. A phrase I learned from writing about Ed Snider is “a fish stinks from the head.” You need to be the optimist so that the trait trickles down through the organization. And it’s not just about saying positive things. It’s about doing things that people view as a positive attempt to better the company. “Hope is more than the sunny view that everything will turn out all right,” said psychologist and author Daniel Goleman. “It is believing you have the will and the way to accomplish your goals.”

Give respect to get respect

If someone chooses to work for your company, that’s a big deal. They are telling you that they’re willing to put their livelihood in your hands. That’s a huge responsibility, and one that I never forget each day when I walk into our building. Furthermore, if someone chooses to continue working for your company year after year, it’s an immense sign of respect. Contrary to old-timey thinking, “a paycheck” is not a thank you for working. It’s the reason they work. I’ve written before about money not being the main motivator behind people’s day-to-day work. You need to give people additional, non-monetary respect to show that you care about them, especially if you want them to reciprocate.

Always be open to learning

I’ve written before about the best trait a leader can have. Part of having curiosity is showing a willingness to learn – or more importantly, admitting that you don’t always know the answer. Many people in your business will be smarter than you, both at specific tasks and in general. By putting your faith in them, asking questions, and bettering yourself, you show an immense amount of respect for them and their work. Contrary to popular belief, admitting you don’t know something isn’t a detriment to your persona. Rather, it’s both normal and humanizing.

Well, the simple answer is that it works. Despite our better judgment, our subconscious, irrational brains still want to see the smaller number. Our brain loves impulsive behavior and snap judgments, and it certainly loves seeing a small number on the left side of a price. This has been referred to as “left-digit bias.” It is the tendency of people to prefer the lowest possible number in the left-digit when looking at the cost of an item or service.

The “round number bias,” on the other hand, is the opposite: the preference, in certain scenarios, of people to prefer the round number to something just below. In their fascinating book, Scorecasting, Tobias Moskowitz and Jon Wertheim write about the round-number bias with regards to sports. When their book was published in 2012, they discussed some data that is almost unbelievable. A magic number for a baseball hitter is .300 – meaning they get a hit (or a double, triple, or home run) 30 percent of the time. That’s a historically large number: only the best of the best can hit the ball that efficiently over the course of a 162-game season. The authors realized, though, that while .300 hitters are rare, what’s even rarer are .299 hitters.

Subscribe now

If a player was hitting .299 going into the last game of the season, they always attempted to get a hit – many struck out and had their average drop a point, while others got that hit, raised their average to .300, and were promptly removed from the game to secure their final stat line. What was mind-blowing is that, in pursuing this line of questioning, the authors found that in the over 100 years that baseball has existed, there has never been a batter who, when sitting at a .299 average on the last day of the season, walked in their last at bat of the season. Why? Because if you walk, your average is not affected at all. It’s as if the at-bat never occurred. And no one wants to be the person who nearly hit .300. The value of being a .300 hitter, both financially and historically, is immense.

But again, just like with pricing in a supermarket, is there really a difference between a .299 hitter and a .300 hitter? Of course not. They are nearly identical, statistically. Yet, the idea of being just below the round number makes athletes behave more irrationally in order to attain that pointless goal.

There are tons of examples of these statistical mountaintops in sports: 50 goals in hockey, 1,000 rushing yards in football, the 40-40 club in baseball, triple-doubles in basketball – the list goes on and on. But again, is someone who scored 49 goals in the NHL less valuable than someone who scored 50? Is an NFL running back not worth it if they only got 999 rushing yards one season? The value is the same. The only difference is your perception of the value.

This happens all the time outside of sports as well. Studies show that a high school senior is more likely to retake the SATs if their score ends in “-90”. Meaning someone who got 1200 is likely going to be happier with their score than someone who got 1490. The 1490 student is “oh so close” to 1500. The 1200 student is filled with relief that their score was above that nice, round, threshold.

The value of a car drops significantly at 100,000 miles. But is it any older than a car with 99,000 miles on it? The 99,000-mile car is being overvalued, and the 100,000-mile car is being undervalued. The same thing happens in the stock market: many traders place limit orders at round numbers (e.g. $10.00 per share), which creates a liquidity pocket that smarter, algorithmic traders can use to exploit, knowing that there will be a batch of purchases or sales at certain thresholds. It happens in medicine, as well: patients who just turned 80 were 25 percent less likely to get a coronary bypass than those who were just a few weeks shy of 80. A few weeks difference in age is irrelevant, yet even doctors acted irrationally when it comes to a round number.

I distinctly remember, years ago, when shopping for my wife’s engagement ring, learning that a 1.00-carat diamond cost significantly more than a 0.99-carat diamond. I don’t remember the actual numbers, but let’s say the difference between 0.98 and 0.99 was tens of dollars – the difference between 0.99 and 1.00 was closer to a thousand. And as an analytical, math-loving adult, I did what any rational man would do – I bought the 1.00-carat ring because I was not going to live with that risk for the rest of my married life.1

You see what I mean, though? Even when we know the facts, and know that we are acting irrationally, we still can’t help ourselves. If you look deep enough, all of you will likely find examples of this in your own lives each week.

The question, as it always is, is how can we use this natural human bias to our benefit as business leaders? For one, you certainly are stuck pricing things at “-.99” for the rest of your days. Even once the penny is eliminated from circulation, the left-digit bias will still exist, thanks to electronic payments (and stores inevitably rounding up during cash payments).

But on the other side, if you know what types of assets are overvalued, that means you also know what is undervalued. For example, if you’re hiring someone for your business, and the market maintains that this position should require ten years of experience, don’t stick to your guns too hard. The person with nine years of experience is likely just as capable, but probably will not be heavily recruited by others in your industry. Not only are you likely getting someone that costs less, but you will also get someone who is more devoted to your willingness to give them a chance. If you’re hiring at a place that requires a certain GPA, know that 3.0 students are overvalued and 2.9 students are undervalued. Go for the person who gives you the same performance but costs you less.

The same thing with asset purchases. If you’re looking to buy something for your business – let’s say a new printer – don’t be fooled by the round number. If Printer A advertises itself as being able to print 50 pages per minute, and Printer B advertises as 48 pages per minute, Printer B is likely significantly cheaper, but will achieve almost identical performance.

Lastly, if you set goals for yourself as a company, don’t be so blinded by the round number that you act irrationally in order to attain it. If you set a sales goal of $10,000 per month, and you’re on pace to finish at $9,500, it’s more damaging to do something stupid to get that last $500 than it is to simply say, “Ah, we were close. Let’s see what we can improve next month to finally cross that threshold.”

Our brains are wired to see patterns and desire round numbers. Put more simply, our brains are wired to act irrationally. Unlike most biases, simply being aware of the round number bias’s existence doesn’t help you overcome it. More likely, you’ll need to actually talk yourself off a ledge – do I really need the truck that has 49,900 miles? Or can I save a few thousand dollars and get the one with 51,000 miles on it?

By focusing on the implicit value of a product, service, or a person, instead of looking at a number and jumping to judgment, we can avoid making costly mistakes and overpaying for things that, at the end of the day, would not give us any additional benefit.