Stop assuming that your customers want things that you want

Mind projection fallacy happens when we assume that most other people are like us. It’s an error to assume that they have similar desires and fears towards things as we do.

Normally, this is not such a big issue. The worst that can happen in most cases is perhaps an exchange of incredulous looks (for example, when a cricket fan encounters a non-cricket who doesn’t know who Sachin Tendulkar is).

But for entrepreneurs, the mind projection fallacy is dangerous because it means they can end up working on the wrong problem...  Read the entire post →

Ask people what they did, not what they will do

When it comes to our life and decisions, we’re optimistic rationalizers. Every New Year’s Eve, we take resolutions that are grounded in perfectly valid reasons – reducing weight, quitting cigarettes, reading more books and so on. If someone asks why we want to read books, we can confidently blurt out that it will expand our worldview.

Memory is more reliable than intellect when it comes to understanding customer behavior

Fast-forward a couple of weeks in the new year, and we’re often back to our old ways. It’s spectacular that even when we quit our yearly resolution within weeks, we always have good reasons for why we abandoned our goals. (We’d rarely acknowledge that we’re lazy or are addicted to cigarettes.) ...  Read the entire post →

Never ask your friends or family if they like your idea

People are generally nice in person. You’d know this if you have ever gone to parties where everyone is super nice to others but as soon as the party is over, they start gossiping about the ones who’ve left. Very rarely would anyone tell a person at the party that they look like a clown (while often thinking in their head of the same).

Be careful who you ask for feedback

This tendency of people not to tell honestly what they have in mind misleads entrepreneurs when they seek feedback on their idea. Even if the idea is obviously flawed, in general, people won’t tell that to an entrepreneur’s face. This means, if you’re an entrepreneur, you rarely get to hear why your idea sucks. ...  Read the entire post →

Always seek disconfirmatory evidence

Thinking is expensive for an animal – our brain consumes almost 20% of the energy of the body (even at rest). Hence, the brain takes whatever shortcuts it can to do less deliberate thinking (that requires more energy) and more automatic thinking (that requires less energy).

There’s another name for such automatic thinking: cognitive bias.

Confirmation and confidence bias: the two cognitive biases that kill most startups

The word bias is used because our preprogrammed ways of thinking bias us towards paying more attention to certain information at the expense of ignoring other information. So, cognitive biases are systematic errors in viewing of the world. They are very hard to correct because you literally see the world through a lens that’s painted with cognitive biases.  ...  Read the entire post →

Map is not the territory

Imagine you are tasked with making a map of the world. How would you go about it? Think about this problem for a moment before reading on.

Maps are convenient simplifications

Perhaps you’d start with a stable reference point – like the North Pole – and start surveying Earth’s topography around it. Or you’d rely on the satellite imagery to gather the raw data. But regardless of what’s the source of your data, pretty soon you’d run into a challenge. Earth is a 3D surface, while you’re asked to prepare a 2D map. There is no simple way to present 3D information in 2D without losing fidelity of actual information.   ...  Read the entire post →

You’re probably not a good leader (because being that is hard)

Most entrepreneurs believe that they’re good leaders because their team does what they ask them to do.

But that’s not leadership – that’s simply people working because you’re paying them money to work. There’s a big difference between compliance and commitment. Entrepreneurs often get compliance with their decisions, but they end up thinking they’re getting commitment.

Leadership is difficult because human nature is complex. Humans are capable of simultaneously admiring and despising people who have a higher status, more money or better prospects than them. This makes the job of a leader tricky because she has to focus on the quality of work and get the job done, despite who did it (an admirer or a hater). The leader has to somehow navigate people’s widely different emotions, desires, and personalities and make them work together to deliver an organization’s goals.  ...  Read the entire post →

Your company’s org chart is more important than you think

Right from the start, an entrepreneur should constantly be thinking about what arrangement of people is most suitable for delivering the goals of the company and what arrangement may be required about a year after. No one else would do this thinking. No employee will come and say fire me and hire a specialist instead. Only an entrepreneur would need to take this call proactively.

Same people in different arrangements lead to different levels of satisfaction and success.

Organization design is simply what roles should be there in the company and how those roles should be related to each other. Many entrepreneurs and CEOs follow industry norms in hiring, and so their organization chart takes a standard shape that’s indistinguishable from their competitors.  ...  Read the entire post →

Aim to be a cult by hiring people who obsess about the same things

Cults obsess about arcane stuff that nobody else cares about. Most of the time, they keep it to themselves and the rest of the world ignores them. But if they discover something valuable, the rest of the world benefits.

Most mainstream phenomena start as a cult. Veganism was once a cult, and so was the idea of the US as a country. Science began as a cult when the Royal Society of London adopted Nullius in verba as its motto. By asking its members to “take nobody’s word of it”, the Royal Society became attractive to certain people and extremely unattractive to other people. This cohesion of views is what laid the foundation of modern science’s growth from a startup to a major force in the world. ...  Read the entire post →

The number one job of a founder is to communicate clarity

In the very early stages when there are few people in the organization, only a few projects are running at any point in time. The founder typically knows how such projects connect with and reinforce each other to produce an output that’s more than the sum of its parts.

Organizations amplify the directions coming from the top

As an extreme example of this, consider the organization when it is just one person: the founder. This person has the luxury of high bandwidth communication between different concepts sitting in his/her brain. The product manager, the marketer, the developer, the designer – all are sitting in the same brain of the founder, and hence alignment of their actions is a natural outcome. Whenever there’s an impulse in one part of the brain (like launching a new feature), another part of the brain immediately pitches in to prevent it from getting misaligned (like wondering – how will this feature sell?). ...  Read the entire post →

People don’t leave companies, they leave their bosses

It’s a common way of saying that so and so has left a particular company to join another company. Actually, a company is an abstraction for the group of people who comprise it. So, often, what people exit from is not the company but their interactions with their team in the company.

Most people would stick around as long as they’re treated with respect, paid fairly, instructed clearly and given work that usually falls within their abilities but sometimes challenges it, giving them opportunities to grow. Good bosses ensure that they create such conditions for people. ...  Read the entire post →