It is not uncommon to spot founders who express scepticism or aversion towards professional advice intended to help their companies grow and navigate their competitive landscapes. These founders have a strong sense of attachment to their own capacities and they tend to only take external or third-party advice with a grain of salt.
Analysts have termed this behaviour in founders and business leaders as hubris. Hubris has been found to be a major source of pain and, in extreme cases, downfall of many companies.
Without intent to morally justify or rationalize the behaviour, Marvin Liao, Silicon Valley Venture Capital and Big Tech analyst, explains in his article the reasons most founders often find it difficult to follow good advice.
He starts by saying this: ‘’Most advice is not good. I admit that. Most investors don’t know what they are talking about. Most founders give very industry or stage specific advice that is out of context.’’
However, Marvin finds it disconcerting that some founders remain adamant about their self-conceived knowledge even though they could leverage broader and more quality insights of highly experienced and well-meaning advisors.
‘’But due to the depth of knowledge and experience here in Silicon Valley, there are many high quality people who do give great advice. Credible people giving credible advice.
‘’Yet most founders still tend not to follow good advice given by credible people. People who usually only want the best for their mentees’’ Marvin said.
‘’I spent 6 years running one of the top global accelerators in the world, running 12 programs with over 370+ founders, I used to get really annoyed when we would share best practices in fundraising, or customer acquisition or hiring and firing and have it all completely ignored.
‘’But I have come to accept that this will always be the case. My hypothesis? Even if your advice is correct, there are good reasons why they will not take it,” he added.
Reasons founder often find it difficult to take professional advice are explained as follows:
- They have to learn the hard way: Not all knowledge can be read in book or handed down to us by a more experienced person. We have to have direct or first-hand experience with some things in real life. These things make up our “experiential knowledge” noted Marvin.
- Things do not fit into their logic or current worldview: Marvin use the term ‘’cognitively dissonant’’ to express ideas that appear so complex to founders that they don’t understand it or they choose to not rack their head around it. ‘’This often occurs because it breaks their worldview and it’s too painful or just does not fit with what they believe.’’
- Overconfidence due to a history of struggle and winning: When founders are able to build a successful business from the scratch, they tend to ‘’think they are exceptional to rule’’. Marvin argues, the journey of a founder is very hard, thus it’s highly irrational. ‘’You need to have a little bit of naivety and or delusion to be a founder, otherwise you would never start. This leads you to think you are unique and different so that the best practices don’t apply to you.’’
But in all 3 cases, Marvin remarks the market really always educates you quickly and painfully. ‘’This is no different than when growing up and you used to ignore your parents advice because you think you know better. It’s something that can only be learned with time and experience,’’ he said.
Marvin Liao is an investor, operator, executive coach, conference keynote speaker with strong opinions and perspective on Venture Capital, the Technology and media biz. He is a Silicon Valley Startup and Big Tech practitioner.
