We can liken tech startups to balloons filled with helium gas. If we don’t tether them to the ground, they will ascend to the sky and eventually dissipate. Tethering them to the ground encompasses numerous dimensions, from micro-level approaches to macro-level perspectives. Cash flow is often cited as a primary reason for startup failures, according to various studies. However, another simple reason exists which would even come way before the cash-flow issues: your approach or solution may not address any genuine need, or people simply may not feel inclined to use it.

This seemingly straightforward truth can be challenging for founders to digest, especially when they are deeply invested in their ideas and lose sight of perspective.

So, are all the decisions you make geared towards tethering your startup to the ground? The answer is yes or no. Your decision-making mechanism plays a key role in your success.

Among all the areas I have checked, the investment space is the domain where people focus obsessively on how they make their decisions. If you’ve read “Principles” by Ray Dalio, you would understand the rigorous effort he has made to overcome bias, particularly in the investment world, where the cost of biased thinking is readily apparent due to its focus on numbers. However, in the startup world, decisions are not solely based on numbers; passion drives the entire process. Interestingly, people are often less sensitive about wasting their time than their money. Therefore, biased decision-making has never been a huge topic in the tech-startup community properly as much as it does in the investment space.

Here are some very simple ways to lower your bias in your decision-making and ensure that your startup is addressing a genuine need in real life:

1- Benefit of Doubt: Accepting the possibility of long-term biases

Always be aware that your decision-making is primarily influenced by your own perspective, and you are just one person among billions. Merely acknowledging this fact is a significant step forward. If you internalize this understanding, you will recognize how to surround yourself with individuals who can help mitigate your biased decision-making. I would recommend reading “Principles” by Ray Dalio and Charles Munger’s talk in 1995 at Harvard University and his article titled “The Psychology of Human Misjudgment.” Additionally, Nassim Nicholas Taleb’s books on uncertainty provide valuable insights into what type of data you need to consider to make your decisions.

2- Without strong real-life use-cases, you may want to reconsider starting a company

Many technologies fail simply because they lack well-defined use cases, which are crucial to building a company and investing your years of effort and money. Apparently, that’s why they are also keys to seeking smart investments. How do you build your use cases? As we all know, building a company requires continuous iterations in the product development. The startup world calls this “product-market fit,” but in my opinion, this term detracts from the focus on the actual use. That’s why I insist on using the “use-case” terminology.

When you are in the process of building your technology, you must continually seek ways to address real-life problems. If you can’t find any or as many as needed, it’s likely that what you’re building won’t succeed.

Here is an example: In January 2024, deep fake pornographic images of Taylor Swift rapidly spread through social media channels. Although the fans supported taking down the pictures, some pictures had 47 million views. The White House called it alarming. European Union negotiators work on a bill that would criminalize the sharing of such content across the EU. This is a huge and real problem in real life, which means a huge opportunity for startups. Toggle, a company providing decentralized KYC solutions, tied their solution to this problem, showcasing its relevance. They both shared articles on LinkedIn and their blog. Nobody needs to know what decentralization or KYC is or how Toggle works, which is the balloon with helium gas, but everybody can empathize and understand the Taylor Swift case. So, they tethered their solution to a real-life problem and at the very least made it easier for people to have a common sense of their domain. However, they need to work substantially on their language and the way it’s presented, as it’s still too complex and hard to follow.

3- Move away from solely focusing on quantitative data for decision-making

Entrepreneurs are always under pressure from excel tables to drive revenue. The education system highly emphasizes quantitative thinking. Therefore, most of the decisions are made on numbers.

However, most people are much weaker in using qualitative data in their decision-making. For instance, if quantitative data indicates that 90% of older people prefer affordable products, any founder developing digital products for older individuals could easily understand and incorporate it into their product strategy. Conversely, when presented with qualitative data highlighting the importance of relevance to older people when choosing services or products, most individuals would struggle to incorporate this insight into their decision-making process.

It should not be forgotten that utilizing qualitative data in decision-making is akin to exercising a different muscle. Unless you work in related domains, it is likely that your ability in this area is weak.

4- Opening room for qualitative data in decision making

The method for opening room systematically is twofold:

-Continuously gather qualitative behavioral data. User researchers with design backgrounds excel at this.

-Ensure that this data is integrated into every level of your company, even in its early stages. This practice will substantially help mitigate biased thinking.

One simple example: In 1975, Bloomberg Businessweek published an article titled “The Office of the Future,” where it projected that by 1990, most record-handling would be electronic. This was the projection at the time, so many technology companies invested in paperless working during those years but things didn’t move that way as simply people feel secure with touching paper. Most of the technology investments failed. Surely, this dynamic has changed with the new generation. However, imagine yourself as an entrepreneur in the 1970s. How would you decide to work on a startup in the domain of paperless offices? What data would you base your decision on?

As a result, being aware of the possibility of bias in decision making, continuous collection of use-cases and opening room for qualitative data in running companies can be a method to lower bias in decision making and decrease the failure rate