Jeff Bezos popularised a simple way of distinguishing between different types of business decisions.

He described them as one-way and two-way doors.

A two-way door is a decision you can walk through, examine and reverse if it does not work.

You may lose some time or money, but you can return through the door without causing significant or permanent damage.

Because the consequences are limited, these decisions can usually be made relatively quickly.

A one-way door is different.

Once you walk through it, returning is difficult, expensive or potentially impossible.

Those decisions deserve more time, better information and considerably greater care.

Bezos’s concern was that, as organisations became larger, they began treating too many decisions as one-way doors.

Everything required more information.

More meetings.

More approvals.

More certainty.

The result was that decisions that could have been made quickly became unnecessarily slow.

However, I see a different version of the problem inside growing founder-led businesses.

Under pressure to grow, they can start treating one-way doors as though they will be easy to reverse.

“We Can Always Change It Later”

A significant opportunity appears.

A new service seems to be attracting interest.

A large potential customer enters the pipeline.

A new market looks promising.

The founder wants to move quickly before the opportunity disappears.

So the business begins committing:

• Permanent employees are recruited
• Technology is purchased
• Supplier agreements are signed
• Additional premises are taken
• Marketing expenditure increases
• New management responsibilities are created
• Long-term pricing is agreed

Each commitment feels reversible when it is being made.

“We can always change it later.”

However, reversing it may mean:

• Making someone redundant
• Breaking a contract
• Writing off an investment
• Disappointing a customer
• Disrupting the existing team
• Damaging the company’s reputation
• Carrying costs for several months after the strategy has changed

The opportunity may have been a two-way door, but the infrastructure built around it has turned it into a one-way one.

The Opportunity Is Not the Commitment

Two questions are often confused: 

Is this opportunity worth exploring?

And: 

Are we ready to build permanent infrastructure around it?

The answer to the first can be yes without the answer to the second also being yes.

Imagine an agency believes there is demand for a new service.

Several customers have expressed interest.

The service is aligned with broader market trends.

The agency has relevant skills and believes it could become a meaningful source of future revenue.

That may be more than enough evidence to explore the opportunity.

But it may not yet be enough evidence to:

• Recruit a permanent service lead
• Build a new team
• Purchase expensive technology
• Commit to a major marketing launch
• Add significant fixed overhead
• Set an ambitious annual revenue target

The founder does not have to choose between ignoring the opportunity and committing fully to it.

There is another option.

The business could:

• Speak to existing customers in more detail
• Pre-sell the proposed service
• Agree two or three paid pilot projects
• Use contractor or ring-fenced internal capacity
• Test the proposed pricing
• Measure the actual delivery requirement
• Establish whether demand is repeatable
• Assess whether the service can operate without excessive founder involvement

These are largely two-way door decisions.

They allow the business to enter, learn and return if the evidence does not support further investment.

The ambition has not changed.

Only the sequence of commitment has.

Buy Evidence Before You Buy Infrastructure

Growth will always involve uncertainty.

No amount of research will tell you with complete accuracy how customers will behave, how long delivery will take or whether the expected contribution will be achieved.

However, there is a significant difference between uncertainty based on assumptions and uncertainty informed by real experience.

A customer saying they like an idea is useful. A customer agreeing to pay for it is considerably more useful.

A forecast showing an attractive margin is encouraging. A completed pilot demonstrating the actual delivery cost is much stronger evidence.

Believing that a service can be delegated is one thing. Seeing the team deliver it successfully without the founder is another.

Before the business buys permanent infrastructure, it should buy as much evidence as it reasonably can.

That evidence might come from:

• Customer commitments
• Deposits or advance payments
• Paid pilots
• Measured delivery time
• Tested pricing
• Actual gross contribution
• Repeat purchases
• Successful delegation

None provides complete certainty.

But each reduces the amount the business is being asked to believe without proof.

Use two-way doors to gather the evidence required before walking through a one-way door.

The Connection to the Growth Funding Gap

Last week, I introduced the idea of the Growth Funding Gap.

This is the maximum amount of cash the business must commit before the resulting customer cash begins to fund the investment.

One-way decisions often make that gap larger.

• A permanent employee creates a recurring salary commitment.
• A long-term software agreement creates fixed monthly payments.
• Additional premises create rent, deposits and operating costs.
• A large launch brings forward marketing expenditure.

Two-way decisions can help limit the initial exposure.

• A contractor may cost more per day, but can be engaged for a defined period.
• A pilot may initially be less efficient, but it can prove whether customers will pay.
• A shorter supplier agreement may have a higher monthly price, but it preserves the ability to change direction.

The decision is not simply about which option costs less when everything works. It is also about what each option costs if the original assumptions prove wrong.

Flexibility Is Not Free

There is normally a cost attached to keeping a decision reversible.

That can make the permanent commitment look financially more attractive.

If the demand is certain and sustained, the permanent option may well be cheaper. However, that is precisely what the business is still trying to establish.

The additional cost of the flexible option may be buying something valuable:

• Information
• Time
• Reduced exposure
• The ability to stop
• The ability to change the offer
• The ability to learn before committing further

The lowest initial unit cost does not always produce the lowest-risk decision.

When Should You Walk Through the One-Way Door?

Keeping every option permanently open is not a growth strategy either.

At some point, the business may need to recruit permanently, invest in systems, enter longer agreements and accept commitments that cannot be easily reversed.

The objective is not to avoid those doors.

It is to decide what evidence should be required before walking through them.

For the new agency service, that might mean:

• A defined number of paying customers
• A minimum level of secured revenue
• Proven gross contribution
• Evidence of repeat demand
• A delivery process that can be repeated
• A clear understanding of the required skills
• A manageable Growth Funding Gap
• Delivery that does not rely excessively on the founder

This is where The Nuvem9 becomes useful.

Secured demand, proven contribution, repeatable delivery and manageable cash exposure provide the evidence needed to decide whether the business is ready to move from a reversible test to a more permanent commitment.

The objective is not to wait until every measure is perfect.

It is to ensure that the size and permanence of the commitment increase alongside the strength of the evidence.

Which Door Are You About to Walk Through?

Think about one significant growth decision currently being considered inside your business.

Perhaps you are planning to:

• Recruit
• Launch a new service
• Accept a major customer
• Invest in technology
• Enter a new market
• Take additional premises

Then ask:

1. Is this currently a one-way or two-way door?
2. What would it cost to reverse the decision?
3. Can it be broken into smaller, more reversible steps?
4. What could we test before making the permanent commitment?
5. What evidence would justify walking through the one-way door?

The strongest growth decisions do not require the founder to choose between doing nothing and betting everything.

They create opportunities to learn along the way.

Final Thought

Growth eventually requires commitment.

You cannot build a meaningful business while keeping every option permanently open.

However, you do not have to begin by making the largest and least reversible commitment available.

Move quickly through the doors you can reopen.

Test the demand.

Prove the economics.

Understand the delivery.

Then become more deliberate as the doors become harder to reverse.

The strongest growth plan does not require you to be right all at once.

Next week, I will bring the September series together by looking at what happens after the decision has been made.

Because deciding to proceed is not the end of a growth decision.

You must also know what would make you accelerate, adjust or change the plan.

Which creates the final question:

What would make you change your mind?