Given that biases are an inherent part of the human nature, you might consider discussing how to use them to the startup’s advantage. This does not have to be Dark Arts, though if you want to succeed in business, almost anything goes.
In fact, if entrepreneurs understood probabilities, most would never start any business, given the prevalent rate of small business failure. Furthermore, startup employees tend to be underpaid and overworked, hoping for a large payoff down the road, which almost never happens. You can get more out of people by building a sense of loyalty (a totally misplaced concept for an employee).
On the darker side, one can use anchoring to pay people as little as a frugal but eventually successful startup (“we have to be like them to succeed!”), In fact, if you go through the list of cognitive biases on wikipedia, most of them can be used to the startup’s founders’ advantage.
Of course, it is essential to not unwittingly succumb to the known biases, if you are running a business (sunk cost is the most pervasive one). One standard approach is to pay a knowledgeable outsider to question and critique your decisions on a regular basis. This used to be one of the function of the board of directors, but we all know how well this works out in practice (those who stir the pot do not keep this cushy job for long). The VCs are rarely up to the task, either.
To be frank, I think most entrepreneurs are naïve and incompetent (this is from hanging out in online entrepreneurship communities and going to events for entrepreneurs). As an entrepreneurial type, most entrepreneurial types annoy me. (The stereotypical example would be a college entrepreneurship club that doesn’t result in the creation of any new companies. Also, try any nonprogrammer that wants to start a web company, or anyone who complains about being rejected from Y Combinator – being rejected isn’t a sure sign of failure, but complaining probably is – the appropriate response is surely either stoicism or defiance :D) I’m sure that a driven less wrong user has a significantly better chance of succeeding than the median entrepreneur.
Why fight what you can use?
Given that biases are an inherent part of the human nature, you might consider discussing how to use them to the startup’s advantage. This does not have to be Dark Arts, though if you want to succeed in business, almost anything goes.
In fact, if entrepreneurs understood probabilities, most would never start any business, given the prevalent rate of small business failure. Furthermore, startup employees tend to be underpaid and overworked, hoping for a large payoff down the road, which almost never happens. You can get more out of people by building a sense of loyalty (a totally misplaced concept for an employee).
On the darker side, one can use anchoring to pay people as little as a frugal but eventually successful startup (“we have to be like them to succeed!”), In fact, if you go through the list of cognitive biases on wikipedia, most of them can be used to the startup’s founders’ advantage.
Of course, it is essential to not unwittingly succumb to the known biases, if you are running a business (sunk cost is the most pervasive one). One standard approach is to pay a knowledgeable outsider to question and critique your decisions on a regular basis. This used to be one of the function of the board of directors, but we all know how well this works out in practice (those who stir the pot do not keep this cushy job for long). The VCs are rarely up to the task, either.
Success of the startup depends a lot on the industry it is in:
http://www.amazon.com/Illusions-Entrepreneurship-Costly-Entrepreneurs-Investors/dp/0300113315
That book is actually pretty optimistic for Silicon Valley type stuff if you read it.
Startups that get venture capital tend to have high expected values:
http://80000hours.org/blog/12-salary-or-startup-how-do-gooders-can-gain-more-from-risky-careers
To be frank, I think most entrepreneurs are naïve and incompetent (this is from hanging out in online entrepreneurship communities and going to events for entrepreneurs). As an entrepreneurial type, most entrepreneurial types annoy me. (The stereotypical example would be a college entrepreneurship club that doesn’t result in the creation of any new companies. Also, try any nonprogrammer that wants to start a web company, or anyone who complains about being rejected from Y Combinator – being rejected isn’t a sure sign of failure, but complaining probably is – the appropriate response is surely either stoicism or defiance :D) I’m sure that a driven less wrong user has a significantly better chance of succeeding than the median entrepreneur.