How Too Much Confidence Can Hold You Back

We’ve all heard how self-confidence is an important pre-requisite to business success. As pointed out in the article Why Obnoxiously Confident People Like Kanye West End Up Successful, there’s apparently even some research that backs it up:

“According to Cameron Anderson, a professor at the Haas School of Business at Berkeley, ‘overconfident individuals are perceived as more competent by others and they attain higher status.’ In other words, there’s a direct connection between over-appraising our own ability and our ultimate success.”

It’s worthwhile to look at the research quoted in this article as it relates to what can happen with startup ventures.

Every new company starts with a promise. That it has — or says it has — a “secret sauce.” That thing that makes it special and worthy of investors’ — and customers’ — attention. It shouldn’t take very long before we know whether the company can make good on that promise, right? But with a startup it can sometimes take too long. So long that investors lose their money, customers are disappointed and the founders’ reputations are seriously damaged.

Look at the recent famous failures of the hand-held Lily Drone and the medical testing of Theranos. Was the “sauce” kept too secret from too many people for too long?

“Too many of us are waiting for someone else to tell us that we’re good enough. To certify us. To give us a stamp of approval.”

Sounds good so far.  It’s important to generate our own self-worth. Check.

“But the only person who can give you a stamp of approval is you. Before the world sees your talent, you have to see it.”

Still good. You’ve got to believe in your idea.

“And according to the research, if you believe it, everyone else will get sucked right in.” 

Let’s make sure we’ve got this right: Confidence is critical to success, but our reward for having too much of this good thing is that the only feedback we attract is a whole lotta “awesomes” and “amazings” from other people.

While it hurts to hear “No!” we do need to hear it when it’s appropriate. And it’s always good to hear someone say “Whoa!” especially when it’s accompanied by some constructive observations about the direction we’re headed.

That kind of sobering influence happens naturally in a large organization with lots of people and projects happening at once, and whole departments dedicated to governance and compliance.

Not so in a startup where the founder is free from having to run the gauntlet of “annoying obstacles” like internal competition for resources, explaining her case to compliance and audit departments, and defending herself against outright wanton attacks from co-workers that arise simply from the dynamics inherent in corporate politics.

In a small company, there’s no buzzing swarm of internal competitors, inside “police” and potential saboteurs to educate you. That means founders are left to roam the business landscape, smiling and charming their way to rounds and rounds of funding and sign-ons by excited customers, oblivious to the shortcomings of their big idea and potential pitfalls in the way of its successful execution.

So, this perfect storm of the outsized ego, unchecked by the moderating influences of a corporate infrastructure, provides the perfect conditions for delusion to flourish and exaggeration to run amok.

It doesn’t have to be that way. Sure it’s great to have confidence in your idea. But you don’t want that to shut off the flow of important input you can use to refine it and make sure it’ll really fly. Engage a virtual team of insiders and outsiders, and use a disciplined process such as Lateral Thinking to make sure your idea gets vetted from all angles.

Nothing informs and educates you like having to explain what you’re doing — and why and how you’re doing it — to strangers of all stripes.

Use your self-confidence and belief in your idea — not to charm and intimidate — but to move forward in the right way, attracting healthy and useful skepticism and challenges from others to give you the information you need for course corrections that can be the keys to successful implementation.