Bad decisions by inventors and entrepreneurs are often due to wrong assumptions
BY WILLIAM SEIDEL
At the root of all failure is one common denominator: bad decisions.
Bad decisions come from bad information. And bad information comes from assumptions, free advice and no knowledge of the product, business or customer.
You can’t make the right decisions with the wrong information. Bad information is everywhere, hard to recognize and impossible to avoid.
This isn’t new. This comment is attributed to Mark Twain in 1897:
“If you don’t read the newspaper, you are uninformed.
“If you do read the newspaper, you are misinformed.”
Every article, ad and impression are meant to influence and persuade. The only news not planted are sports scores, stock prices, weather and the date.
There are hundreds of reasons ideas don’t work and why startups fail. Lack of capital, incorrect pricing, poor management, no plan, or just a bad product are common reasons—just not the principal cause.
Bad information is responsible for 80 percent of startups failing in the first five years, per the Small Business Association, and over 99 percent of new products failing. Compound this with hearsay, unknowledgeable opinions and myths, and it is nearly impossible for the novice to succeed.
A worldwide crisis
Being misinformed is common and often innocent, inadvertent or a simple mistake. It usually comes from myths and rumors that never die.
There are many things we believe that are simply wrong. There is no dark side of the moon; it should be called the far side of the moon. Twinkies have a shelf life of 45 days—not decades, as commonly claimed. Thomas Crapper did not invent the flush toilet.
Misinformation causes people to believe the wrong information and can destroy a business, a project and friendships. Consider what misinformation can do to your credit report, medical records and insurance rates.
Unfortunately, anyone well connected can broadcast unfounded opinions and falsehoods while claiming to be an expert when they are not. Unfounded opinions are the biggest source of misinformation, leading people to the wrong conclusions and the wrong decisions.
Disinformation and malinformation are tools for fraud used to lie and deceive. They are orchestrated campaigns to spread untruths beneficial to the perpetrator.
This is a worldwide crisis. The Department of Homeland Security tried to label questionable speech as misinformation, disinformation or malinformation.
Proven in many courts, this is harmful content used to discredit reputable sources as false when the opposite is true. The term “fake news” was used to flag sensational newspaper reports in the 1890s. The
purpose is to discredit opponents, governments or businesses.
Go to trusted sources
Being uninformed can be corrected with education and trusted sources. The best sources are inside information from industry professionals who know the ropes. There are also many trusted services from universities, business incubators and the do-it-yourself Maker Movement.
Some schools are all in, like the Stanford Launchpad and the Case Western Think Box. This instruction is for all disciplines to develop and launch products and businesses. This is where inventors and wantrepreneurs get guidance from successful entrepreneurs, clarity from the sciences and humanities and collaboration from peers.
Business Incubators are enormously successful, with 87 percent of new businesses from incubators succeeding. They provide valuable planning, operational management, financial guidance from experienced professionals, and the space to experiment.
The Maker Movement is doing the same for the tinkerer, inventor, engineer and the crafter that the incubator is doing for startups.
With 1,400 makerspaces, makers add an estimated $29 billion annually to the U.S. economy—with millions attending over 200 Maker Faires worldwide (pre-COVID). You can get help to develop a prototype, get limited production and assistance with funding.
The emotion trap
Recognizing misinformation, disinformation and malinformation allows you to reject it.
Mental shortcuts are routinely used to understand what happens around us. Shortcuts save time and work but often result in incorrect information.
During the pandemic, the scientific process was routinely shortcut and misrepresented, costing thousands of lives.
In the Google world of today, it is pretty easy to get quick answers. This is a great shortcut tool but can also be wrong. It’s the old software adage of “garbage in, garbage out.”
To get quick answers, we use rules of thumb (I call them ROT). It may be a shortcut but usually incomplete and likely wrong for your specific project.
Shortcuts lead to assumptions—and you know what that means (an ASS of U and ME).
Emotional reasoning justifies or defends a conclusion we have drawn based on our emotions. Feelings are just feelings. They can lie to us and lead us to the wrong conclusions.
We want to believe that we reason out our decisions, but they are often made by our feelings: “Go with your gut!” “Trust your hunches.” “Rely on your intuition.”
It’s fine to trust your gut when it is balanced with facts and experience. For authorities and experts, their gut is better than yours because they insist on having the facts on their side.
Ignore the influences
Maintain objectivity! The primary message in my marketing classes is, “leave your opinions at the door.”
Most inventors simply can’t detach from their idea. We surround ourselves with like opinions that confirm our opinions. This is called the Confirmation Bias—the tendency to seek information that supports what we already believe. We also tend to ignore or discount messages that disprove our opinions.
Most of everything around us is meant to influence us. The beauty of the scientific method is that it’s a process for truth while discrediting what is false.
Seek the best sources for the best information. An education in the industry is valuable. Trusted sources such as universities, incubators and industry insiders can be a great help. The best is to know the
customer, the competition and their strategy.
Your competition and companies with similar products are making money. You need to know what they know—a Herculean task.