The Outsider Test

THE OUTSIDER TEST

The first half of 1985 was a “grim and frustrating” time for the tech company Intel, according to its cofounder Andy Grove. Intel had been doing a booming business specializing in memory chips. But by 1984, its Japanese competitors had figured out how to make memory chips that worked faster and better than Intel’s.

As Intel executives watched Japan’s market share soar and their own plummet, they talked endlessly about what to do. They were getting destroyed in the memory-chip market. Should they try to move into another market? But memory was Intel’s identity. The thought of no longer being a “memory company” felt shocking, almost like the violation of a religious dogma.

In Grove’s memoir, Only the Paranoid Survive, he describes the conversation he had with his cofounder, Gordon Moore, that ended up saving the company:

Our mood was downbeat. I looked out the window at the Ferris wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon and I asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?”

Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why shouldn’t you and I walk out the door, come back and do it ourselves?”4

Once they had acknowledged the fact that abandoning their once-celebrated memory-chip business was, from an external perspective, the obvious choice, the decision was almost as good as made. That’s how Intel managed to rebound with vigor from its mid-eighties slump, shifting its focus from memory chips to what it’s most known for today: microprocessors.

The thought experiment Grove and Moore did is called an outsider test: Imagine someone else stepped into your shoes—what do you expect they would do in your situation? When you’re making a tough decision, the question of what to do can get tangled up with other, emotionally fraught questions like, “Is it my fault that I’m in this situation?” or “Are people going to judge me harshly if I change my mind?” The outsider test is designed to strip away those influences, leaving only your honest guess about the best way to handle a situation like the one you’re in.

In a twist on the outsider test, you can also imagine that you are the outsider. Suppose you have about two years of graduate school left, but you’re feeling increasingly unhappy about the field you’ve chosen. You’ve toyed with the possibility of quitting—but the thought that you might have wasted years of your life on this career track is so painful, you always find a reason to stick it out longer.

Try imagining that you’ve just magically teleported into the life of this person named [Your Name]. You have no attachment to their past decisions, no desire to look consistent or to prove them right. You just want to make the best of the situation you’ve suddenly found yourself in. It’s as if you’re hanging a sign around your neck: “Under New Management.”5 Now, which option do you feel more enthusiastic about: spending an additional two years in graduate school to finish [Your Name]’s degree, or quitting to do something else?*