Concept · Investment & Valuation

Type 1 vs Type 2 Decisions

Origin: Jeff Bezos

Biological Parallel

Seed germination is Type 1—once the radicle emerges, the seed's stored energy is committed. If conditions deteriorate, the seedling dies. Dormancy breaking demands precise environmental signals: temperature, moisture, light quality. Contrast with daily torpor (Type 2)—hummingbirds can enter hypothermic states overnight and reverse it at dawn, experimenting with energy conservation because it's reversible. Evolution calibrates decision thresholds to irreversibility: permanent commitments require certainty; reversible experiments permit exploration.