There are many articles these days about young startups raising tons of money. There is also an increasing number of articles about well-funded startups suddenly struggling or shutting down. Every time a new story comes out, there’s a chorus of comments about how a failing company was doomed from the start, or how the VCs investing at huge valuations are dumb, or how the founders of a company don’t know what they’re doing. Sometimes these comments are accurate, but much of the time they’re ill-informed. These comments also reveal two common biases: the tendency to underestimate others (and overestimate oneself), and the tendency to draw conclusions from present data without considering what data might be missing. These are dangerous biases – especially when used by founders to hastily dismiss the quality of their competition.
Respect the Other Players
Respect the Other Players
Respect the Other Players
There are many articles these days about young startups raising tons of money. There is also an increasing number of articles about well-funded startups suddenly struggling or shutting down. Every time a new story comes out, there’s a chorus of comments about how a failing company was doomed from the start, or how the VCs investing at huge valuations are dumb, or how the founders of a company don’t know what they’re doing. Sometimes these comments are accurate, but much of the time they’re ill-informed. These comments also reveal two common biases: the tendency to underestimate others (and overestimate oneself), and the tendency to draw conclusions from present data without considering what data might be missing. These are dangerous biases – especially when used by founders to hastily dismiss the quality of their competition.