9 cognitive biases every startup founder should be aware of (and how they impact you)

9 cognitive biases every startup founder should be aware of (and how they impact you)

As a startup founder, you face decisions daily. Each day you're taking in new data and deciding on a course of action. Being aware of how cognitive biases can skew the data you gather, and the decisions you make on it can help you reduce errors in judgment and improve your odds of success.
You can overcome many biases with ample data and critical thinking. But first, you have to be aware of them.
Below are ten common biases and how they can impact your startup.

Anchoring Bias

The tendency to rely heavily upon the first piece of information we receive.
When first exploring a new idea (ex., a new feature), shooting down or promoting it based on your first test is dangerous. Likewise, anchoring on the first customer interview or the first thing a customer says can lead you astray. If the initial feedback is negative, you may be blinded to positive outcomes later in the conversation. And potentially worse, if the initial feedback is positive, "Oh, this is a wonderful idea," you may be blind to indications it's a great idea they won't buy.

Availability Heuristic

The tendency to think that things that happened more recently are more likely to happen again.
Often memories with strong emotions are what come to mind first. When thinking through customer feedback, strong feedback, negative or positive, can cause you to over-anchor. Thus these strong memories of feedback tend to have an outsized influence on our decisions.

Confirmation Bias

We tend to favor our existing beliefs over what data or others tell us.
There are two common ways confirmation bias can trip up founders, leading us to avoid digging deeper or ignoring what we don't want to hear. When doing customer interviews, you might only write down what confirms your beliefs while ignoring what pushes against them. Similarly, you may not notice where you need to dig deeper. This is especially true when getting feedback from a friendly and well-meaning friend who doesn't want to hurt your feelings.

False Consensus Bias

The tendency to overestimate how much others agree with your beliefs and values.
For a startup founder, this can be especially dangerous as you can assume you understand a customer's point of view when you don't. It can also lead you to believe that your worldview represents that of your markets when in fact, you may not.

Framing Bias

We can influence someone's response by how we frame the problem.
I've seen this many times with founders when interviewing customers who start with "Don't you think…". This happens commonly by treating a customer interview like a sales pitch. You're not trying to sell someone when interviewing them and testing ideas; you're trying to understand their worldview and problems. Overly framing a problem and not listening can lead to never hearing negative feedback.

Halo Effect

Our first impression of someone strongly influences what we think of them.
Your mom was right, don't judge a book by its cover. It's essential to check your initial bias and lean in and hear someone. This is especially true in customer interviews. Refrain from letting someone's title, or lack thereof, cause you to ignore or pay too much attention to their feedback. Likewise, for appearance, race, gender, etc.

IKEA Effect

We disproportionally place a higher value on the things we help create.
The IKEA effect can lead founders to value their product more than the market sees it and stick to a bad idea longer than its worth. See also Sunk Cost Fallacy.

Optimism Bias

The tendency to overestimate our probability of success.
As a founder, you need to be able to shape reality to your will. It can take a lot of effort to start something from scratch. But that same level of optimism can lead you to think the probability of success is higher than it is. It can also cause you to be overly optimistic about how long something will take to accomplish.

Recency Bias

The feedback you hear most recently is what you prioritize.
Recency bias can lead us astray in prioritizing and focusing on what is essential. Recent negative feedback might make you focus on a feature that isn't common to the larger market or impact your mood negatively. In contrast, you might be leaving value on the table by not looking more deeply for trends and themes in feedback that can have an outsized impact on a more significant portion of your startup's audience.

Useless Stat: 744 words
Copyright Β© 2022, Bryan Smith, All Rights Reserved