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Unit Economics

To Be a Great Leader: Have the Courage to Be Stupid

It's a well known maxim in the venture capital community that entrepreneurs from outside any given ecosystem are often those most likely to disrupt it. Because they are unconstrained by conventional industry thinking, they more easily conceive new solutions. Look no further than recent history for a few examples:

  • What did Elon Musk know about cars or rockets?
  • What did Jeff Bezos know about selling books online or e-commerce as a whole, for that matter?
  • What did Steve Jobs know about phones?

The answer to all of these questions is identical: not much, candidly.

No matter!

These entrepreneurs had a dream, a mission, and an insight that they relentlessly pursued. More, their near-delusional belief in themselves drove them to eventual success.

In fact, longtime industry immersion often serves as a bright red flag to investors.

When you conceive of a startup in a market outside of your expertise, you necessarily lack a full understanding of the industry. But one of your great strengths may be applying your knowledge from one particular sector to disrupt another. For example, one’s deep knowledge of AI might enable outright disruption within the auto industry—such as is occurring with the development of autonomous vehicles. This approach of using concepts from one space and applying them to another is one of the most powerful tools entrepreneurs have.

More tongue-in-cheek, if you are an expert in AI but not in car manufacturing, an automotive professional might see you as stupid. They will often look at you quizzically after your description of the unmet need and your solution and say “It’ll never work.” Far from a liability, this is veritable asset! Recognize this and accept it. Internalize and embrace your role as an industry outsider. Allow yourself to seem stupid—to yourself and yes, to other team members. Know that this is a strength, not a weakness.

There is tremendous power in the knowledge and expertise derived from an unconventional background. More than that, one must believe in oneself and in one’s ability to learn.

Giving yourself permission to appear stupid gives you and your team the ability to pose the open, vulnerable questions that lead to learning, challenging convention, and creating breakthrough solutions. Ironically, most of these questions will be those that other, “more tenured” people were afraid to ask. Eventually, by delving deeply into first principles, you and your team will become knowledgeable beyond anyone else’s understanding of a given subject.

To be successful in creating new ideas, you need to understand the nature of a subject so deeply that you can discover what is truly possible and what is impossible. This depth of understanding helps you also understand whether criticism is accurate or misguided. If your understanding is accurate, it enables you to iterate on your idea, and if it’s wrong, to give you self-confidence.

Don’t be afraid to question everything, no matter how trivial it seems. If you are considering designing a car, just as a simple example, don’t hesitate to question, “what is a car? What is its purpose? Does the car need a driver? Does it need a steering wheel? Does it need a drivetrain? Is it allowed to drive on the road without a driver?”

When you want to embark on any meaningful initiative, you—like any normal human being—will have your fair share of doubts.

Doubts are good.

Doubts resemble the arms of a compass; that is, they are the brain’s way of helping discover the path you will take and the difficulties you might need to overcome.

Doubts drive you to learn.

If you have no doubt, you aren’t listening and are missing opportunities. If your competitors have no doubts, they are highly vulnerable!

Doubt everything! It will give you insight into what is really true.

Dive deeply into subjects.

Challenge every idea.

Listen to your customers and doubt the status quo.

You will find that you and your team are unleashing your creativity and learning more than you ever expected. Your ideas will be more prolific, more challenging, more exciting and more insightful.

Never allow anyone to make you believe that you are wrong unless you yourself understand and agree with their critique. Eventually, you will become more knowledgeable about your venture concept’s unmet need and solution beyond anyone else’s.

Do you have a personal story where you experienced this directly? Have a counter argument? Have a question? Tell us in the comments, or reply on Linkedin or Twitter!

Note: this article includes contributions from Jeremy Burton, Tim Connors, and Tom White.


Jeremy Burton core team
about 1 year ago

Founder / CEO @ Platform Studio

Anecdotally, this matches my own experience. I don't think Wonolo would have succeeded if we had come from the staffing industry. I don't think we would have asked the fundamental questions like "what's the point of a resume and an interview if the job you're applying for involves a task anyone can learn with 30 mins of training?" and "what attributes are actually predictive of a warehouse worker's performance?".

However, I also think it's dangerous to confuse anecdote with actual data. Has anyone studied this phenomenon in a rigorous way? Is there perhaps a large number of startups founded by people who spotted the unmet need only because they were immersed in the area at, say, Google and then started a company to solve the unmet need before Google themselves got there?

about 1 year ago

VC-in-Residence @ Platform. President @ Winarsky Ventures

I agree that the data is anecdotal. Would be great if some researcher would study this problem. My guess is that the "unicorn" type company will come from outsiders, and the "middle of the road" type company might be from people immersed in the area. I know some profs at Stanford that might find this an exciting idea.

about 1 year ago

about 1 year ago

VC-in-Residence @ Platform. President @ Winarsky Ventures

Thanks Joel. Very informative.

Tim Connors core team
about 1 year ago

Founder, MD @ PivotNorth Capital

@Curtis Wong is an interesting blended example. domain expertise + is bringing innovation in mechanical and fluid alignment systems from SpaceX to apartment construction.

Tim Connors core team
about 1 year ago

Founder, MD @ PivotNorth Capital

@Daphne Carmeli is a great example. was super innovative in logistics because she didn't come from that industry, building a company that Target acquired that is revolutionizing how they marry ecommerce and stores.

about 1 year ago

VC-in-Residence @ Platform. President @ Winarsky Ventures

Norman Winarsky

Jul 20, 2022  - 308 views

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