Decision Making: Lemon Method

There are certain decisions you make that have risk built in to them. The decision might deal with your exposure and liability in a situation, what thing to invest your money in, or how to best move your business forward.

Decision Making Made Easy

This method helps you quickly analyze and make decisions easily. Business is about mitigating your downside as much as possible. You want to make the situation a win, win whenever possible. So for each negative in a situation give yourself a lemon. You can deal with one lemon. Even two lemons are manageable. But, three lemons, no person is that good at managing that many variables. 
 
Here’s an example:

Situation- You are in Bogota, Colombia and want to go out at night and party.

Lemon 1- Bogota is in the top 10 most deadly cities. At least 5 people are killed there every night.

Lemon 2- You don’t speak Spanish, know the area, or you are out late at night.

Lemon 3- You are drunk.

Analysis

A very bad decision. Don’t do it. If you are sober you’d make a smarter decision and not hail a taxi on the street. If you spoke Spanish you would get more help from locals. If you were in a first world country and not Colombia you could accept the other two lemons and be fine.

This is a real life example too. Have you heard of the million dollar cab ride? In Colombia a taxi driver will pick you up and then stop somewhere, picking up his three closest friends. They will beat you and stop at every ATM in town, withdrawing all of your money and maxing all your cash advances. Then they will kill you and dump your body somewhere. No lie. Google it. The most high profile example of this was a few years ago when a U.S. DEA agent was killed in Bogota.

More recently, a local man was robbed using the same method. He was out partying late (lemon 1), drinking (lemon 2), and in Bogota (lemon 3).

Or, here’s an example related to business on how to use lemons to your advantage:

Situation- You want to start an airline, but are unsure of investing so much upfront.

Lemon 1- Planes are expensive.

Solution- Negotiate to return the planes within the first six months and receive your money back

Lemon 2- Finding customers in an entrenched industry already dominated by massive corporations

Solution- Design your airline unlike any other airline. Maybe brand yourself as hip. Music? Drinks? Style?

This situation is oversimplified, of course, but the example does address two of the main issues facing Richard Branson when he wanted to start Virgin Air. He understood his lemons, found creative solutions to turn them in to assets, and built a very successful airline.

Remember, something bad is going to happen if you have three lemons. Don’t have three lemons. Or, if you have lemons, put some sugar on them.

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