Entrepreneurial truisms and the action bias

By Will Dinkel



In today's hyper-blogging, ultra tweeted world of early-stage ventures everyone has advice for aspiring entrepreneurs... and that is a problem. On our Silicon Valley IXP, thirty-eight Harvard students listened to advice from VC's, entrepreneurs, and advisors nonstop for eight hours a day for five days straight. While the speakers did deliver value, I was amazed by the sheer number of contradictions in their statements.

Just after listening to an entrepreneur tell us to, “take advantage of low-cost programming labor in Asia,” Ben Horowitz informed us that outsourcing development is a recipe for creating a “bag of crap” company.

In another instance, we were told that the best way to create a company is to, “build something that you yourself need,” and then later told to, “go out and find real world problems,” or to, “focus on pain killers not vitamins.”

And, perhaps the best one of all, we were told by a famous venture capital partner that we should, “never set out to start a company without an idea,” which flew directly in the face of the widely-espoused notion of “investing in people,” as endorsed by Y Combinator's practice of backing teams without ideas. 

I think one cause of this cacophony of opinions is that early-stage ventures is a very social field – one where everyone genuinely wants to help one another out, typically by giving advice. Additionally, personal brand building is a big part of the ecosystem, so everyone wants to have a presence and as a result there are probably more digital opinions than the quality thereof would justify. And consider the sheer ridiculousness of thinking “entrepreneurship” – a term that could describe literally any smallish, newish business – is any kind of cohesive field or discipline. When JP Morgan Chase CEO Jamie Dimon spoke on campus last year, he didn't say, “Everyone in finance, listen up. To be successful, you should hire only MBA's and outsource your cost centers to emerging markets labor.” Of course not, he would sound ridiculous.

My tips for combatting advice sprawl:

1.    Filter, filter, filter. Not all opinions should be weighted equally. Focus on informed/thoughtful sources of insight, avoid false prophets.

2.    Embrace your action bias. There is no better way to inform yourself than by actually getting your hands dirty and trying things out for yourself. Curious what you can get out of a contracted developer? Take some cash and hire one for a week. Want to know if your business model will work? Go try to sell your product, whether it exists yet or not. Do it today. And if the task feels unglamorous, that's a good sign that you're on the right track.



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