Give informed estimates
When providing estimates, explain their basis—whether from expert input, surveys, or past data—to convey confidence without overstating certainty.
THE IDEA
2. Give informed estimates
Matthew Leitch is a British consultant who used to work on risk management for PricewaterhouseCoopers. On his website Working in Uncertainty, he describes what he’s learned about commanding respect while communicating uncertainty to clients. One lesson: Give informed estimates and explain where they came from. For example, he might tell a client, “There’s no hard data to rely on for this so I’ve taken the average estimate from three senior marketing managers,” or “A survey of 120 companies similar to ours showed that 23 percent had experienced an incident of this type.”
Even if reality is messy and it’s impossible to know the right answer with confidence, you can at least be confident in your analysis. A venture capitalist described one of the best pitches he’s ever seen, from a young entrepreneur named Mike Baker:
Mike diagnosed the online advertising industry so thoughtfully and painted a vision for where it was heading that was grounded in his own experience and a lot of data . . . He was so articulate in describing, “If I’m right, this is going to be unbelievably valuable. I might be wrong, and that’s the risk, but if I’m right, I can execute on it, I know this technology, and I have the right partners lined up to take advantage of it.”
Showing that you’re well-informed and well prepared on a given topic doesn’t require you to overstate how much certainty is possible on that topic. Venture capitalist John Doerr said that he wanted to invest in Amazon just based on seeing Jeff Bezos “bounding down the steps,” but of course that’s not the full story. He was also impressed with Bezos’s technical proficiency. When he asked about Amazon’s volume of daily transactions, and Bezos was able to pull up the answer with a few keystrokes, Doerr “swooned.”
When to use it
Presenting a business plan to investors: clearly state the data behind your revenue projections and the assumptions you’re making.
Communicating project timelines to a client: explain that the timeline is based on similar past projects and expert judgment, not on hard guarantees.
Assessing risk in a new market: cite surveys or expert panels to show you’ve done your homework, even if exact numbers are unknown.
Giving a performance review: provide specific examples and data points, and acknowledge where you’re drawing from subjective impressions.
FROM THEORY TO EVERYDAY LIFE
In practice
Matthew Leitch's consulting approach
When estimating risk for a client, Leitch states, 'There’s no hard data to rely on for this so I’ve taken the average estimate from three senior marketing managers,' or 'A survey of 120 companies similar to ours showed that 23 percent had experienced an incident of this type.'
Mike Baker's venture capital pitch
Mike Baker impressed a venture capitalist by grounding his vision in experience and data, and by clearly articulating the upside and the risk: 'If I’m right, this is going to be unbelievably valuable. I might be wrong, and that’s the risk.'
A MOMENT TO REFLECT
Put it to work.
In your next presentation, ask yourself: Have I explained the source of my estimates? Am I distinguishing between what I know from data and what I assume?
When someone gives you an estimate, do you ask how they arrived at it? How could you model that questioning in your own work?
Think of a situation where you felt overconfident or underconfident. How would giving an informed estimate have changed the outcome?
CONTINUE THE CONVERSATION
Source texts
- The Scout Mindset (Julia Galef)