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Founders make dozens of decisions every week — who to hire, what to build next, which investor to take a call from. Most default to the same tool: a simple pros and cons list. Keith Rabois, an early PayPal and Square executive, says that tool is actually one of the worst ways to decide anything, and the alternative he learned from LinkedIn co-founder Reid Hoffman has shaped every decision he’s made since.
For founders inside the startup ecosystem in Canada, where time and resources are limited, the way you make decisions can matter just as much as the decisions themselves.
The Lesson: Why Pros and Cons Lists Fail
Rabois traces this lesson back to a single conversation in 2002 that changed how he approaches every decision:
“Reid has a very specific view of how to make decisions… Most people create pros and cons lists. But Reid was adamant that that was the worst possible way to make a decision. He trained me to never do that… So since this conversation in 2002, I have never done that. You will never find a notebook where I write down the pros and cons of any decision.”
That’s over two decades of consistently rejecting one of the most common decision-making tools used by founders, executives, and startup founders in Canada alike.
The Alternative: Strict Priority Ranking
Instead of weighing pros against cons, Hoffman’s approach is to strictly rank your priorities — whether for your life, your company, or a single decision — and let that ranking drive the outcome.
The process works like this: you make the decision based solely on your top priority. Only if there’s a genuine tie do you move to the second priority, and so on down the list. Rabois explains why this works better than a pros and cons list:
“The reason Reid’s model is so brilliant is because when you create a pros and cons list, you’re creating effectively — and visually — a false equivalence.”
The Problem with False Equivalence
The core flaw in a pros and cons list isn’t the information it captures — it’s how that information gets visually weighted. When your brain sees two pros lined up against three cons, it treats each item as roughly equal in importance, even when that’s far from true.
In reality, the reasons behind any decision tend to follow a power law: one factor is usually overwhelmingly important, while the rest are only marginally relevant. A pros and cons list flattens that hierarchy, making a minor factor look just as weighty as a major one — and that’s exactly when founders end up making the wrong call.
What This Means for Startup Founders in Canada
Applying a strict priority-ranking framework can sharpen decision-making at every stage of building a company. A few practical ways to put this into practice:
- Rank before you decide. Before evaluating any choice — a hire, a product direction, a fundraising term — write down your top three priorities in strict order, not as a flat list.
- Resist the urge to weigh everything equally. Not all factors deserve equal airtime. Identify the one priority that actually matters most and let it drive the decision.
- Use ties as your only escalation point. If your top priority doesn’t clearly favor one option, only then move to the next priority on your list.
- Apply it beyond the boardroom. This framework works as well for personal decisions and team priorities as it does for company strategy — useful for anyone navigating the founder network and the trade-offs that come with early-stage building.
Why This Matters for the Startup Ecosystem in Canada 🇨🇦
Decision-making frameworks like this one are especially valuable for founders operating with limited runway and resources, which is often the reality across the startup ecosystem in Canada. Clearer prioritization means faster, more confident decisions — and fewer resources wasted on factors that don’t actually move the needle.
Founders connected to a strong founder network also benefit from learning frameworks like this directly from people who’ve applied them at scale, rather than discovering them through trial and error.
Platforms like Startup Ecosystem Canada exist to help founders access this kind of operating knowledge early, so decisions get sharper as companies scale.
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