Dangerous Human Behaviors Part II

What's up, everyone. This is Alex Lieberman, co-founder and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. Today, I am talking about two dangerous behaviors every founder must be aware of. Let’s hop into it. 

Dangerous human behaviors, continued

Okay, Founder's Journal listeners, let's just set the stage quickly. This episode is a follow-up to last week's popular episode on dangerous behaviors. For context, I have been reading the writings of a lot of venture capitalists recently, but specifically Marc Andreessen, who is a serial entrepreneur and arguably one of the most successful venture capitalists of all time. And in one of the essays of his, Marc breaks down a few mental models that were originally talked about by Charlie Munger. Charlie Munger is Warren Buffett's right-hand man. He's been with him for decades, and he's an incredible untrained behavioral scientist on top of just being obviously an all-time value investor. So you should definitely go back after this episode and listen to the first two dangerous human behaviors that I covered and how they impact career as well as startups. But I want to hop into the next two here. And what we're going to start with is something that Charlie Munger calls the disliking or heating tendency.

The tendency to dislike and hate

Very simply we compare and are jealous creatures. And what Charlie Munger says is that we are born to dislike and hate, and it's why history shows over and over examples of war. Now you can look at examples of dislike and hate and comparison at all levels. At the family level, we often see one sibling hating another sibling, at the education level, we hate the student that sits in the front of the class or can get straight A's just by cramming in information the night before, and at the professional level, we hate the person at work who just feels like they're always a little bit better than you, no matter how hard you try. So dislike and hate is natural, but the question is, what do you do with it, and how do you not let it control you and misguide you and cloud your judgment? And so what Marc Andreessen says about Munger’s original assessment is this natural bias to dislike and hate can be really dangerous within a startup, especially in the context of thinking about competition. Startups tend to over-focus on their competitors and it is destructive in two ways. First, by over focusing on your competition, it diverts your attention from the actually important shit that you should be thinking about. Instead of serving your customers, you start thinking about how can you damage your competitors. Instead of thinking about how do you expand your market, you focus on fighting your customers in too small of a market. And instead of having clear decision-making about what your strategy should be based on information, you form an emotional strategy based on what you're observing your competitor doing. Now, the second destructive thing here is by focusing on competitors and hating them, it makes you blind to both their strengths and their weaknesses. You look at them in envy because it feels like they have their shit completely together because it seems like publicly every decision they're making and move they're making seems the right thing to do to build their business. But what you're not considering or what you're discounting is everything that's happening behind the scenes that is messy and ugly in order to make things look pretty publicly.

So you only think about the things that you are doing personally that's messy and ugly behind the scenes, but you're not extrapolating it to your competitor. Now on the other hand, hate for your competitor can also make you discount your competitor’s strengths. If your natural bias is to say things like, oh, our competitor's product sucks, or they raise too much money, why did they do that? Or they're hiring way too fast, they must be burning so much capital, this clouds your ability to truly assess the risk that they present to your business. 

My take

So here's my take on Andreessen's take of Munger’s take: I totally agree with this hate-dislike thing. I think it is very human because at the end of the day, we are programmed to survive and in today's society surviving for many means belonging and belonging means being successful from society’s standard. And so when someone makes you feel like your position of belonging is jeopardized, your lizard brain or your ancient brain, it kicks in and you feel threatened. Now in terms of competition, I totally agree with Marc Andreessen, where he said that for the most part, for most businesses, giving oxygen to thinking about competitors is a huge waste of time. There are things that you should spend far more time thinking about, like your customers and where the business is going. I would say the only place where you should really focus or influence your strategy on, based on your competition, is in winner-takes-all markets, so especially those that are based on what I would call geographical land grabs. So if you think about businesses like Uber competing with Lyft, or DoorDash competing with Seamless, or Airbnb versus a local competitor, thinking about competition actually does matter there. 

The doubt avoidance tendency

Now I want to talk about the second dangerous trait that is innate to all of us, and that is the doubt avoidance tendency. So here's word for word what Munger says about doubt avoidance: “The brain of man is programmed with a tendency to quickly remove doubt by reaching some decision. It is easy to see how evolution would make animals over the eons drift towards such quick elimination of doubt. After all, the one thing that is surely counterproductive for a prey animal that is threatened by a predator is to take a long time and deciding what to do.” Now, here's how Andreessen adapts us to startups and career: He believes that the desire to remove doubt is part good for entrepreneurs and leaders. The reason he says that is because it is so important for you to have conviction and not have a lot of doubts about your strategy as a leader or a startup, because at the end of the day in an early stage business, everyone, but you is going to doubt you, so you can't be doubting yourself. But then he also shares how doubt avoidance is part bad for entrepreneurs if avoiding doubt turns into you being stubborn, which interferes with your ability to see reality, especially if things are not working out in your business and your strategy needs to shift. And he finishes by saying at the end of the day, entrepreneurial judgment is simple. It is the ability to tell the difference between a situation that's not working, but persistence and iteration will ultimately prove it out, versus a situation that's not working and additional effort is destructive and a waste of time and radical change is necessary. So said differently, how do you know when your business is fine and you just need to keep pushing versus when your business is fucked and you should cut your losses? 

My take

So here's my thought on doubt tendency, or doubt avoidance tendency: I think there's actually a piece of this that Marc misses, which is there is a difference between belief and knowing. And I think that Andreessen conflates the two. I think it is incredibly important for entrepreneurs or leaders of businesses to have belief or deep conviction in their plan, because there are going to be constant things like stakeholders, investors, the world, that tests their belief and try to shake them of their belief. But I think where Andreessen talks about the risk of avoiding doubt, I think what he really means is when people act like they know more than they actually do. And I just think these are different things. I think the optimal position for a leader or a founder is to both have deep conviction when they form views of the strategy or the world, but also be realistic about what they know and what they don't know, so they can call and help and reveal blind spots.

I want to hear from you

And so those are my two timeless lenses told by Charlie Munger through the lens of Marc Andreessen with two cents for me. So the first is that humans have a deep tendency to dislike and hate those that threaten their survival, and that shows up in career and business. And the second is that humans have a deep tendency to remove doubt quickly because doubt does not serve their survival, and that shows up as well in startups when you're in a really competitive landscape with people that are trying to beat you out. Now, quick ask before I stop talking and give you back your day: Please, please, please subscribe to Founder’s Journal and send the show to others that you think would benefit from entrepreneurship and career monologues that I do three days a week. As always, thank you so much for listening and we'll catch you next episode.