Universal Truth and Entrepreneurship and Innovation

Unrealistic optimism is a pervasive human trait  
Believing what one wishes were true
Facts cause discomfort, just ignore what is  
Artifact of the frontal cortex they say  
It's kinder to be cruel they say  
Let them know so they may heal  
But who's to decide  
If happiness lies in lies  
If delusion gives hope  
Who am I to reveal  
Maybe my reality is not objective  
Maybe it's better to linger in the subjective  
For all reality is ultimately just perception  
A universal truth, is there one?  

The first line of that poem (I’m going out on a limb here by calling it that), is taken from an article in the journal Nature, How unrealistic optimism is maintained in the face of reality.

We survive with the help of this mechanism, otherwise we would be overwhelmed by the sheer number of risks we run everyday and every minute of our lives. We selectively weigh evidence that will reinforce our currently held beliefs. We knew that before, but this paper presents the manner in which we do that, and the region in the brain that is responsible for this behaviour.

I’m not qualified to discuss the scientific aspects of the paper. I was just astounded to learn that we (the scientists) are now aware of the inner workings of the process of self delusion. That does not mean that we can do anything about it though. All it gives us is a sense of accomplishment, but beyond that we will just go on living, believing what we want to and ignoring all the rest.

The reason why this interested me so much was because self-delusion seems intimately linked to entrepreneurship, which in turn leads to innovation, some successes, and a lot of failures. Entrepreneurship requires a high tolerance of risk. The way to counter this is called self-confidence in layman’s terms. What self-confidence needs though is an ability to maintain optimism, and consequently a greater propensity to ignore facts, or selectively pick facts (this is confirmation bias). All said and done, this is a form of self-delusion.

Everyday I encounter these individuals who stay convinced of the superiority of their idea or invention even when presented with overwhelming evidence to the contrary. They continue to persevere against impossible odds and obstacles. They fly too close to the sun and inevitably get burnt. Sometimes luck favours them, and make no mistake, luck or fortune or fate or timing or whatever one wishes to call it, plays a huge role in any success. Daniel Kahneman who won a Nobel for his extraordinary insights has covered this well in Thinking, Fast and Slow.

The Lean Startup movement was supposed to counter this way of working. Evidence based decision making was supposed to take center stage. Startups were supposed to carefully research their users, carry out customer development, and build products with a high degree of success.

And though Lean has gained some traction, I continue to meet folks who aren’t interested in any of these concepts. Even accelerators and incubators that depend on successful outcomes of their mentees don’t want to follow a rigorous process of factual evaluation. Lean is theoretically the ideal way of building a venture, and seems to fall apart when tried to be put in practice.

Consider this fact: statistically, 90% of new products fail. Which means that if someone were to follow a thorough evaluation process of idea validation, 9 times out of 10, they would be confronted with information that would tell them that their idea is BS and should be abandoned or modified. And who wants to hear that? Who wants to learn that the baby they have nurtured should indeed be thrown out with the bath water? Certainly not entrepreneurs. It is indeed a very rare breed of person who has the open mind to listen to criticism and the courage to take negative feedback in stride, who willingly wants to be challenged, and who would change her decision based on unpalatable facts. We’ve all heard reports of even top consulting firms being brought in to rubber stamp decisions already made, to give those decisions legitimacy in the eyes of the others.

That is the Achilles heel of Lean. It ignores a basic human trait, the survival instinct and the capacity for self-delusion. It is the Achilles heel of any company or consultant that deals in facts and expects changes to be made by their clients based on those. The research and data are ready to speak, the question is who is willing to listen?