Systematic Skepticism Makes You a Better Entrepreneur

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In a sense, all entrepreneurs have to be skeptics. We are skeptical of the current order, and we believe that we can do better. We believe that we know better.

But we often fail when it comes to internal skepticism. We are readily skeptical of the ideas of Google and Microsoft, but we fail to turn that same level of skepticism on ourselves and our ideas.

Outward-facing skepticism coupled with inward-facing belief is the stuff of cults and conspiracy theorists. If your business idea falls into one of these categories, you can safely ignore the rest of this article.

For the rest of us, let’s talk about how to make better use of our skepticism.

Outward-Facing Skepticism

Before we delve into the ways of fostering internal-facing skepticism, let’s see if we can figure out a procedure and best practices for our outward-facing skepticism.

As an entrepreneur, you are a problem-solver. For some reason, you believe that the current system is so terrible that it needs to be replaced. You hear others complaining about the available solutions, so you take that to mean that you aren’t alone.

But their complaints are different. They see a system that needs tweaking. If you believed the system could be tweaked, you wouldn’t be trying to build a new one. Other people are annoyed about the implementation details. You are skeptical of the very framework the system is built on.

When Garrett Camp — the co-founder of Uber — looked at taxis, he didn’t see a system that needed to be tweaked. He saw the need to uproot everything and put in a whole new system. Some people would look at the idea of shared rides to reduce cost and think taxi companies could definitely do that. Camp was more skeptical than that.

How do we codify that kind of skepticism?

Most people look at systems like the taxi industry and think they need to be modified. Many think people just need to learn to live with the way things are.

Why do entrepreneurs stand alone in thinking that modification is not enough? Why do we see the need for a replacement where most see the need for a renovation?

Partially, it’s ego. We believe that we can build it better. We don’t have a monopoly on big egos though, so that isn’t enough.

More important than being egotistical, we are skeptical. We don’t believe that the executives at these companies buy into the need for these changes. And even if they do, we don’t believe that the changes will be quite so easy in such a massive company. We are skeptical of the ability for giant companies to successfully make what — to an outside observer — seems like a minor pivot.

It’s no surprise that we are more likely to be skeptical of such a thing. We know how hard it is to implement what seems like a minor change. Consumers are not naive, they recognize many of the steps needed to take the leap from being a standard taxi to being a ride-sharing service.

As entrepreneurs, though, this thought process is ingrained in our very cores. In the back of your head, you probably already had a series of steps, assumptions, changes in the user journey, and potential risks associated with the taxi to ride-sharing service change as soon as I mentioned it.

That is where skepticism becomes useful because this is where it becomes true skepticism.

“I don’t believe they can do X” is not skepticism, it’s negativity and distrust.

“I don’t believe they can do X because of Y” is skepticism.

Our proceduralized skepticism looks something like this:

  1. Understand the problem being faced by the users.
  2. Work out a proposed solution.
  3. Put together a list of changes necessary for the company to implement that solution.
  4. Determine which changes would be most difficult and why the company would have a hard time with them.

Step 3 gives us a list from which to choose our X’s. Step 4 is where we find our Y’s.

Ah, but did we make a mistake with step 2? We might have. There is rarely just one solution to a problem. And, as I’ve stated many times, people don’t care about solutions, they care about problems.

Your first instinct was likely to put the solution you would want to build in step 2. But the solution we would build from scratch will not be the same as the solution an established company would find easiest to implement. Be sure you are using the latter.

Inward-Facing Skepticism

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That was the easy part. Now things become more challenging. Ready to level up your entrepreneurial skepticism game? Time to get under the microscope.

The goal in the previous section was to understand what our skepticism looked like when applied to other companies or solutions. We needed to go beyond negativity by developing a statement of the form “I don’t believe they can do X because of Y”.

Let’s make sure we are doing the same thing with our own business. There are a couple of reasons to want to go about this process.

  • Confidence is only good if it is deserved. By looking at our companies through the same scope we see others, we become better at determining whether we have earned our confidence.
  • Negativity is harmful, but it can be harnessed. Entrepreneurship is a rollercoaster. There will be times when you feel like giving up. By adding a “because Y” you turn that negativity into a plan of action.

When is the right time to go about this process?

There’s never really a bad time to be introspective and skeptical, but there are certain cases in which it is particularly useful.

Let me give you some examples.

  1. When first starting on your idea. Use exactly the same tool you used to assess your competitor. The only difference is that your starting point is nothing or close to nothing. This is a great way to determine whether you are really in a better position to solve the problem than they are. It also helps you determine the steps necessary to optimize your position, including choosing co-founders, investors, etc.
  2. When facing a potential pivot. In this scenario, do it twice. Once from your current state and once starting from scratch. This will help you determine whether a pivot is really better than a fresh start. A skeptic has to be on the lookout for sunk cost masquerading as foundational work.
  3. When evaluating new or changed competitors. Use your current state and theirs as starting points and compare where you stand. Taxi companies have implemented many changes since Uber started, and you can bet Uber constantly re-evaluates their threat, as they do with Lyft and other more recent competitors.

Final Thoughts

Entrepreneurs are skeptical. Entrepreneurs are systematic in their processes. Unfortunately, entrepreneurs are not always systematic in their skepticism.

This was far from a thorough examination of the process. But you are entrepreneurs, and I trust that you were skeptical even of my thoughts on skepticism.

Use that.

Continue to be skeptical, but be systematic in your skepticism. And treat your own ideas and your own business the exact same way you treat my words or your competition.

You’ve built an impressive thought process for seeing the flaws in your competition.

Use that process on yourself.

If you don’t, someone else will.

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