We often think that we have to make large #investments in one shot. We need to buy a #house, purchase a car, or change jobs. In #business, you may launch a product, buy another company, or build a plant.
However, this often involves a tremendous amount of uncertainty, and these investments might be difficult to recoup because of the transaction costs involved in these large purchases. Many of these purchases are irreversible.
Before you do one of these major decisions, consider testing the market to see what is going to go on. Look for ways that you can scale back that major purchase and try that alternative.
See if you actually benefit from that alternative.
For example, before moving to a large city, consider living there for a week or two. Before you get married, consider living together for a year. Before you purchase a house in a different neighborhood, consider renting a home in that neighborhood.
The goal is to gather information about whether you actually like this alternative.
See if the market actually cares, and you care about the market.
It’s often not clear about what you should do, but by testing alternatives, you often get a great deal of information that you could not do without that test.
Don’t be afraid to test the market with something that is rinky dinky. In fact, what you should be looking for is testing the market with rinky dinky. It’s the cheapest way to test and to actually get some #feedback.