Today on The Startup Chat, Steli and Hiten talk about how to notice your own bias.
As humans, it’s natural for us to have biases in different ways. However, not noticing these biases can be detrimental to us and cause us to make bad decisions in business and in life in general.
In today’s episode of the show, Steli and Hiten talk about the importance of noticing your own biases, examples of how people can be biased, how people can be irrational during uncertainty and much more.
Time Stamped Show Notes:
00:00 About today’s topic
00:36 Why this topic was chosen.
01:31 The importance of noticing your own bias.
02:32 Examples of how people can be biased.
04:16 How people can be irrational during uncertainty.
05:09 How every prediction can be right at some point.
06:34 How people don’t like to uncertain.
08:40 Examples of how people can be irrational.
09:13 How people can be unhelpful with their bias.
10:04 How biases can be a defense mechanism against being wrong.
3 Key Points:
- Noticing one’s bias is sort of a superpower
- There’s irrationality that comes up when we have uncertainty.
- Every prediction can be right at some point.
Steli Efti: Hey everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah.
Steli Efti: And today on The Startup Chat we’re going to talk about how to notice your own bias and how to ensure that you don’t make bad decisions because of a rigid internal bias that you might have. The reason why we wanted to talk about this, at a prior episode we were just talking about how to negotiate with oneself and we had shared a little bit about this idea that the one thing that I recently noticed of people wanting to believe something because of self-interests and then trying to selectively find the information, the experts, the articles, the data that confirms their bias and continuously defending their mind against everything that would attack their thought process and collecting the things that confirm that thought process. And how big of a waste, to me that seems such a… I mean, we always do this, but right now it’s such a heightened environment that I just notice this so much and just… I’ll give you one quick example and then let’s talk about this because noticing one’s bias, I feel like, is a superpower in avoiding making avoidable mistakes.
Hiten Shah: Absolutely.
Steli Efti: One thing that was really interesting at, I don’t know, maybe six weeks ago or so, five, six weeks ago when we were in the Western world in Europe and the U.S. Much earlier in the pandemic timeline. And it seems still very far away, like a problem that was in Asia and in China and maybe there are a few, a couple of cases in Germany, a couple of cases in the U.S. But there were still a lot of debate of it would ever become a problem in the Western world. I remember talking to a friend of mine in the U.S. And then I remember talking to a friend of mine in Germany. What was interesting was how both of them, my friend in the U.S. Was like, “Well, I’m sure I’m in the U.S., I wouldn’t want to be in Germany right now because…” I was like, “Oh, why is that?” “Well, if a pandemic would happen, I’d much rather be in the U.S. Than in Europe or Germany.” And I said, “Oh, why is that?” He was like, “Well, the U.S. Healthcare system is really amazing and it’s not as population dense and…” He brought up a number of reasons why. He was like, “You know what, I feel pretty safe, this is probably around the world, not the worst place to be at a pandemic and Germany would be much worse.” And then I talked to my German friend a couple of days later, without prompting it, he was telling me, “Well, I’m glad that you’re in Germany, Steli, right now and not in the U.S. Because you’re much safer here if there’s a pandemic.” I was like, “Really? How?” He was like, “Well, you know the German healthcare system, much better than the U.S. Healthcare system, it is a catastrophe. Then the politician…” And I was like, and that was the moment where I was thinking, “Wow, we are all so full of shit and everybody’s-
Hiten Shah: Yeah, either way.
Steli Efti: … Trying to convince themselves that their situation in this setup is probably going to be better than other people’s.” I’m like, “Holy fucking shit. This is so interesting.”
Hiten Shah: No, and I have a good friend and she’s… Basically maybe every two or three days, she’s like, “Should I get out of the city?” She lives in San Francisco. She’s like, “Should I get out of the city? Should I get out of the city? My friends in New York have gotten out of New York.” I’m like, “Yeah, but that’s New York.” Then she’s like, “Yeah, maybe a small city, of course. There’s more stuff here, more hospital, et cetera.” I’m like, “Yeah, sure, okay.” I don’t know what to say, right? There’s no right answer to her thought, right? There’s no like… I wanted to tell her, “Hey, don’t go anywhere. Please just don’t go anywhere. Don’t do anything. Just stay where you are. Everything will be okay just stay where you are.” You know what I mean?
Steli Efti: Yeah.
Hiten Shah: It’s going to be okay. Okay, in the sense of like, it’ll be the best it can be, right? It’s same thing, it’s like there’s a irrationality that comes up when we have uncertainty. And when we have that irrationality and that uncertainty, we’re trying to justify that we know what to do. And in a situation like this, the number one thing I can tell you is nobody knows what to do. And if you think you do, you’re already bias. Because the level of clarity for our situation does not exist. There isn’t somebody who can tell you today and has any kind of crystal ball on this. You can’t say, this is what’s going to happen next. And you could even think that, “Oh, this person, they predicted what was going to happen or this and that.” But it’s like, every prediction can be right at some point. It’s just a matter of… What I mean by that is even people who seemingly are right, they didn’t know anything. They’re just guessing too. I think it’s like you’re making it up as you go. And the level of comfort we have as humans, on making things up as we go is very low. And so, this whole thing about Germany or America, whatever, wherever you are, there are people that are okay, literally, and there are people that are not. And in some places there’s more people that are not okay and they are like… If you ask me right now, I’m kind of worried about Florida to be honest. The pictures I see, the things I see. That being said, I don’t know if that matters, right? I don’t know if that’s rational or not. All I know is that there’s people out and about and they might be spreading these thing to each other. Now, is that factual? Yeah. Do I need to have a fear for my friends in Florida or anything like that? Probably not because whatever’s going to happen is literally going to happen. So, a lot of this has to do with just the acceptance that we controlled nothing.
Steli Efti: I think-
Hiten Shah: And this pandemic helps us do that, yeah.
Steli Efti: Sorry about interrupting. I think there’s an insane level of discomfort with the thought, “I don’t know and I’m still figuring it out while I’m trying to figure it out or…” Just like people don’t like to be in the, “I don’t know what’s going to happen or I’m not sure which side to take yet.” This friend of mine. And then they come up with these narratives. The other thing that’s been so interesting, it’s so interesting to see for me is that there are all these people that I know that, in hindsight, are changing the events in their life to fit a narrative that they’ve been hyper prepared or they saw this coming.
Hiten Shah: Really?
Steli Efti: Yeah. I had a friend that in the beginning of the January, he took a big loan. He has an E-Commerce business that’s doing quite well and then he took out a big loan to have extra cash. But back then I remember him telling me that his margins are not high enough and he might want to invest more in having just more stuff in stock. And so he felt he needed some cash cushion. And then now his story is that he knew hard times are coming, he didn’t know about the pandemic. He knew an economic downturn might be coming, our hard times might be coming. And he’s done everything right. Look at him, he has already some cash in the bank and he’s prepared for the downturn. I’m like, “That’s so interesting. Four months ago you told me something else.” But now he made these little edits in his own mind to fit a different narrative, to fit the narrative. I was ahead of the curve and I was prepared, right? I have told the brothers, both of them I love, but they’re idiots at times and my oldest brother is into some weird conspiracies at times. And I remember, I don’t know, two years ago we had a discussion, he was saying, “The population of the world, they can’t grow forever and eventually something needs to happen to do population control and who knows.” And now he’s like some degree convinced that this might be a government thing to do population control. All the old people die, right? This is, to me, thinking about everything that I’ve ever thought, to me, it’s such an obviously childish way of thinking about the world. How can I make myself feel like I’m smart or I was prepared? Why saw this coming? As if that is helpful, to me that’s not helpful at all. If I was walking around… I don’t know, what would… And saying, “You know, I started a remote company because I saw this company.” Like what the fuck? Right?
Hiten Shah: Yeah. That’s how I started.
Steli Efti: Yes. They always started it or even just like, “I knew that we have to be location independent and so, I’m so happy that five years ago I already did this.” First of all, even me thinking of a version of myself saying this, I’m like, “I want to punch myself in the face.” I’m like, “Shut the fuck up, you hassle.” Right? It’s A not true at all, and B it’s not helpful. Who would I help with? If I called my brother and be like, “Ha, you have local stores? I run a remote company, I was so smart.” How is this helping anybody? This is just, to me, it’s just dumb bragging or trying to convince myself that I’m smarter than I really am, right? That I’ve done something smart or was prepared or was ahead of other people when in reality I wasn’t.
Hiten Shah: I think it’s just a defense mechanism, right? It’s a defense mechanism when we have no control. All we’re doing is defending ourselves against being wrong, defending ourselves against something we don’t control, something we have complete lack of control over… A pandemic like this, we don’t have any control over it. There’s only maybe a few things we can do depending on who we are and what our capabilities are that might help. But at the end of the day, the world is in upheaval. There’s a tremendous amount of uncertainty and this is the time when people want us to feel, even in some resemblance of control, and there is none. You’re not going to get it. Good luck trying to find it right now.
Steli Efti: Good luck if you find it right now, I love that. All right, we’ll wrap up this episode on this point. If you have… You know what, maybe this is a weird call to action, but if your family has been especially point of frustration or weird lessons learned over the past couple of weeks, it surely has been mine, send me an email and Hiten, firstname.lastname@example.org, email@example.com. Tell us how you’ve learned new things about your family during this pandemic or they show you patterns that you now are determined to surpass, improve, or change. I find that with most people that I talked to, the number one source for worry and also the number one source of interesting things that are going on that they notice, it’s much more that families at this point than it is yet the global markets or politics or an industry or customers, lots of people are telling me stories about their family members and what’s going on with them right now. Super, super interesting. All right, this is it from us for this episode. Stay safe and we’ll hear you very soon.
Hiten Shah: Later.