Avoid the Echo Chamber Effect (and launch better products).
In the entrepreneurship course I teach at Stanford I advise my students to be careful of the echo chamber effect – the fact that our friends tend to echo-back how awesome our own ideas are. And so if you really want to get objective input on a startup idea you need to step out of your personal echo chamber and solicit feedback from people who are not your friends.
It's a normal part of human existance – we naturally surround ourselves with people who we like because they think like we do. It's why every dinner party I go to seems to end up in a Republican-bashing fest. My friends are all bleeding heart liberals. I like them that way.
A few years ago, I was working on an idea for a startup and I went to see my friend David Carlick. David had recently become a partner at a large venture capital firm after having worked in the advertising business for many years. I shared my startup idea with David – he absolutely loved it, and the more we talked the more excited he became. By the end of the meeting we were practically high-fiving each other.
He called me the next day and said they were prepared to make a $5 million initial investment. But, just as a formality, he needed me to come back and meet with one of the other partners.
That second meeting was a disaster. The other partner hated the idea. Every slide I showed caused him a roll his eyes as he pointed out the flaws in my business model assumptions. He lobbed verbal granades at me for an hour, and I did my best to withstand them, responding to his concerns as best I could. At the end of the hour he stood up, shook my hand, and said “well, we're looking forward to working with you”.
Huh?
Carlick told me later that this was their normal process. One partner fell in love with a startup idea, and the other partner then tried his best to shoot it down. The ideas which survived this process were worth investing in.
They issued a term sheet the following week.
I was thinking of this story last night as I read MG Siegler's excellent TechCrunch post on how every company should have a VP Devil’s Advocate. Someone whose specific job is to try to shoot ideas down. Someone charged with the responsibilty of making sure that group think never takes over the decision of whether to launch a new product.
Seeking input from someone you like is easy. Seeking input from someone who may tear your idea apart is hard. But in my experience, stepping out of your comfortable echo chamber will usually result in better decisions and better products.