[Guest post by Sanjay Anandaram, entrepreneur-turned-investor. In this post, Sanjay discuses behavioral traits of entrepreneurs, especially arrogance combined with ignorance.]
Everyone around the serial entrepreneur was telling him that they couldn’t see anything unique about the startup’s offering. Everyone was pointing out the various similar offerings already available in the market. They were pointing out technical, marketing, and business model problems but the serial entrepreneur was not listening. After all, hadn’t he sold his first company very profitably when all seemed lost? Of course, that his first company was acquired rather fortuitously, something that occurred through a chance meeting with a potential partner- not something that was consciously engineered.
One of the important traits of an entrepreneur is humility. But a humility that’s coupled with confidence. Humility allows the entrepreneur to learn from others while confidence permits him to go around meeting players in the network, weed out “noise” to distil the essence of the learnings, and make appropriate course-corrections but without compromising on the fundamental vision of the company.
While many entrepreneurs have perfected the art of interacting with “confident humility”, an unfortunately great number are trapped inside cages of their own making. These are the entrepreneurs who are convinced that their technology product or service offering is destined to change the world only because they think so. Their personality is stamped all over the startup. These entrepreneurs have blinkers on that impede the flow of market signals, limited understanding of the industry, market, customer needs and competitive positions. They are the ones spoilt by earlier success either in an earlier startup or in corporate life. Never mind what their specific contribution to that success was.
Taking a cue from their earlier experience, they think that lightning can indeed strike twice at the same place. They start believing that their PR releases are gospel and start discarding the cloak of humility. They start thinking they are invincible, that their companies are indeed making a huge difference to the world and are creating enormous value. Over time, they stop listening. They don’t read about what’s going on in their industry or meet people who are knowledgeable about their world. They rationalize their ignorance by saying that the world doesn’t yet understand their company. Over time, people around these entrepreneurs stop providing feedback since they don’t see anyone listening.
The entrepreneur now displays one of two behaviours: behaviour style one is to ignore or even dismiss all the signals from the outside world, work only with people who listen, use the halo of the success of the earlier startup to blind others into submission. Behaviour style two occurs where the entrepreneur’s demeanour changes to incorporate a studied intellectual indifference or nonchalance and indeed, sartorial tastes also change to showcase expensive branded accoutrements. They now go out only to conferences (including of course, press conferences), meet only people of “stature”, are unwilling to travel to rural and semi-urban areas of the market, and have their underlings meet the various industry players.
In both cases, the entrepreneur enters the twilight zone of “living in denial”. Arrogance replaces confidence. Discarding of humility results in ignorance. Increased ignorance results in a continued life of denial. Increased denial results in increased or continued arrogance.
A dangerous cycle, “Arrogance of Ignorance”, therefore comes into play. This feeds on the insecurities and the anxieties of the entrepreneur and those around him. It is not surprising therefore to expect such an entrepreneurial company to start imploding. Unfortunately, the implosion doesn’t occur in one grand finale. It is a process that’s painful as it drags on for several months as the entrepreneur clutches at fewer and fewer straws while still refusing to see the writing on the wall. This is emotionally draining for all concerned especially for those around the entrepreneur. For the entrepreneur himself, the learning from a failure is more than from a success. Failure forces introspection and encourages humility. If nothing else, there’s no arrogance of ignorance.
What do you think?
[The article first appeared in FE. Republished with author's permission]
Der Sanjay,
Only one humble question.
What do you think of Steve Jobs is he confident/arrogant?
How typical of a VC to stereotype entrepreneurs.
Blah, bad start of a day..
I think it is fair comment. History is littered with examples of leaders who have been afflicted with denial, delusion etc., often to their own detriment and that of their enterprise.
I was more interested on how a VC would handle this? How long would you persist?
@WTF: And how many steve jobs do we have? IMO, it’s okay to follow Steve Jobs, but it’s really important to be realistic!
I have met many entrepreneurs in TiE/Proto – who literally lived up with ‘arrogance+ignorance’ phenomena – they stop interacting with “real” users and instead, prefer to be with the “like minded”, i.e. another set of arrogant entrepreneurs!
Don’t wanna take their names – but the point sanjay is trying to make is very simple – “Listen More. Talk Less”
Ashish,
Point taken. “Listen more talk less.” Not sure the post conveys the point. It sounds more like mud slinging on some desi entrepreneurs by a big name VC. Or may be he had a bad day and then decided to write a blog ?
a post about arrogance smacks of arrogance how truly Indian:-)
Conclusion : if a vc is arrogant, it will be branded mentoring
If an entrepreneur does not agree with a vc s/he will be branded arrogant. Beware, entrepreneurs
If you can face failures and comeback as strong as Stve Jobs..be arrogant…or else be humility is the best policy..
Aren’t confidence and arrogance relative terms?.. What is confidence for entrepreneurs may be arrogance for VCs:-)
Siva
http://www.dhanax.com
What Sanjay is trying to point here is the “learning” arrogance of entrepreneurs – who start thinking that their idea can change the world and of course, their pocket$s too!
Infact, haven’t you seen established players moving away from consumers? because they were too confident of their own perspective on consumer needs – a typical case of closed ears?
In most of the cases people who tend to be arrogant and aggressive are mostly ignorant and there are a plenty of them
though there are a few exceptions eg. steve jobs
also one essential quality – being honest/crooked is missed in this beautiful article. so it should be like Confidence + Humility + Honesty or Arrogance + Ignorance + Crookedness
and there are also a great deal of combinations like someone can be Confident + Ignorant + Crooked haha I think I should go to bed
All, seems like a few have misunderstood/mis-read my post. Ashish, thanks for stepping in!
The point being made is that there are a great many entrepreneurs who don’t listen to customers, advisors, market signals. So consumed are they by their own invincibility. The post cautions against such behaviour while extolling the virtues of the many entrepreneurs who are “confidently humble”.
There are many VCs who are consumed by their own greatness (real or imagined) as well. What however happens is that VCs lose serious money in many businesses in a shorter time than do entrepreneurs. Learning not repeat mistakes is therefore something VCs are forced to do since one learns more from failures than from successes since it is very hard to pinpoint the reasons for success while it is easier to see the various wrong turns taken. The last para of the post alludes to this aspect of learning.
Sanjay, Sure thing. That’s one of the reasons why not many entrepreneurs can build stiff which masses adopt.
I guess we need that balance to keep the ecosystem running.
For example, great many VCs have no clue abt technology/business models but they still invest in things which “sound” cool like “Web 2.0″ /”Web 3.0″
No point telling some obvious facts like “India needs to build better roads” or everyone needs to “eat less exercise more to keep fit” it’s redundant information, and no value add IMO.
Guys Chill……..
Arrogance /humility /Confidence there is a place and time for each one of these emotion . my observation is that we need to stop being humble to the extent that wee don’t look aggressive go getter and shouldn’t be smoking too much of our own marketing pitch that we can’t acknowledge reality . rest is OK . No VC will deny a good deal if you are a little rough and no savvy founder will kill a prospective financing if VC is a lil preachy .
http://www.calacanis.com/2008/01/25/the-year-one-startup-handbook-how-to-identify-and-deal-with-the/
this can be a good read for you .
i will speak from an entrepreneurs point of view – the analysis is spot on – i have met lots of people in my life who have followed this pattern – (and it had nothing to do with VC’s ) .
My post about the MWC in Barcelona also details this fact. I do not know why we have a shift in attitude once we become remotely successful.
Its very easy to get these grand ideas in your head and start thinking you are gods gift to mankind.
Just dont forget where you started off from – thats my mantra..after that its smooth sailing.
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Arrogance /humility /Confidence there is a place and time for each one of these emotion . my observation is that we need to stop being humble to the extent that wee don’t look aggressive go getter and shouldn’t be smoking too much of our own marketing pitch that we can’t acknowledge reality . rest is OK . No VC will deny a good deal if you are a little rough and no savvy founder will kill a prospective financing if VC is a lil preachy .