Entrepreneur behaviors: overconfidence and representativeness
Draft. Please help review, from concept to english.
In Developing Innovative Ideas for New Companies, a course by Coursera and Maryland, I had the chance to learn about the concepts of overconfidence and representativeness. These traits are known characteristics of entrepreneurs, sometimes allowing them to move quickly but sometimes allowing them to screw up things.
In this essay, you will learn about these traits using a case when I had a chance to participate in a meeting at a friends company. A discussion started as I wanted to understand how they were certain about a specific hypothesis.
One of their cofounders explained, with a reasonable level of confidence, the principles of what they were doing. Therefore, he was not justifying with no reason. He was using materials and references to assert his view — I believe it was their view. He also invited me to read a supporting article that was the core of the idea.
The above situation is pretty common: adverse discussions can rise and give people the means to understand how decisions are made. What was really adverse, however, was what happened next: It turns out that I was an outsider and it turns out that I was hanging there and really interested in the topic. So I dug into reading the article.
As I dug into reading, I was puzzled when understood the article with a different view. I even understood the article final remark as a counterargument to his point. That was just insane — to have two entrepreneurs holding different positions exactly over the same material.
But I could not really understand this exactly right there. The full realization of it came over a car ride. A few hours later, I get into a car for a one hour trip, alongside with another person that was in the same meeting.
That was the moment that we allowed ourselves to talk about the whole experience, plus summing what I read too.
So there we found ourselves getting rid of the negative side of representativeness, in fact using a social capital. It was an illuminating moment because we learned that entrepreneurs can do almost anything with data amidst the vast amount of events and their urgent agenda.
Such moment of confusion, and reflection, was the light that led us to search for answers. The real trouble there, at least for that startup, was that their team did not read the same article that the founder read — they never had the chance to discuss it outside their urgent agenda.
So I would think that the main lesson is that what was being pushed, towards that company’s agenda, was in fact a trait projected to become a cultural trait — the founder wanted it to be part of their way of doing things.
The problem, however, is that all cultural traits needs to be considerations that are really understood and accepted by all. This notion should support entrepreneurs to probe traits using examples and success stories, instead of pushing interpretations from personal agendas.