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It's tricky though, you often can't tell if you are in the survivor set or not until after all those attempts at perseverance. Its easy to assume that after N f

It's tricky though, you often can't tell if you are in the survivor set or not until after all those attempts at perseverance. Its easy to assume that after N failures the company is not in the survivor set, but you can never actually know. So without perseverance, no one would be a survivor.

yrechtman 4y ago
OP here. I think i mixed the message too much by putting pivots in the same category as founder transitions and down-rounds. Pivots are fine. But when you're basically just starting over on a completely new business with less money and a demoralized team, your likelihood of success is significantly impaired. Successful pivots need to carry ~something~ over of value
- ncmncm 4y ago
  Yes. Letting them start over on something completely different is indulging sunk-cost fallacy. People were hired on the strength of being able to build X. If they are not who you would have picked to build Y, then getting them building Y anyway means you start out with a broken leg.
  - skybrian 4y ago
    On the other hand, if the team works well together, maybe they would actually be good at building something different? It seems like this will vary significantly depending on the team and the new plan. How valuable is it, really, to keep this team together?
    - ncmncm 4y ago
      As investors, we have no more knowledge of how well the team works together than that they failed to build what the market wanted. That is their only track record as a team.
      - skybrian 4y ago
        It's true that from the outside view, we know very little. Insiders may disagree, though.
  - dasil003 4y ago
    Not sure about this, it's very contingent on the specifics of X and Y as well as how specialized the hires were. Obviously it depends on the domain, but I definitely bias towards generalists of the Joel Spolsky variety (ie. "smart and gets things done") versus loading up on specialists early as it can often constrain the thinking in a way that hampers exploration when you're trying to find product market fit.
  - diplodocus1 4y ago
    that's not really sunk cost fallacy? sunk cost fallacy in that case would be not pivoting when it's the best move looking forward, because you already spent so much time building and hiring for x (i.e. the sunk cost, which if not falling into the fallacy you should be ignoring for that decision)
    - ncmncm 4y ago
      You spent a potful of money, and got nothing. You can give the same people another potful of money, or give it to somebody else who demonstrates actually delivering something of value. Only sunk-cost fallacy says to give the former, exactly, another potful. They should get back in line with everybody else.
ineedasername 4y ago
That just amounts to never cutting your losses & throwing good money (or time) after bad. The fact that it's a difficult decision with risks of being wrong either way is not a good reason to avoid making it. If you're going to choose perseverance it should be a reasoned choice, not the result of inaction due to uncertainty in the face of a difficult choice. Before "move fast & break things" became the slightly misguided mantra for SV the message was often wisdom, much more tempered by decades of startup culture, was "fail fast and move on". Most will fail. If the only thing you have left is vague hope and a willingness to work hard and very little else then it's best to put that optimism and work ethic into a course of action where the preponderance of evidence doesn't already point towards failure. Of course it's a balance, but don't be afraid of making a decision just because it isn't an easy one to make.

yrechtman 4y ago

OP here. I think i mixed the message too much by putting pivots in the same category as founder transitions and down-rounds. Pivots are fine. But when you're basically just starting over on a completely new business with less money and a demoralized team, your likelihood of success is significantly impaired. Successful pivots need to carry ~something~ over of value

ncmncm 4y ago
Yes. Letting them start over on something completely different is indulging sunk-cost fallacy. People were hired on the strength of being able to build X. If they are not who you would have picked to build Y, then getting them building Y anyway means you start out with a broken leg.
- skybrian 4y ago
  On the other hand, if the team works well together, maybe they would actually be good at building something different? It seems like this will vary significantly depending on the team and the new plan. How valuable is it, really, to keep this team together?
  - ncmncm 4y ago
    As investors, we have no more knowledge of how well the team works together than that they failed to build what the market wanted. That is their only track record as a team.
    - skybrian 4y ago
      It's true that from the outside view, we know very little. Insiders may disagree, though.
- dasil003 4y ago
  Not sure about this, it's very contingent on the specifics of X and Y as well as how specialized the hires were. Obviously it depends on the domain, but I definitely bias towards generalists of the Joel Spolsky variety (ie. "smart and gets things done") versus loading up on specialists early as it can often constrain the thinking in a way that hampers exploration when you're trying to find product market fit.
- diplodocus1 4y ago
  that's not really sunk cost fallacy? sunk cost fallacy in that case would be not pivoting when it's the best move looking forward, because you already spent so much time building and hiring for x (i.e. the sunk cost, which if not falling into the fallacy you should be ignoring for that decision)
  - ncmncm 4y ago
    You spent a potful of money, and got nothing. You can give the same people another potful of money, or give it to somebody else who demonstrates actually delivering something of value. Only sunk-cost fallacy says to give the former, exactly, another potful. They should get back in line with everybody else.

ineedasername 4y ago

That just amounts to never cutting your losses & throwing good money (or time) after bad. The fact that it's a difficult decision with risks of being wrong either way is not a good reason to avoid making it. If you're going to choose perseverance it should be a reasoned choice, not the result of inaction due to uncertainty in the face of a difficult choice. Before "move fast & break things" became the slightly misguided mantra for SV the message was often wisdom, much more tempered by decades of startup culture, was "fail fast and move on". Most will fail. If the only thing you have left is vague hope and a willingness to work hard and very little else then it's best to put that optimism and work ethic into a course of action where the preponderance of evidence doesn't already point towards failure. Of course it's a balance, but don't be afraid of making a decision just because it isn't an easy one to make.