Latest Episodes

Continued Influence Effect Some investors will hold onto their preconceived notions even when presented with corrected information. For example, a startup positions their company as providing a service but they don't mention they have recurring revenue. Recurring revenue shows scalability while service businesses typically do not. Even after the investor…

Courtesy Bias Courtesy bias is a cognitive bias defined by Wikipedia as the tendency to give an opinion that is more socially correct than one's true opinion, so as to avoid offending anyone. Courtesy bias arises when an investor tells the startup what they think the startup wants to hear…

Base Rate Fallacy The base rate fallacy is a cognitive bias defined by Wikipedia as the tendency to ignore base rate information (generic, general information) and focus on specific information (information only pertaining to a certain case). One-off sales to specific companies while helpful do not define the startup's growth…

Bias Blind Spot The bias blind spot is a cognitive bias defined by Wikipedia as the tendency to see oneself as less biased than other people or to be able to identify more cognitive biases in others than in oneself. All investors have blind spots and biases. Investing in experiences…

Confirmation Bias Confirmation bias is a cognitive bias defined by Wikipedia as the tendency to search for, interpret, focus on and remember information in a way that confirms one's preconceptions. Investors bring their recent investment experiences to fund new startups. If the investor recently lost their investment in a deal…

Availability Heuristic The availability heuristic is a cognitive bias defined by Wikipedia as a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.  The availability heuristic operates on the notion that if something can be recalled,…

Bandwagon Effect The bandwagon effect is a cognitive bias defined by Wikipedia as the tendency to do (or believe) things because many other people do (or believe) the same. Investors follow the lead of others. The more investors following a deal, the more investors are willing to join. Investors look…

Anchoring Anchoring is a cognitive bias defined by Wikipedia as the tendency to rely too heavily, or "anchor", on one trait or piece of information when making decisions (usually the first piece of information acquired on that subject). Investors tend to attach to the first thing startup pitches and stick…

Build a Moat Warren Buffet once said, "I look for economic castles protected by unbreachable moats." In the startup world, investors look for a competitive advantage that can build a moat around the business. "Me too" businesses are difficult to fund because anyone can start one and compete. To build…

Repeatable Systems Repeatable systems are a key element in growing and scaling a business. Once the business is up and running, the founder should start to build repeatable systems. Anything you do more than once should be documented. The key steps should be written down and followed each time you…