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What if the secret to success—whether in business, relationships, or even cooking dinner—boils down to one skill: decision-making? Kevin Systrom, the co-founder of Instagram, believes that mastering the art of making optimal decisions under uncertainty is the key to unlocking a better life.
Photo: Facebook / Mark Zuckerberg
In this article, we’ll dive into Systrom’s philosophy on decision-making, explore how it applies to everyday life and business, and share practical tips to help you make smarter choices.
Why Decision-Making is the Ultimate Skill
Kevin Systrom, the visionary behind Instagram, has a surprising answer when asked about the most valuable knowledge area he’s focused on: “The best knowledge area that I spent time on was the idea of decision-making.”
For Systrom, decision-making isn’t just a business skill—it’s a life skill. From choosing where to eat with friends to managing a billion-dollar company, every decision involves weighing risks, rewards, and probabilities.
“How much risk am I taking, and what do I get paid to take that risk?” Systrom asks. This simple yet profound question is at the heart of his decision-making framework.
The Expected Value Framework
At the core of Systrom’s approach is the concept of expected value—a probability-weighted assessment of the potential outcomes of a decision. Here’s how it works:
Identify Possible Outcomes: What are the potential results of your decision?
Assign Probabilities: How likely is each outcome?
Calculate Value: What’s the value (positive or negative) of each outcome?
Make the Optimal Choice: Choose the path with the highest expected value.
Systrom emphasizes: “You always want to pick a path in life that maximizes your probability-weighted expected value.”
Real-World Examples: Expected Value in Action
Let’s break down how this framework applies to real-life scenarios:
Example 1: Cooking Dinner
Imagine you’re trying a new recipe for the first time. There’s a chance it could turn out amazing—or it could be a disaster.
Outcome 1: The dish is a hit (70% probability, +10 value).
Outcome 2: The dish is a flop (30% probability, -5 value).
Expected Value: (0.7 x 10) + (0.3 x -5) = 7 - 1.5 = +5.5
The positive expected value suggests it’s worth taking the risk!
Example 2: Launching a New Product
When Instagram launched Stories, Systrom and his team had to decide whether to take on Snapchat, a dominant player in the space.
Outcome 1: Stories succeed and attract millions of users (60% probability, +100 value).
Outcome 2: Stories fail and damage Instagram’s brand (40% probability, -50 value).
Expected Value: (0.6 x 100) + (0.4 x -50) = 60 - 20 = +40
The high expected value justified the risk—and the rest is history.
Why Most People Don’t Think This Way
Systrom notes that many people don’t naturally think in terms of expected value. Instead, they rely on intuition, emotions, or short-term thinking.
“I’ve noticed how many people don’t necessarily think like that,” he says. This gap is why he believes teaching decision-making fundamentals could be life-changing.
How to Apply Expected Value in Your Life
Ready to start making smarter decisions? Here’s how you can apply Systrom’s framework to your own life:
1. Break Down the Problem
Start by identifying the decision you need to make and the possible outcomes.
2. Assess Probabilities and Values
Estimate the likelihood of each outcome and assign a value based on its impact.
3. Calculate Expected Value
Multiply each outcome’s value by its probability and add them up.
4. Choose the Optimal Path
Go with the option that offers the highest expected value.
The Ripple Effect of Better Decisions
Mastering decision-making doesn’t just lead to better outcomes—it creates a ripple effect that improves every aspect of your life.
In Business: You’ll make smarter investments, allocate resources more effectively, and navigate uncertainty with confidence.
In Relationships: You’ll make choices that strengthen connections and avoid unnecessary conflicts.
In Everyday Life: You’ll feel more in control and less stressed, knowing that your decisions are grounded in logic and reason.
What Kevin Systrom Would Teach College Students
If Systrom had one hour to teach college students, he’d focus entirely on decision-making fundamentals.
“I would just spend an hour on the fundamentals of making decisions based on expected value,” he says. “That has changed my life.”
This simple yet powerful framework has the potential to transform how you approach challenges, seize opportunities, and create a life you love.
The Bottom Line: Master Decision-Making, Master Life
Kevin Systrom’s insights remind us that decision-making is more than just a skill—it’s a mindset. By embracing the expected value framework, you can make smarter choices, take calculated risks, and unlock your full potential.
So, the next time you’re faced with a tough decision, ask yourself: “What’s the expected value?” The answer might just change your life.
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