Biases – the ones that we ignore

Posted on Posted in Biases

Did you know this? As human beings, we have have unconscious biases. When starting/running a business, the two most perncious ones are the “echo chamber” and “reinforcment bias”

The Echo Chamber is quite easy to understand – we surround ourselves with people and opinions, who or which coincide with our own thinking! This is fairly normal in “most” people (I will come back later to why I put most in commas) – after all, who wants to hear that cantankerous fellow talking about risks or continuously pointing out pitfalls? What a wet blanket! Further, if you are a group of co-founders who have set up your new venture, it is very likely that you are collaborating with like-minded people from the get-go. Again, you are hardly likely to set up a company with someone you dislike or disagree with, are you?

Reinforcement bias is harder to catch, though – because this has to do with how we look at and filter data. And, we are not even aware that this bias is at play. Typically, data that supports your business case will get higher billing and support in your discussions, while you will find many excuses for downplaying data that does NOT support your business case. You may even ignore that data outright. Again, this is part of human psychology – we can not help but choose reinforcing data over contrary data. The pleasure nodes in our brains get activated when we see stuff that we are rooting for! Is it any wonder that the meme of Archimedes jumping out naked from his bath and running through the streets is such an enduring one?

But, continuing on this path will cost you dear in the future – you need the naysayers, you need the contrary opinions for a reality check. That is how you build a robust business, by confronting all the risks and pitfalls head-on AND planning mitigation strategies. Remember, I said “most” previously – well, the exceptions are the successful entrepreneurs. They are the people who did not let the echo chamber and reinforcement bias lead them into a cul-de-sac, while (and this is important) being COMPLETELY committed to their vision.

Each and everyone of you can and should play the devil’s advocate in your team (take turns!) for all business decisions – and, that is a very, very good way to ensure that you are not being blind sided. But, having said that, you are also focused on your business – how do you keep track of what others are doing out there? They could be building a better mouse-trap, and faster than you. That’s where we come in – we provide you all the information and cross-checks that you need but may not be able to get internally.

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