bet-sizing

Size product bets by separating reversible from irreversible decisions and shaping work to fit an appetite. Most product bets are Type 2 decisions — reversible, low-cost to try, high-cost to deliberate. Move fast on those. Save deliberation for Type 1 decisions that are hard to undo.

Type 1 vs Type 2 Decisions (Bezos)

Type 1 (Irreversible): One-way doors. Hard to undo once committed.

• Choosing a core technology/platform
• Pricing model changes that affect existing customers
• Killing a product line
• Public commitments (partnerships, integrations)

Type 2 (Reversible): Two-way doors. Easy to undo or iterate.

• Most new features (can ship, measure, remove)
• UI/UX changes (can A/B test or revert)
• Internal tooling decisions
• Most API additions (harder to remove, but additive is safer)

Rule: Use lightweight process for Type 2. Use deliberate process for Type 1. Most product teams over-process Type 2 decisions and under-process Type 1 decisions.

Shape Up Pitch Format

When proposing a bet, structure it as a Shape Up pitch:

1. Problem

A specific story showing real pain. Not an abstract need — a concrete situation with a real user.

"When a PM finishes a customer interview, they spend 45 minutes transcribing notes into a PRD. By the time they're done, the emotional context is gone and the PRD reads like a requirements list."

2. Appetite

How much time is this worth? Not how long it will take — how much you're willing to invest.

• Small bet: 1-2 weeks
• Medium bet: 3-4 weeks
• Large bet: 6 weeks (maximum for Shape Up)

If you can't fit the solution in the appetite, reshape or kill it.

3. Solution

Breadboard-level, not pixel-perfect. Show the key interactions and flows without getting into visual design. Fat-marker sketches, flow diagrams, or written walkthroughs.

4. Rabbit Holes

Known risks and unknowns that could blow up the timeline. For each: what's the risk and how will you mitigate it?

5. No-Gos

What's explicitly excluded. This is as important as what's included — it prevents scope creep during execution.

Expected Value Assessment

For larger bets, estimate expected value:

EV = (Upside x P(success)) - (Downside x P(failure)) + Learning Value

• Upside: Best-case outcome (metric improvement, revenue, users)
• P(success): Probability it works (be honest — most features have 30-50% success rate)
• Downside: Cost if it fails (time, opportunity cost, technical debt)
• Learning value: What you'll learn even if it fails. High learning value makes negative-EV bets worthwhile for early-stage products.

Guidelines

• CRITICAL: Classify every decision as Type 1 or Type 2 before deciding how much process to apply.
• NEVER spend 6 weeks deliberating a Type 2 decision. Ship it, measure it, adjust.
• NEVER rush a Type 1 decision because of artificial urgency. These are worth slowing down for.
• ALWAYS include No-Gos in a pitch. Without explicit exclusions, scope will grow.
• ALWAYS include Rabbit Holes. The risks you name are less dangerous than the ones you don't.
• NEVER pitch without a stated appetite. "Build this" without a time budget is an open invitation to over-engineer.

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Built on Shape Up (Basecamp) and Jeff Bezos's Type 1/Type 2 decision framework. Skills from productskills.