By Dan Brain, co-founder of MAD//Fest and MAD//Masters By Rory Sutherland.
Don’t worry, this post isn’t an advertorial for a new weird-tasting, fermented, probiotic drink making slightly suspicious claims about having magical gut health healing powers, and the secret source for both razor sharp mental performance and regular bowel movement (although my Instagram feed is clogged up with such like ads after a few Google searches).
But I am a passionate believer in trusting your gut – especially when it comes to business. And if, like me, you’ve made some of your best decisions based on a gut feeling, the good news is that there is solid science to back up this claim.
‘Just Do it’, Amazon Prime, iPhone – business history is full of examples where an intuitive leap led to fame, glory and category domination (you can read all about them in Richard Shotton’s excellent book, ‘Hacking the Human Mind’).
Sadly for my bank balance, MAD//Fest’s successes represent a mere drop in the ocean compared to these global behemoths. But here’s my schtick – we had absolutely no big data insights pointing to there being a gap in the market for MAD//Fest.
Precisely nobody was clamouring for our disruptive business model for events, partly because nobody had tried it. There was no evidence to say a lairy brand and offbeat tone in lieu of any significant marketing budget would serve us so well.
And when shit hit the fan with COVID, nobody could have foreseen that the slightly whacky decision to bring MAD//Fest London back in 2021 by hosting it in-person in a giant car park to comply with social distancing rules would lead to two years of triple digit growth. Although we’ve often lacked data, we have always had our intuition (and a healthy dose of luck and timing).
Definitions – Intuition vs. instinct
I use the word ‘intuition’ as opposed to ‘instinct’ quite deliberately. Although both are subconscious and can produce a gut feeling, there is a subtle difference. Instinctive decisions are useful, but they are immediate fight-or-flight calls that we innately make for survival. Covering your head during an explosion, for example.
I think intuition is slightly more useful in a business context. Intuition is cognitive and based on experience, rather than a biological reaction. Our intuition enables us to draw on complex subconscious information and make quick, calm decisions based on pattern recognition.
Why you should embrace heuristics and the rule of thumb
The concept of heuristics can help us to understand and use intuition to make those quick calls we often need to make whilst running a start-up or scale-up.
Closely related to intuition, heuristics are the ‘rules of thumb’ that help us to make mostly reliable decisions quickly. For example, if Andy and Justin from NDA asked if I fancy a pint in Soho before heading home, I’d make the quick calculation that they’re probably worth it and some good may come of an impromptu rendezvous.
It’s a decision that’s more likely to be right than wrong, but not completely without the risk of being left dribbling into a pint of Guinness at the Devonshire at 11pm having hopelessly missed the last train (we’re all fallible, even if it can land us in the doghouse).
Heuristics enable intuition and are both examples of System 1 thinking – fast, automatic and emotional, rather than slow and logical (System 2). Without intuitive creative leaps, it’s unlikely that many of the most iconic brands would exist today.
And in MAD//Fest’s example, aside from lacking the time and money, I doubt Bain or McKinsey would have been able to quickly produce a complex piece of research pointing to it being unequivocally a good idea to run MAD//Fest in a car park back in 2021 (something I’ll always credit as MAD//Fest’s most significant growth driver).
Whilst we often don’t have the data, I do trust our ability as individuals and a collective to make decent decisions based on intuition and past experience.
Time to call BS on data?
My bone of contention is that we, as an industry, seem to have spent the last 20 years – my entire working career – hell-bent on playing down our intuition whilst keeping up the pretence that we uphold the highest standards of data-driven decision making.
Most small media businesses don’t have huge data teams, we don’t have agencies crunching the numbers, and we don’t have time to make decisions slowly (after all, speed is one of the agile start-up’s great advantages).
But if we’re data-driven, then we’re more credible, so goes the rhetoric. If it all goes terribly wrong, we can cover our arses and play a ‘Get Out of Jail For Free’ card because we made the decision on hard data.
But does saying “we made a predictable and dumb decision based on historical data that on reflection didn’t feel right at the time” really cut the mustard? I’ve kicked myself when I’ve fallen into this trap in the past.
I’m sure lots of good businesses make many good decisions based on good data. You definitely should look at the data, you’d be silly not to.
But I hope I speak for the silent majority when I say “sure, we’ve got some useful data insights and they help us to paint half the picture, but I don’t have everything I need to make a solid decision quickly without the addition of gut feeling and intuition from previous experience”. FYI, 58% of respondents to a Harvard Business School study back in 2016 admitted to making more business decisions based on gut feeling than data, so at least I’m not going completely out on a limb here.
Our obsession with data and flawed metrics because they sound plausible, professional and rational has caused us to become risk averse, which is, in my opinion, risky business in itself. What’s been the result? More mediocrity, less creative thinking, increased risk of failing to notice seismic shifts, à la Kodak.
Could AI be the saviour of intuition?
Now you might be thinking that AI, with its ability to quickly analyse huge volumes of information and transform it into smart-sounding strategic insights and to deliver half decent creative at scale, is about to put the final nail in the coffin for gut feeling and human creativity?
The reality is more nuanced, according to behavioural science proponents Rory Sutherland and Richard Shotton, who I recently spent some time with filming the new MAD//Masters By Rory Sutherland course.
“I’m rather a fan of AI, in a way. For one thing, it may not raise the ceiling – but it certainly has the potential to raise the floor.
“And raising the floor is a very worthwhile activity. But, both metaphorically and practically, when you raise a floor you also need to raise the ceiling – and the job of raising the rafters will fall to creative people more than ever.
“There is a potentially bright future for those who allow imagination and intuition to drive innovation and to craft distinctive brands. If, that is, the culture and the budgets allow them free rein to do so.
“In the medium and long term I worry about those businesses whose main justification for AI is cost saving rather than value creation,” says Sutherland.
Shotton agrees, arguing that whilst AI can improve individual creativity, it is likely to make us sound alike: “In 2024, Oliver Hauser at Exeter University asked 293 people to write an eight-sentence story. Some had to write without any assistance. Others were given AI-generated ideas to get them started.
“When 600 judges rated the stories, AI appeared to help. The writing of those who had assistance was judged as more enjoyable and less dull. But something else happened.
“The more participants relied on AI, the more similar their stories became. Similarity increased to the tune of 9 -11%. As Hauser put it. AI led to an increase in individual creativity, but a loss of collective novelty.
“In other words, AI may help each of us sound better. But it risks making all of us sound the same.”
So used in the right way, AI can level the playing field. But it also has the potential to harm creative differentiation – especially when the motive is ‘creativity on the cheap’.
How can we make room for gut feeling?
As our take on AI becomes more nuanced, I’m sure a blended approach that combines data, AI and gut feeling will appeal to many folk (including myself). But how do you even begin to change a deep-set culture of data obsession and make space for those human-driven leaps that can be such an effective and valuable source of competitive advantage?
Here’s three things that could help:
- Lose the stigma, trust our human intelligence – we need to stop thinking about intuition and gut feeling as dirty words and reckless actions akin to drunkenly entering the casino at 3am and sticking your entire wedding fund on black.
We employ intelligent people who are close to their products, markets and customers. Have they not earned your trust to make the odd intuitive leap based on experience that might just unlock that magical source of competitive advantage?
- Experiment and measure – ironically, I sense that most companies have a lack of data to support the notion that robust data-driven decision making outperforms a faster-paced, intuitive approach.
Think about experiments you could set up. There’s no need to bet your house on intuition – start small, measure, build your confidence, and gauge your appetite for risk.
- Create open forums – I’m concerned that we are ok with outsourcing thinking to AI but seem petrified of using our intuition.
Set the culture and create forums away from the daily distractions. Allow people the freedom to pause for thought and put their intuition on the table – without fear of judgement. You might just strike gold!
Maybe embracing your gut will work for you, maybe it won’t, maybe the stakes are just too high or prohibited by regulation.
But I’m willing to bet that there are several plucky disruptive start-ups out there who are ready to rip up the rule book, roll the dice, and take on the status quo. And sooner or later, just like MAD//Fest, the odds are that one of them will get lucky.
