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If your startup succeeded, I wouldnt call it overconfidence. Still, if you subscribe to the lean startup philosophy your confidence should be based on cohort an

If your startup succeeded, I wouldnt call it overconfidence. Still, if you subscribe to the lean startup philosophy your confidence should be based on cohort analysis and data not gut feelings. In his book Thinking Fast and Slow he talks about the way we believe things. When encountering an idea our system 1 believes it automatically and than our system 2 considers the consequences of believing it and decides if you should UnBelieve it. They found that when system 2 is tied up or exhausted you are more likely to believe something thats false because your system 2 didnt consider unbelieving it. This is why late night commericials and infomercials worked so well. The danger you describe is in a case of uncertainty having confidence...Daniel Kahneman is talking about a case where you could know forsure but because of a cognitive bias you are overconfident without relying on statistical evidence which may be to the contrary.

kstenerud 11y ago
How can you know for sure? In the end all you actually have are probabilities. At the beginning of the incubator I attended, the estimated success rate of startups was less than 10%. By that rationale, I should have packed my things and gone home. And in fact, I agree with that rationale. I still can't believe I went through with it, much less succeeded. But without foolhardy people to take on these gigantic risks, we'd be FAR less developed than we are.
- davemel37 11y ago
  In the end we can only do the best we can with the information available to us. This is a warning to make sure you have the most accurate information possible instead of digging your head in the sand and hoping your blissful ignorance is like a blind squirrel finding a nut once in a while. Statistics cant prove anything! Thats his point. Dont be so confident that your mind is too closed to explore other possibilities. Scientific method can only eliminate possibilities and show you the most probable option. It is by no means proof. But thats a bad reason to not consider competing hypothesis instead of just trying to confirm an existing bias. Your point about incubator success is different. Those statistics are exactly the ones we want to avoid. Success or failure of a startup in an incubator is not diagnostic evidence as i can think of a dozen other hypothesis to explain those results. Its like a doctor saying you have strep because you have fever. Since fever is consistent with other diagnosis it has no diagnostic value beyond the point of saying you are sick.

kstenerud 11y ago

How can you know for sure? In the end all you actually have are probabilities. At the beginning of the incubator I attended, the estimated success rate of startups was less than 10%. By that rationale, I should have packed my things and gone home. And in fact, I agree with that rationale. I still can't believe I went through with it, much less succeeded. But without foolhardy people to take on these gigantic risks, we'd be FAR less developed than we are.

davemel37 11y ago
In the end we can only do the best we can with the information available to us. This is a warning to make sure you have the most accurate information possible instead of digging your head in the sand and hoping your blissful ignorance is like a blind squirrel finding a nut once in a while. Statistics cant prove anything! Thats his point. Dont be so confident that your mind is too closed to explore other possibilities. Scientific method can only eliminate possibilities and show you the most probable option. It is by no means proof. But thats a bad reason to not consider competing hypothesis instead of just trying to confirm an existing bias. Your point about incubator success is different. Those statistics are exactly the ones we want to avoid. Success or failure of a startup in an incubator is not diagnostic evidence as i can think of a dozen other hypothesis to explain those results. Its like a doctor saying you have strep because you have fever. Since fever is consistent with other diagnosis it has no diagnostic value beyond the point of saying you are sick.