The Arranged Marriage Mindset

by Mohammed Aaser

After studying entrepreneurship for two years at Harvard Business School (HBS), I’ve been trying to understand what makes some startups more successful than others.   Moreover, I’ve been especially interested in this since I launched a startup a few years back which I eventually had to shut down (http://www.cafexi.com).

I believe that there are two factors that significantly increase the likelihood of success for startups.  These two factors are adopting an “Arranged Marriage” mindset, and the second is having an “Unfair Advantage”.  This first post covers the Arranged Marriage mindset, and my next post will be about the Unfair Advantage.

The arranged marriage mindset assumes you don’t know much

Take a few seconds and think about what life would be like if you had to have an arranged marriage.  An arranged marriage would likely involve getting to know someone for a short period of time, and making a permanent marriage decision based on that.  You would not be able to live with the person before the marriage.  Nor would you be able to date the person at length to get to know everything about them.  There would be no intimacy before your marriage either.  Both couples’ families would  be involved in the decision making process, but ultimately you would have the go/no-go decision on whether or not to marry the other person.

What would you want from your relationship?  What are your expectations of the other person?  What would be your biggest fears?  Now, what if I said that you had to make this marriage work?  Could you do it?

For many of us, this might be a very difficult proposition.  It’s very difficult to make big decisions like this with little information.   But because there is a tight lock on the marriage - it’s incredibly difficult to get out (unless there are abuse issues) - people make it work and could be very happy.  Moreover, as both parties learn about each other, especially early in the marriage, both partners MUST find a way to make it work.  Sometimes one partner adapts more than the other, and other times both adapt equally.   This learning and adapting, is also critical in making a new business succeed.

The love marriage model assumes you know a lot

If you are dating someone right now you might know how hard it is to commit.  ”I really like this person, we’ve been dating for 3 years, but I’m not sure if she’s the one”.  It’s probably because you want to have a perfect match, and you expect the person to stay largely the same over the span of your marriage.  Moreover, you also expect that passion and excitement to remain somewhat constant over time.  If these hold true, then you will remain in love, and your marriage will succeed. However, as individuals enter new life stages, we can change considerably, and this can lead to friction in the relationship. This could spark discussion like:   

• “You’re not the person I married”
• “I’m not in love with you anymore”
• “Where has the love gone?”
• “I’ve found someone else”

While marriage is seen as a commitment between those that are in love, if one party is not in love with the other any longer, it might be seen as acceptable to separate or divorce.  This means that there may not be as much of a forcing mechanism to make the relationship work.

  

If love prevents you from learning, don’t fall in love

According to many VCs and courses at HBS, “Pivots” are critical in the success of startups.  Most startups start with an idea, only to find that the idea is not working.  They continue to gather customer feedback, and ultimately modify their business and start on another idea.  What’s more, last year I had a chance to meet with a co-founder at BlingNation and he shared an interesting fact.  In a conversation with a VC, he found out that 95% of the businesses that were successful were not operating the business plans the VCs had funded.  This means that only 5% of the successful businesses stuck to their business plans, while most had to change in order to operate.  Moreover, a vast majority of the businesses that stuck to their business plans were no longer in business.

Uncertainty is the name of the game with personal relationships and startups.  If I fall in love with an idea or a person, it might be very difficult for me to change when faced with information that shows that the concept or relationship isn’t working.  If I instead commit myself to an industry, and focus on learning as much as I can and adapting my actions, I might be significantly more likely to have a successful.  The commitment and learning that arranged marriages can have, can be very powerful for a startup.

Loss aversion may be the reason why it’s so difficult to adapt when you are in love

The truth is that very few things in life are actually known.  And for those things that are known, they are constantly changing.  For example, imagine that you are Kodak in the late 1990’s and digital photography is picking up?  What would you do?

Well Kodak didn’t adopt a learning culture and now is a fraction of the size they use to be.  They were in love with film, and expected the market to stay the same.  The underlying cause of their failure was their response to loss aversion.  Loss aversion is the feeling that people get when they could lose something they own or love deeply.  When individuals are faced in these types of circumstances, they become mentally “rigid” and it becomes difficult to respond creatively.  This can lead to either dramatic and risky responses or no response at all.

If Kodak had adopted a learning philosophy, they may not have been impacted by loss aversion.  Instead of thinking about what they could have lost, they would have focused on what their market was really looking for (e.g., what they could gain). That’s exactly what Fuji did, and now they have taken Kodak’s place in both film and digital industries.

When responding to situations in our lives or our startups, how often are we thinking in terms of loss aversion, and how often are we thinking about learning and gaining?  If we are thinking about how much money we might lose, or our reputation, this may hinder us from learning. Even in our personal relationships, how often are we motivated by loss aversion (e.g., losing our relationship or worried about problems in the future), when instead we should be thinking of ways to learn and improve our relationships?