Understanding escalation of commitment in product decisions

Escalation of commitment refers to the tendency to continue investing in a decision despite evidence suggesting it is flawed, often due to personal biases and emotional attachments to past choices. This behavior can lead to wasted resources and even business failure if not recognized and addressed. The text highlights the example of Peloton, which continued to invest in its hardware business despite financial losses, illustrating the impact of escalation of commitment. It also shares a personal anecdote of how emotional investment can cloud judgment in product management. Strategies to mitigate this bias include leveraging data to confirm or disprove biases, allowing time to consider decisions, collecting more information to reduce risk, time-blocking investments to reassess commitments, and seeking feedback from colleagues. These methods aim to ensure more informed and balanced decision-making, helping to avoid the pitfalls of escalating commitment.