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This article was published on March 24, 2013

How groupthink and denial can ruin startups

How groupthink and denial can ruin startups
Dana Oshiro
Story by

Dana Oshiro

Dana Oshiro is the Senior Analyst and Publishing Strategist for NetShelter where she helps more than 200 properties develop blogging best pr Dana Oshiro is the Senior Analyst and Publishing Strategist for NetShelter where she helps more than 200 properties develop blogging best practices. In her spare time she writes for her personal blog Villagers With Pitchforks, tweets from @danaoshiro and "pluses" from

I’ll admit it, the title of this article is downright curmudgeonly. But between visioning sessions, collaborative software development and Linus’ Law of bug detection — we’ve been taught to accept the wisdom of crowds as necessary to most startup decision-making. In our world, consensus is treated as a type of quality control and our success as leaders depends on a culture of listening and openness.  To an extent, all of this is true. But what happens when a constructive conversation becomes a futile one?

Investor and 500 Startups founder Dave McClure offered TNW a few of his thoughts. Said McClure,”We worship at the altar of ‘lean‘ a little too much when really we should just be running our businesses. I tend to be binary and look at companies as those that have customers and those that don’t. Scrum and large group discussions can be useful during the customer discovery phase of the business, but decisions should be based on what’s driving customers as opposed to the subjective. ”

Devotees to the “culture-as-brand” school of startup are loathe to admit that there’s sometimes a downside to too many company-wide discussions — namely that they can fall off the rails. Sometimes when there are egos and biases involved, quality data is extremely hard to parse from these sessions. It is at these times that a cooperative exercise can turn into groupthink, collective denial or old-fashioned peacocking.

Make no mistake about it, this article IS a little curmudgeonly. It’s a cautionary note to help you identify those moments when the crowd’s wisdom is waning. Here are just a few examples of committee decision-making gone wrong.

Bike Shedding

Parkinson’s Law of Triviality or “bike shedding” is just one instance where committee-based decision making can run amok. Bike shedding refers to the idea that groups will choose to ignore complex problems and focus on the trivial in order to show personal contribution. The concept’s namesake comes from an example where a committee chooses to ignore deliberating on the placement of an atomic reactor and opts in favor of discussing the color of a bike shed at length. In short, bike shedding is when everyone weighs in simply because they have the confidence and authority to do so.

Sound familiar? How long was the company-wide thread on the holiday party?

The lesson here is that…too many projects can cause you to forfeit a shot at greatness.

The problem with bike shedding is of course that the time and energy spent debating the issue is not proportionate to the value of the solution uncovered.  This type of discussion can prove hazardous to a startup simply because it is a distraction from the core elements of the business. Not one to mince words, Apple cofounder Steve Jobs was a stickler for focus. He famously advised Google’s Larry Page to prioritize asking,”What are the five products you want to focus on? Get rid of the rest, because they’re dragging you down. They’re turning you into Microsoft. They’re causing you to turn out products that are adequate but not great.” Page obliged and in July 2012, he advised his teams to scale back and focus on core products like Android. The lesson here is that startups can choose to follow every idea, but that too many projects can cause you to forfeit a shot at greatness.


One of The Social Network’s most memorable lines is when actor Justin Timberlake utters the words, “A million dollars isn’t cool. You know what’s cool? A billion dollars.” Au contraire — a million dollars is often VERY cool. Earth to founder, the chances of you being the next Mark Zuckerberg are very slim.

I know it’s a downer and we may not want to hear it, but we need to be realistic and avoid falling into the trap of the overly optimistic and homogenous groupthink environment. This is the phenomenon where critical thinking is seen as disloyalty even if it raises valid issues. In groupthink situations, the bulk of team contributors offer praise rather than thoughtful feedback. They’re Yes Men.

While it’s rarely codified, these are the cultures that support mass conformity without even knowing it. As a result, the company’s collective delusion is so high that there is little room for dissent and contingency plans remain unmade. The folly of this is that most startups begin with an incorrect hypothesis. Author and Stanford professor Steve Blank defines a startup as “an organization formed to search for a repeatable and scalable business model.” In other words, the model is not fully baked. Because the initial hypothesis for most business models is wrong, contingencies plans are often consulted and pivots are common. Writes Blank, “Great entrepreneurs don’t just have a Plan B, they have Plans B through ∞.”

Schlep Blindness

Y-Combinator founder Paul Graham coined the term Schlep Blindness to refer to a group’s tendency to avoid unpleasant tasks. Graham points to the creation of payment startup Stripe as proof of this phenomenon. In his example Graham writes, “For over a decade, every hacker who’d ever had to process payments online knew how painful the experience was. Thousands of people must have known about this problem. And yet when they started startups, they decided to build recipe sites, or aggregators for local events.”

Schlep Blindness is the deliberate decision to shrink from what is irksome. It’s why features take precedence over bugs, why documentation only begrudgingly gets revisited and why Tim Ferris’ “4-Hour Work Week” is a best-seller amongst entrepreneurs. It’s pretty obvious that we tend to gravitate to shiny features and fun tasks while shunning all that is mundane but necessary.

After laying out my examples, I have no illusions about how this article makes me sound. But I assure you these are not the cruel ramblings of a misanthropic cave dweller. I actually enjoy heady discussions, I like my team and I like startups. In truth, some of my best failures are startups.

Nevertheless, at the risk of being excommunicated from the Valley, I feel it necessary to raise my concerns about our industry-wide insistance of constant huddling and debates. My reasons in doing so are simple and well-intentioned. I am afraid that we’re spending our time discussing the mechanics of the victory dance before actually winning. I want us to win.

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