Friday, December 19, 2014

Entrepreneurial Blindness and Bad Origami

Have you ever watch the show Shark Tank?  Entrepreneurs present their ideas to a panel of successful investors.  Often the ideas appear to have at least some potential.  But occasionally, the ideas are downright awful.  Yet the entrepreneur believes in it with all his heart and "knows it will be successful one day" despite what the experts say.  How is it that the entrepreneur could believe so blindly and so strongly in an idea that everyone else thinks is terrible and will never fly? I know I've done this.

Let's turn to behavioral economist Dan Ariely for an explanation.  In the following TED talk, starting at the 11:50 mark, Dan explains about an experiment where he asked people to make origami.

After they finished, he had the creators estimate the value of the origami that they had just made.  He then had another person judge the same piece of origami and put a value on it.  None of the creators were experts at origami and had to work hard to create even a poor example of origami.  Despite the ugliness of their creations, the creators put a high value on what they made.

The other people who were simply judging the pieces of origami gave them a lower value.  The people judging them saw them for what they were, poorly made origami.  The creators, on the other hand, overlooked the fact that they were poorly made and put high value on them because they had put effort into making them.  We tend to value things that we have put a lot of effort into.  Even if they are of no value to someone else.

As entrepreneurs and creators, are we making something of value to other people?  Or are we just making poorly made origami that we think is valuable and that we think everyone else should see as valuable, just because we put so much effort into it.

The tricky part is being able to take a step back and put aside how much effort you have put in and figure out if your product has actual value.  I like to follow the advice of Steve Blank and "Get out of the office" and talk to customers.  This will quickly help you to understand the value that others see in your product.  If you cannot take this step back and figure out if you have something of real value, you may waste time and money on something that may never go anywhere.  And the more you invest, the more you'll feel like it has to work.  It has to be successful.

People don't care about how much effort you have put into a product or idea.  People buy something when its of value to them.