DON’T JUMP OFF THE CLIFF WITH A PARACHUTE

05 MARCH, 2012 — MENLO PARK, CA

When we launched Proxino, I was enrolled in Stanford’s CS PhD program. Now I’m not. Through my transition, I’ve learned a bit about human incentives, and the pitfalls of over-optimization.

A proper set of incentives is essential to startup success. You’ll often see these described with cliff-jumping imagery, and that’s a good metaphor. Jump off the cliff, and you had better learn to fly. Otherwise, bad things happen. I know this from experience.

You see, I jumped off the cliff with a parachute.

You’d think a parachute would offer me some advantage, and in many ways, it did. The probability that I’d destroy myself on the rocks shrunk to an infinitesimal value. But when you have a parachute, learning to fly becomes much harder. It’s no longer a do or die sort of situation.

To further extend the metaphor, I thought I wanted to fly so much that this wouldn’t make any difference. Maybe that’s true. [1] But although running a startup is a lonely business, I wasn’t not the only actor involved. And not just because I had a co-founder.

I failed to appreciate that that even if I could override the cognitive biases induced by altered incentives, others might not be able (or willing) to do the same. When running a business, the perceptions of others matter. So here’s a bit of advice from someone who’s given it a lot of thought:

Don’t over-think things, just jump off the cliff.

1 I like to think so, but I’m admittedly biased.