In a couple talks I’ve given this year, I talked about failure – promote the book! I talked about over-confidence/ hubris as one of the reasons I, at least, failed.
I spoke to and heard from a number of successful entrepreneurs who advised me on certain traps as a first-time entrepreneur. I ignored some of the advice thinking we were going to be successful despite these “red flags”. This confidence is an example of optimism bias.
From Wikipedia, “optimism bias is a cognitive bias that causes a person to believe that they are less at risk of experiencing negative events compared to others”. There is optimism bias for both positive events – we will be more successful than others – and negative events – we will not succumb to the trappings of others who have failed.
Optimism bias is powerful and part and parcel of the confidence to succeed; however, it needs to be paired with a healthy dose of curiosity and adaptability. In our case, we should have heeded the cautions from entrepreneurs who have done it before and made similar mistakes such as full-time vs. part-time dedication, the importance of customer discovery, and even product and market focus.
Since we failed, I’ve talked about this “rite of passage” where entrepreneurs must make some mistakes to appreciate the lessons from others (and yes, part of entrepreneurship). However, that’s partially flawed. The rite of passage, instead, could be appreciating the difficulties of creating a viable business from nothing, not succumbing to mistakes others can teach you.
Beware of optimism bias. Be confident, not cocky. Practice more humility and greater curiosity. Realize everyone intrinsically has value and knowledge you don’t have.