Why we make (bad) decisions by leaning too heavily on edge cases

You're probably making too many business decisions based on edge cases. This gets compounded if you know the edge cases personally. This typically manifests as bad long-term decisions to avoid short-term pain. Some examples:

Underpricing or not raising prices to keep current customers happy. We tend to be deferential to our early/current customers. If we have relationships with them, it can make us hesitant to expand margins or even pass on costs. Don't do this. You get stuck.

Investing too much in a product feature that no one will use except the one long-term client who requested it. If they represent a large enough % of your margins, this can make sense, but typically doesn't. Don't overspend bending over backwards for one client.

Setting internal policy responding to the behavior of one bad apple that hamstrings high performers. We tend to react to bad behavior by setting policies to counteract it rather than deal with the individual. The result hamstrings talented teammates.

Often a positive outlier outcome has more to do with providence/luck than with our actions — we anchor to these and try to repeat them. Don't get suckered in by an outlier result. Make sure you understand what actually drove success and ensure it's replicable.

We anchor to the subjective rather than the objective. We'll let one bad product/service review from someone we respect kill an idea that actually had legs. Or we lose time and energy obsessing over one bit of feedback. Keep things in context.