Kevin Systrom’s Formula for Better Decisions

Instagram co-founder Kevin Systrom has a simple yet transformative approach to decision-making: focus on maximizing probability-weighted expected value. Whether it’s a small daily choice or a major business move, Systrom uses this mindset to weigh risk and reward effectively.

If he were to teach one class, Systrom says it would center entirely on mastering this principle—because too many people overlook the power of systematic decision-making. For entrepreneurs, adopting this method can make the difference between guessing and choosing with confidence.

1. Understand Expected Value

Expected value (EV) is the weighted average of all possible outcomes based on their probabilities. Systrom argues that making decisions with this framework ensures you're maximizing long-term results, even when outcomes are uncertain.

How to Apply It:

• List all possible outcomes of a decision.

• Assign probabilities to each one (realistically, not optimistically).

• Weigh the impact of each outcome by multiplying the probability by the payoff.

Why It Works: This method removes emotion from decisions and focuses on rational, data-driven choices.

2. Embrace Uncertainty as a Feature, Not a Flaw

Systrom believes uncertainty is unavoidable, but instead of fearing it, you can use EV to navigate it. When you evaluate decisions based on probabilities, you gain clarity even when the future isn’t certain.

How to Apply It:

• Start small: Use EV thinking for minor decisions (e.g., budgeting, investments) to build the habit.

• Iterate and learn: Treat each decision as a learning opportunity to improve your predictions over time.

• Avoid perfectionism: Even imperfect probabilities lead to better decisions than pure guesswork.

Why It Works: Recognizing uncertainty helps you act decisively instead of being paralyzed by fear or overanalysis.

3. Use EV Thinking to Build a Resilient Business

For entrepreneurs, this mindset is especially useful in high-stakes decisions like funding, hiring, and product launches. Systrom credits expected value calculations as a cornerstone of his success in scaling Instagram.

How to Apply It:

• Prioritize investments: Allocate resources where the expected value is highest, even if the risks are greater.

• Test ideas quickly: Run experiments to gather data, refine probabilities, and improve your EV estimates.

• Focus on long-term growth: Weigh short-term costs against the probability of achieving long-term rewards.

Why It Works: Businesses thrive when leaders make choices based on maximizing value over time rather than chasing quick wins.

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The Bottom Line

Kevin Systrom’s decision-making framework can transform how you approach risk and uncertainty. By focusing on expected value, you’ll make choices that compound over time, ensuring smarter outcomes for your business and life. Learn it, apply it, and watch your results improve.