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Combating Confirmation Bias: How to Create Success for Your Manufacturing Startup

Thursday, 24 January, 2019 Written by Brandon Cornuke

business-3167295_1920-1Northeast Ohio manufacturers, ranging from startups to well-established companies, are confident—and with good reason. They account for 14% of all employment, more than 275,000 total jobs, and 40% of the region's GDP.

But the gift of self-confidence can also be a liability—especially when it comes to developing a new product or service.

As humans, we're programmed to find evidence that supports our beliefs. Psychologists call this a confirmation bias, or the idea that we have a "direct influence of desire based on beliefs." In an ultra-confident business leaders, that bias can cause expensive consequences. 

Building a successful manufacturing company or startup in today's economy requires a willingness to learn from mistakes and, when necessary, make major adjustments. When first starting a business, an assumption that once seemed unquestionable can quickly cause a dilemma. As author and entrepreneur Steve Blank famously said, "No business model survives first contact with the customer."

Below are three ways manufacturing leaders and entrepreneurs can overcome confirmation bias and favor evidence to drive decisions.

1. Look for Disconfirming Evidence

It may sound counterproductive, but the best thing a founder or leader can do is pursue reasons a new idea will not work.

If nine out of ten startups fail, you must assume your first, second, and tenth idea has a fatal flaw to overcome. Seeking out weaknesses is the only way to find them, and that means identifying your first guesses and creating experiments to confirm or disprove your riskiest assumptions.

2. Avoid Biasing Your Experiments

When gathering information about your product, we naturally want positive feedback. Instinctively you may:

  • Create situations that show your product in the best possible light.
  • Add your magnetic personality or your compelling back-story to the conversation in hopes of smiles and nods.
  • Spend extra time explaining all of the wonderful benefits of your amazing idea.

But, if you want honest feedback, don't let those interfere with your product. Talk to strangers who can tell you what you don't want to hear.

Instead of creating positive situations that will earn praise for the product, add disclaimers such as "this isn't my idea" or "this is one of many options we're working on." If possible, have friends or others removed from the product do customer interviews and exploratory sales calls.

Let your product stand on its own—whether on a retail shelf or online—and see if customers buy what you're selling without the pitch. Do everything you can to distance yourself and your biases from the transaction to garner honest feedback. 

3. Get Customers to Show You (Rather than Tell You)

It's amazing how often we see smart leaders invest a significant amount of money based solely on what people tell them. "Yes, I'd totally buy your product!" is music to an entrepreneur’s ears.

But unfortunately, what customers say they would do and what they actually will do are often very different.

Actions, not words, should drive your decisions. If a customer says they'll buy your product, ask them to buy it, right there on the spot. Don't have it on hand? Ask for a pre-order or a down-payment. Don't have a working prototype? Mock one up. As imperfect as your lo-fi product or service might be, selling it (or getting rejected) is priceless. It will teach you more and create more honest conversation about why the person would (or would not) buy the product. 

Do You Have an Idea?

The MAGNET Iterator is where great ideas are established, fostered, and transformed into growing businesses. Learn about the MAGNET Iterator to see how we help startups master new ideas and turn them into a successful companies.

Editor's Note: This post was originally published in June 2017 on the MAGNET Iterator blog and has been updated for accuracy and comprehensiveness.

Categories: Startups, Product Design & Development