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I think this is debatable. Let P = group makes better decisions than individual Q = there’s no downside to everyone making the same decision P &&

I think this is debatable. Let P = group makes better decisions than individual Q = there’s no downside to everyone making the same decision P && Q => yay groupthink ~P && Q => could go either way P && ~Q => could go either way ~P && ~Q => groupthink is bad I think we have pretty good evidence of ~Q though, and P isn’t obvious. Was SVB better than throwing a dart at a picture of major banks? I can believe it, but I haven’t heard a substantive reason. P.S I mean for “not obvious” to be load bearing. Upthread, someone says SVB is much easier to work with for founders. If so, maybe it was a reasonable decision. But if so, that’s on the merits (aka P && ~Q).

simonw 4y ago
I'm not saying SVB was better than a major bank (it looks like it wasn't). I'm saying that, had this situation not happened, defaulting to "what bank do other companies like us use?" would have been a perfectly reasonable strategy.
- hyperpape 4y ago
  If you stipulate the risk of concentration away, I agree that groupthink is fine here, but I think you shouldn’t stipulate that away. Also, I’d really say that founders probably weren’t the ideal people to be thinking about this risk, VCs were. If you advise a portfolio of companies, you’re better positioned to think about broad risks.