Stephen Shapiro explains how confirmation bias kills innovation. Entrepreneurs ignore warning signs and push forward anyway, contributing to the 70-90% failure rate of new ideas. He recommends hiring a devil's advocate whose only job is to find what's wrong.
Chapters
The other day I was at Mohegan sun, which is a casino about an hour and a half outside of Boston. And while I'm there, I love to speak to the gamblers because each of them believe they have a system. They believe they have a method to ensure that they win. And they're all convinced they've won more money than they've lost. Well, of course this is not true. Casinos are not in the habit of giving money out to people. The house always win. We know this to be true. Now this is an important concept for us to get, because why do people believe that they win more than they lose? It's something called confirmation bias. And confirmation bias is the brain's processing mechanism by which it finds evidence to support its belief structure. Whatever you believe, you will find evidence to support that and you will subconsciously ignore anything that refutes your belief structure. That's why we can have such powerful beliefs in spite of evidence to the contrary. This is very important for innovators. It's very important for innovators because every person is convinced they have a billion dollar idea. They've got the next big idea that's going to change the world and make them rich. But what happens is their confirmation bias only allows them to see the evidence that supports the belief that they have a great idea. Their brain doesn't allow them to see all the evidence that proves that it's actually a bad idea. And there's a reason why 70 to 90% of new innovations fail. It's not because these aren't well intentioned people or motivated people or excited people, but they're people who are people who have confirmation bias. And they will subconsciously ignore the evidence that proves that what they think is a great idea is in fact not such a good idea. As innovators, as entrepreneurs, as individuals, it's important to recognize this. Now how do we counterbalance this? It's difficult for us to find evidence that refutes a strongly held belief. So what we need to do is, when we're working on something, partner with a devil's advocate, find someone who will be the contrary point. Somebody whose sole purpose is to find evidence that proves your idea is a bad idea. Now, it may be hard to hear what that person has to say. You will want to reject what they have to say. But if you can open up your mind and be willing to hear the contrary points of view, you may be able to refine your product, refine your service, refine your idea, and come up with something that's better. Or you, you may learn it's just such a bad idea. You shouldn't invest the time and money in this one. Find a different one. This is really important for all organizations and individuals. Whether you're big or small doesn't matter, because let's face it, we know that every single gambler doesn't win more than they lose. And we know that every idea is not a great idea. The question is, what are you going to do to make sure that you invest your time and money and energy and the things that have the highest likelihood of paying off? This is Steve Shapiro. Until the next time.
