> Founders frequently convince themselves that this new person they hired is an expert on this topic, and they should defer to them.
I've more often heard of the opposite problem. Especially when the founding team has zero education or experience in some domain, but makes up for it with ego.
Maybe a good practice is that, when a founder's intuition doesn't agree with the team's expertise, they should discuss, and try to arrive at better understanding and decisions than any of them could've individually.
+1 on the opposite problem being much, much more common. Especially in any domain or application where there is some deep science or subject matter expertise involved.
I've seen countless VC-funded startups which promise to combine "shiny technology X" with "problem Y" to create "amazing product Z". A lot of times, I know for a fact that "technology X" has never even been shown to make a difference on "problem Y". As in, I can point to literature of some sort that shows how it has a marginal effect at best, or is prohibitively expensive relative to existing state of the art. That doesn't necessarily mean "product Z" is a bad idea... but _so_ many ego-driven startup founders get fixated on selling the technology story instead of the product story.
Maybe the current macro-economic climate will wipe a lot of these guys out, since they'll be forced to figure out how to execute on the product side instead of selling the same ol' obvious BS tech/science story.
Few startups - unless they're extremely well funded and have leadership with backgrounds in research and the technical domains in which they're specializing - invest a fraction of the R&D tat would be necessary to improve the tech. In a best case scenario, someone external publishes an innovation which the company can pivot towards to save their butts.
For everyone else? Might as well light piles of millions of dollars on fire.
Complete failure of the innovation system to rely on ego-driven founders with no technical background making risky bets with low probability of success.
I totally made this mistake many times. Oh they are a marketing agency, they must be experts in this.
Well maybe they are, but they don’t know MY customer. I’ve spoken to 1000s of my customers at this point. It doesn’t always matter what industry standard is, it matters what my customer wants.
I think the author is speaking only from the perspective of dealing with tech companies in the VC domain. With that context, what you quoted makes complete sense. Which is another discussion in itself.
Yeah, my guess is this is the more common case for a randomly selected startup. But I suspect Casey doesn't advise a randomly selected sample of startups.
It is. But without survival bias no successful company would exists.
The success of a company is highly tied to the intuition of the founder, thet are usually the only people that are critical to the company still improving. But the opposite is true, they are the only ones that are critical to bankrupt the company. But they take decisions taking into account the success of the whole company, something that team don't do as much
> It is. But without survival bias no successful company would exists.
I agree with your overall argument but not this premise -- without survival bias you still get all the successful first-time companies who, through more dumb luck than anything else, happen to luck their way into a perfect situation without any past company experiences to bias them, survival or not
But you wouldn't luck into a new market if you just listened to old data, meaning that such luck requires founder intuition and not expertise or customer expertise. Established companies will always beat you on expertise and data, so founder intuition is the only reason a startup can compete, if you don't rely on it then you have lost before you even start. That doesn't guarantee success, but not doing that guarantees failure.
Why is founder randomness interesting? It doesn't matter if you got good or bad intuition, if you don't trust it you don't get that chance to succeed. Both talented and lucky founders did it the same way.
It's interesting if combined with the insight that a lot of founders were simply lucky, regardless of what they tell themselves and others about why they succeeded
I don’t understand how survivorship bias is being used here. I thought it was a wholly backward-looking error of not taking into account failures along with the successes, not something that somehow empowers future success.
I don't disagree but just labelling as survivorship bias feels like quite a low effort remark.
Maybe I'm just romantic, it seems to me that the perfect storm of having the person with good product intuition also in the founder spot with decision making power, accountability and historical context/institutional memory is pretty powerful...
The Appeal to Authority (or rather, the deference to authority) fallacy is insidious, regardless which direction is comes from. The founder may see themselves as the unique authority because they are the owner, they laid the groundwork, and they know their customers. Alternatively, the founder may see themselves as completely ignorant in a space (say BD strategy or industry marketing) and defer entirely to a professional firm or consultant.
Both of these are folly. Yes, the founder must have opinions and some amount of ego -- they must remain bought into a mission, but the key to success is flexibility, rationality, and willingness to change one's mind. This is a global truth, too. Basing a company (or a business unit, or a product team, or a functional group, or whatever) on a cargo cult of ego may work for a while but it will create far more pain & suffering than success.
Also easy to do because I really liked autonomy as an employee. But many people don’t, so giving out too much can feel like I don’t care / rather than I trust the employees judgement and am letting them make their own success or mistakes.
I'm not a fan of using the term founder in this case. It would be more appropriate to use owner. This is entirely so that founder in this case understands how important their roles is. I've found this issue more prominent in tech that most. Also this usage of "founder intuition" sounds more similar to survivorship bias which is entirely why I'm not a fan of such terms.
It's understated how important the language we use, internally and externally, is. This could be another post in itself and probably more connected to psychology or etc.
The tensions outlined in this article are very hard to navigate. In some sense it comes down to awareness and handling of "what you don't know you don't know". That skill is arguably a requirement to be a great leader, but it is hard to teach and may largely come down to having a certain inherent capability.
"Founder Intuition" == Founders syndrome is a problem... sooner or later... always a problem.
"Team Expertise" == Process people tend to form conglomerates, and productive talent tends to form pockets of chaos. These roles are both foundational concepts, and diametrically opposed to each other. The suits always win in the end, as they have a singular focus.
"Customer Expertise" == learning about the 4 types of customer, then why 3 out of 4 types are essentially irrelevant to a profitable business.
This comment, though it lacks detail and is probably illegible to someone without the right level of experience, rings very true to me.
The OA puts forward a reductive thesis that is easy to digest but doesn’t get to the heart of anything interesting for me.
It’s definitely true that the traits and disposition necessary to be a successful founder are not the same as to be a successful CEO of a large company. I don’t think it can be reduced to the dimension of trusting “the team” more or less as you scale though. Judgement is required at all scales, perhaps even moreso at large scale when there is innumerable data and countless trained storytelling voices attempting to influence you. At this point bullshit detection becomes the primary leadership skill, whether it’s the founder or someone else in power doesn’t really matter.
I agree, with the exception of the second point. One can make the case, that team expertise and process people enabled, e.g., Amazon to become the juggernaught they are. And there is always the risk of assuming that chaos equals productivity, when more often than not it is simply chaos.
"Amazon" is not what most would guess, but indeed it tends to suck the oxygen out of local Tech economies (until it starts to slowly bid down salaries).
Real change causes chaos in product sectors, which is another reason most large firms haven't produced a real "winner" in decades. Why bother when people can still make money from garbage products, in fact I would conservatively estimate it is currently 90% of the Tech sector. =)
I've more often heard of the opposite problem. Especially when the founding team has zero education or experience in some domain, but makes up for it with ego.
Maybe a good practice is that, when a founder's intuition doesn't agree with the team's expertise, they should discuss, and try to arrive at better understanding and decisions than any of them could've individually.