Success and Cognitive Bias
One thing that often strikes me about conversations regarding start-up success is the pervasiveness of the narrative fallacy and hindsight bias.
We can go to Wikipedia’s entry on Taleb for a definition:
Narrative fallacy: creating a story post-hoc so that an event will seem to have an identifiable cause.
Allow me to illustrate. What caused YouTube to grow at phenomenal rates in 2005/2006, eventually leading to a $1.65 billion acquisition by Google in 2006?
Was the cause:
Continue reading “Cognitive Biases, Positive Black Swan Events and Startups” »
I have a great opportunity to test out some theories and to follow the principles advocated by the likes of Eric Ries, Andrew Chen, Sean O’Malley, Dave McClure and Sean Ellis. I thought I’d keep a running blog on our progress.
I won’t name the company until the time is right, but I’ll tell you a little about it:
- Company is self-funded. This is a good thing. Not only is it a bad time to seek funding, it’s a great time to prove the business model prior to funding.
- Product is barely started. This is a good thing, as well. This should enable us to run customer development principles in parallel with development. The days of figuring out who your customers are after product completion (often after funding) hopefully will soon be over.
- Team of 3: vision guy, domain expert and business development (CEO); developer; marketing guy (me, FWIW).
- Business plan assumes a Freemium model, with additional revenue from highly targeted advertising, lead selling, and a la carte purchases.
Week 1 Tasks:
- Document Business Hypotheses – market segment, customers, pain, acquisition methods, etc.
- Identify 100 potential users to interview.
- Identify 50 potential partners to interview.
- Create interview process and objectives.
- Create MRD based on “vision.”
- Identify key metrics for proving model.
- Prepare blog launch using company domain.