Sometimes being a founder feels like turning into a beetle while everyone around you becomes more and more enamored with your perceived success.
A huge part of the venture capital and startup ecosystem idolizes confidence, past successes, and those who claim to know better. But in some true Orwellian doublethink everybody knows that Success is overwhelmingly driven by luck, while we can't admit that this applies to our startup too. Likewise there is broad recognition of Herd Mentality across VCs, while no VC will admit this drives their investment decisions.
This happens at all levels:
- LPs convince GPs that they know what startups will succeed, they don't.
- Founders convince LPs that their startup will succeed, they pivot in 6 months.
And it's self-reinforcing:
- GPs give money to LPs that express no doubt.
- LPs give money to Founders who express no doubt.
It is all a great example of how We underweight statistics and overweight causes in our judgement. The statistics are clear: most founders and VCs fail to hit their marks, but admitting the statistics apply to you won't get you far.
It's overwhelmingly privilege and luck.