YC interview advice: 3. Have the calmness that comes from knowing you’ll succeed regardless.
— Paul Graham (@paulg) November 13, 2014
Reading this tweet from Paul Graham I immediately thought that this is great advice for multiple situations, not just YC interviews. Job interviews are one such other situation. Negotiations are another – knowing you will succeed whatever the outcome gives you the power to walk away.
Knowing you will succeed takes a special kind of confidence. That starts with self belief, which an entrepreneur needs in spades. I wrote a while back about the cognitive biases that an entrepreneur need, and personal exceptionalism is top of the list, you should believe that you are the top of your cohort and that your work is snowflake special. You know you will succeed because you know you are good enough to find a way. I’m not sure if you can cultivate this kind of confidence.
But self-confidence isn’t enough on its own. You also need a good plan. It might not be possible to do anything about your levels of self confidence, but you can make sure you have a good plan. The first thing you need is a good idea. That isn’t the same as the best idea you’ve had so far. It should be something that you have a great feeling about. Then you need to test it thoroughly. Look at it from every angle. One way we help entrepreneurs do that is to list out all the assumptions that are made and then examine each for reasonableness. Another good way is to talk to as many people as possible and listen carefully to any criticisms they have. Listen, process, and then figure out whether they are right. Don’t fall into the habit of dismissing a commonly heard objection. If you hear it a lot, think about it a lot.
By way of an example, here at Forward Partners the most common criticism of our business is that our returns won’t be good (enough) because we spend much more money than conventional VCs supporting our partner companies. The argument runs that we would be better off using that money to invest in a larger number of companies. Our belief is that the tools and services we offer make it a little easier for companies to achieve success which brings two important advantages. Firstly it gives us an edge in winning deals and secondly that our partner companies will do better as a result. We take the critique seriously and have modelled out how much that edge in winning deals needs to be worth and how much more success our companies need to achieve. The assumptions look reasonable and we continue to test them against reality as we do more deals and gather more data points.
Combining a good plan which has been thoroughly stress tested with a high level of self confidence puts you in a good place, but there’s one final ingredient you need before you know you will succeed, and that’s a back up plan. If you are founding a company there will be huge unknowns and associated risks. If you’ve done your planning well you will have confidence that they are all manageable, but you need to know that you will prevail even if you get unlucky. In our case we ran the analysis to see what happens if the extra money we spend supporting our partner companies makes no difference, and the conclusion is that the returns to investors will still be ok. Not where we hope to end up, but still ok.