Sunken Cost Bias

“Sunken cost bias” is fairly simple, it’s the idea that we tend to overvalue what we already have.

This can cloud our judgement, and blind us to new opportunities because those opportunites nullify our past actions.

There may be a great opportunity available to us, but because we have already spent so much time pursuing another opportunity we ignore it and tell ourselves what we are currently doing will eventually pan out.

This “refusal to backtrack” makes our life’s efforts appear more linear, but can really just be a bias we hold that upholds our past actions over future opportunity.

Although I first learned about sunken cost bias from business authors like Scott Adams and Greg McKeown, I can’t help but see this concept in scripture as well.

Here’s a possible example of overcoming sunken cost bias found in the gospel of John:

John 21

After fishing all day, Peter had docked the boat and put away the nets when Jesus told him to go back out and try again. After fishing all day and taking the time to put everything away, it was humbling to re-launch the boat and try again, but when he did “they were unable to haul the net in because of the large number of fish.”

Following God’s plan isn’t always clean and linear, but if we have the humility to overcome “sunken cost bias” we can embrace the new direction God has presented to us. God will recycle the “dead time” of the past and “use it for our good” as He promised us in Romans 8:28.

The image you see here is the logo for my failed start up “Bohemian Breakfast,” an e-commerce coffee store specializing in the “adventure lifestyle.”

After investing a lot of time and money getting it off the ground, along with touting it’s future success to all my friends I had a great deal of my own “sunken cost bias” when evaluating the viability of Bohemian Breakfast.

This made it difficult to see that I had started a high-maintnece, low-margin business, with a flawed business model.

It was humbling to admit defeat and shut down the BB, but if I hadn’t I would have never had the time to pursue my latest tech related venture.

Which already has 10x the traction of Bohemian Breakfast.

Sometimes the best decision in a situation is the one that makes your past actions look the stupidest.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s