Idealab, a Pasadena (Calif.)-based technology incubator, has formed 75 startups in the past 15 years, selling or taking public 30 of them. More than a dozen are currently in development or operating privately with advice—and in some cases, investment—from Idealab. From highs such as Overture.com to lows like EToys.com, the incubator’s founders have learned valuable lessons about what makes a startup succeed, says Douglas McPherson, vice-president of corporate development and general counsel at the company. McPherson and Andres Castañeda, Idealab’s director of recruiting, spoke about making better business decisions at an entrepreneur roundtable at Idealab’s offices in June.
Here are some of the "thinking traps" Idealab tries to avoid:
• Confirmation bias: Rather than being purely rational actors, research shows that individuals often unknowingly fall into gaps in their reasoning, McPherson says. One of the strongest is confirmation bias, the tendency to favor data that confirms our preconceptions or hypotheses. "In business, teams have to fight the temptation to take new information and see it as fitting into certain sets of facts," he says.
To read the full, original article click on this link: Five 'Thinking Traps' Entrepreneurs Should Avoid - BusinessWeek
Author:Karen E. Klein
