The Psychological Biases of an Entrepreneur Explained
Source | Entrepreneur : By Lalit Keshre
You are on your way to the office in a cab, and you are checking your twitter. You read a tweet that one of the unicorn startups is launching the same product you have been slogging at for the last six months. I am sure this would have happened with many of the entrepreneurs. Do you realize the sinking feeling you go through? More importantly, do you know that this news influences most of the decisions you take that day or the next couple of days? But then, in a few days, your decision making is back to normal.
Availability heuristics is just one of the biases that entrepreneurs go through in their daily lives. Before the work of Kahneman and Tversky – the two psychologists quoted in most of the psychology books we read today, the predominant view was that human beings are rational. They did many experiments to prove the biases and heuristics that human mind experiences. And entrepreneurs are human beings – same biases influence us in our everyday lives.
When I was running my first startup, after every meeting with someone, be it an investor or an advisor – my cofounder and I used to have a profound discussion on how we can start working on the inputs provided in the meeting. We forgot one crucial thing. The advice people give is based on their experience and on what they understand of our business. The frame of reference of someone advising your startup is very different from yours. I have also realized how some people are so smart that they do not provide advice but always tell their story. They make sure that you understand what worked and what did not “in their circumstances”.