Optimizely & The Dunning-Kruger Effect

Working at Google can make you formally incompetent when it comes to entrepreneurship. That was one of the most interesting takeaways from Optimizely co-founder and CTO Pete Koomen’s recent SaaS Office Hours session with Redpoint’s estimable Tomasz Tunguz.

An affable, self-deprecating guy, Pete Koomen talked a lot about the idea of “unknown unknowns,” or things you don’t know you don’t know about. The basic premise is this: when you work at Google, you are working on top of massive geysers of talent, distribution, capital and institutional expertise. These geysers are hard to see (eg. one goldfish asks another goldfish “how’s the water?” to which the other responds “what’s water?”) and thus incredibly distorting.

You’re constantly interviewing people, so that must mean you’re great at recruiting. You put out a press release and the whole world descends, so that must mean you know how to promote. And when you hit a problem in QA and you throw a suitcase of cash at it and it goes away, that must mean you’re a superlative product manager.

This is not the same thing as taking things for granted. To do that, you have to recognized that they exist in the first place. At Google there are thousands of problems that simply aren’t there anymore, owing to lots of smart people who identified them and extinguished them while you were in the eighth grade.

And so it’s only after you march triumphantly out of the mothership to write your own story, and then spend nine months by yourself in a small dark room, that the howling voids of talent, distribution, capital and institutional expertise become painfully apparent.

Listening to Koomen talk, I was reminded of the Dunning-Kruger Effect, which goes a long way towards explaining 90% of all YC pitches (as well as things like Donald Trump). To quote Wikipedia, the Dunning-Kruger Effect is a cognitive bias “wherein relatively unskilled individuals suffer from illusory superiority, mistakenly assessing their ability to be much higher than is accurate.”

In other words, what makes people incompetent is that they don’t know they’re incompetent. As John Cleese aptly puts it, “If you’re absolutely no good at something at all, then you lack exactly the skills that you need to know that you’re absolutely no good at it.”

Ironically, Donald Rumsfeld, one of the most catastrophically incompetent people in recent history, was really fond of this concept as well: “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know….” etc.

This is admittedly a very old idea, and where we get the name for our second year of college from, but Dunning and Kruger were the first people to formally study it by comparing international student test scores with post-test self-assessment scores (guess which test we aced, America?).

The inspiration behind the study was a newspaper article about a bank robber who was shocked to discover that he was identified from surveillance camera footage, because he always slathered his face in lemon juice before walking into banks. Lemon juice can be used as invisible ink.

The story ended well for Optimizely:

Talent — After a few misfires, they decided to hire for hustle and found a determined salesperson (from a completely non-tech background) who worked off-commission to help shape and define the sales process.

Distribution — An early successful effort with a Haiti Relief Fund site, coupled with Dan Siroker’s previous role as Barak Obama’s 2008 Director of Analytics, helped garner positive attention.

Capital — After a long dry spell, they found two agencies to give them a thousand dollars a month for early access to the beta. Revenue, no matter how little, means validation.

Institutional Expertise — That’s always in process, but at 400 employees and counting they have a plan, a credo, and a vision.

So: lesson learned. Know that you are incompetent at not just ikebana or line dancing or needlepoint, but of entire worlds of thought and focus and discipline of which you are currently completely unaware. Ask advice, don’t be too cool to work with a management coach, and fire yourself early (even at jobs you’re legitimately competent at) in order to scale effectively.

And don’t let them stop you from slapping on the lemon juice and chasing your dreams.