7 cognitive biases that every founder needs to get rid of

Human beings are prone to more than 100 biases that shape our behavior and inform our decisions. Becoming more aware of them is step one in engineering workarounds so you’re not misallocating resources and sacrificing your potential for success in the process.

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The following is an edited excerpt from Employee to Entrepreneur: How to Earn Your Freedom and Do Work that Matters by Steve Glaveski. The excerpt is provided by the author. You can buy a copy of the book here.

Human beings are prone to more than 100 biases that shape our behavior and inform our decisions. Becoming more aware of them is step one in engineering workarounds so you’re not misallocating resources and sacrificing your potential for success in the process.

I’ve chosen to zoom in on just seven cognitive biases that can stifle your foray into entrepreneurship and suggested how they might affect your efforts, offering workarounds for each.

1. Ambiguity effect

This is the tendency to avoid options where information asymmetry creates too much uncertainty.

“If you fail to plan, you plan to fail” is an old adage. A certain amount of planning is necessary for any venture. But overplanning in order to feel in control is something that traditional project management methods such as Waterfall, Prince2, and Stage-Gate teach us. Business cases are designed with this in mind to give decision-makers a sense of control and certainty. To feel in control is an innate human need.

The problem with this is that it supports pursuing only what we can reliably predict and see, and it doesn’t lend itself to taking something new to the world. To truly innovate and stand a chance of surviving in a constantly changing environment, getting better at embracing uncertainty is key.

Workaround: Get more comfortable with experimentation.

2. Anchoring

This is the tendency to “anchor” our opinions or ideas on the first piece of information we acquire.

This is notoriously common in run-of-the-mill brainstorming sessions, particularly where dominant personalities speak up first. What usually happens is everyone else anchors their ideas on the first “big idea” rather than coming up with new ones.

Workaround: To combat this, ensure people “work alone together” by first writing down their ideas individually, then grouping similar ideas and silently voting on them before finally engaging in a wider group discussion.

If you’re working alone, seek out conflicting opinions or ask open-ended questions like “How might you solve this?” rather than closed ones like “Do you think the solution I’m proposing is a good one?”

3. Backfire effect

This is the reaction to disconfirming evidence by strengthening one’s previous beliefs.

4. Confirmation bias

5. Congruence bias

6. Courtesy bias

7. Fundamental attribution error