[hooande]

Even though you might have been wrong about those successful startups, there are dozens or hundreds of others for which your negative first impression would have been dead on. You shouldn't stop trusting your instincts because you might have been wrong about a small number of high profile companies.

As you pointed out, the main issue here is that founders are counting on other people so much for validation of their ideas (and staking their egos on it). I don't see why you wouldn't just give your honest initial impression. If the founders become discouraged or upset with you for doing so, then that's their problem and not yours.

[iqster]

I don't understand your argument for "you shouldn't stop trusting your instincts ...". You say that you would have been right dozens or hundreds of times. But we all know that startups are a numbers game. It doesn't matter if you say no to a hundred startups. It matters that you said yes to the one that became AirBNB or DropBox.

I'm not arguing for the sake of arguing. I am genuinely perplexed at how monumentally bad outcomes can be produced by a series of rational choices.

The best I figure is the following. I gain my "wisdom" by making mistakes and trying to learn from them. The problem is that the environment from a year ago is quite different from that today. Heck, every passing second yields an environment different from the past. And sometimes (always?), it is the external factors that make the big difference.

Let me illustrate a case in point. When I first saw MIDP/CLDC on a Motorola IDEN phone, I knew this was the future. I spent a lot of time making something of it. Yet, the market wasn't ready (and frankly, neither was the technology). In 2003-2004, I saw .net compact framework on a Compaq iPaq. I was so amazed by the technology that I again spent a lot of resources making something of it. In those days, you'd have to put a bulky sleeve on your iPaq in order to get wifi. Cellular data? Forget about it ... it cost a fortune and the carriers were determined to milk their monopoly to the max. When the iPhone was announced in 2007, I saw it and dismissed it. And it wasn't just me. I was in grad school and had worked in the cell phone industry. Pretty much every smart person I knew told me this was yet another non-event. We all know what happened next to the people who wrote software for the iPhone in the early days.

When I reflect upon this and other similar experiences, I can't help but think that my hard-earned wisdom may have become obsolete without my knowing it. These days I subscribe to a different sage advice that might work better ... "Stay hungry, stay foolish"[1].

[1]: From the last issue of the Whole Earth catalogue as relayed via Steve Jobs in his Stanford commencement speech.