by • January 27, 2017 • Lean startup metaComments (2)3867

Accidental charlatans

A bug fell into my beer just now. I fished it out and moved on. But I’m sure from his perspective, that was the formative experience of his (or her, I didn’t check) life.

He’ll return to his bug tribe as some sort of local celebrity. One of the rare few to taste the bread-water and live. I’m sure when he’s on bug talk radio he’s going to say something dumb like, “You’ve just got to believe in yourself and never give up no matter what[1]. That’s what I did, and look at me now.” And a bunch of other young bugs will get inspired and try their hand at drinking some beer and things will go really terribly for them. But this celebrity bug will still think he’s doing god’s work because from his thorough analysis of a sample size of 1, his twist of circumstance is indistinguishable from an act of will[2].

To be clear, I’m not saying that everyone who succeeds got there only because of luck, or that skill is a non-factor, or that we should ignore the hard-won lessons learned by the rest of the community.

What I am saying is that some non-zero portion of the people who appear to be extremely successful (and give us advice as such) are in fact completely full of shit. Critically, they are also unable to recognise that they are full of shit, so they give their advice sincerely. And since they believe what they say (even if they’re wrong), our bullshit filter fails us and we follow them too readily.

A buddy of mine sold his first company to one of the silicon valley unicorns. Over celebratory drinks, he revealed that he’d been days away from going out of business. His salvation was that he’d gotten stuck between Rocket Internet and their US competitor as a pawn on their billion-dollar chessboard. While either one of those behemoths would have simply crushed him 1-on-1, once they were fighting each other, neither could allow the other to add his little business to the enemy side. End result? He got a great exit and is now part of the startup royalty who have sold a business; able to open any door and get any meeting. He’s been remarkably honest about telling people it was more circumstance than genius, but you can easily imagine that slightly less self-aware and humble (or slightly more inclined to make speaking fees) could cause a lot of damage by having an experience like that and then telling young founders to “just keep believing” no matter what is happening.

[1] The reason “never give up” is bad advice Is that it increases both your odds of success and also your odds of going into crippling personal debt. While every successful company obviously didn’t give up, neither did all those folks who eventually wound up in bankruptcy court. Not giving up is a quality shared by the both the biggest winners and the biggest losers, but if you only look at the winners you’ll see a shared quality that seems to cause success. It’s the same fallacy as observing that happy parents have all had unprotected sex, so you start advising everyone to have unprotected sex at all times to increase their happiness. You’ve got to draw lessons from the whole population, not just the “winners”.

[2] Seeing more successful data points actually muddies the waters even further. By looking at lots of folks who won a dangerous gamble (and not looking at the failures), you’ll become more confident without becoming more wise. Elite VCs are particularly vulnerable to making this mistake since they see tons of examples from a small, non-representatice subset of founders and then generalize from there to give advice to everyone else.


Related Posts

2 Responses to Accidental charlatans

  1. Great insights, Rob!

    I’ve also been thinking a lot about the advice given by successful entrepreneurs, but from a different perspective.

    You often hear them (proudly and emotionally) telling the story about how the made it. The struggles, the hustling, the crazy credit card debts, etc.

    But when asked for advice they almost always say “I would never do it like that again” and then they start talking about “how to do things the right way” although they have no experience of doing things that way.

    Isn’t this strange? They have a proven example of how to do it, but tell everyone else to do it another way.

  2. […] other words, wild success does not justify idiotic behaviour and failure in the end does not invalidate a wise […]