Trust the expert in you

April 19th, 2011

I was recently rereading a very interesting article by Paul Graham on 'What Startups are Really Like'. Among the many great points he makes, he summarizes how Venture Capitalists (VCs) disproportionally reward startup founders that present confidently over the objective measures of the value of the idea or company. He hypothesizes that this is because they themselves had to show lots of confidence and make a strong impression that they knew exactly what they were talking about in order to raise their own money from their Limited Partners or Asset Managers.

"The reason VCs seem formidable is that it's their profession to. You get to be a VC by convincing asset managers to trust you with hundreds of millions of dollars. How do you do that? You have to seem confident, and you have to seem like you understand technology.

VCs themselves have no idea of the extent to which the startups they like are the ones that are best at selling themselves to VCs. It's exactly the same phenomenon we saw a step earlier. VCs get money by seeming confident to LPs, and founders get money by seeming confident to VCs."

More recently I watched another TED talk (I am addicted to them) by Noreena Hertz where she questions people's sometimes complete trust of experts. She thinks there are some real dangers to shutting off our own internal decision making mechanism and highlights the recent economic crash and other areas where experts have dramatically failed - such as amputating the wrong leg.

"But experts do get things wrong. Did you know that studies show that doctors misdiagnose four times out of 10? Did you know that if you file your tax returns yourself, you're statistically more likely to be filing them correctly than if you get a tax adviser to do it for you? And then there's, of course, the example that we're all too aware of: financial experts getting it so wrong that we're living through the worst recession since the 1930s."

This got me thinking about our role as an IT advisor to our customers. Our customers look to us as experts in many areas of IT. While we are too humble to say we know everything there is to know, since we onboard a new customer almost weekly we definitely have seen our share of IT problems and found ways to make things better for all involved.

We encourage our customers to include us in an open dialogue about their IT and Business challenges and welcome the opportunity to help them with as many as we can.

But what happens when you don't understand your expert?

From Noreena Hertz:

"You see, being ready to take experts on is about also being willing to dig behind their graphs, their equations, their forecasts, their prophecies, and being armed with the questions to do that -- questions like: What are the assumptions that underpin this? What is the evidence upon which this is
based? What has your investigation focused on? And what has it ignored?"

We think it is important to be able to talk in your own terms with your trusted partners, especially in an acronym filled field like Information Technology.

So if you are a small business who knows they need advice with their technology needs, don't be shy to ask your technology advisor to explain why they are making the recommendations they are. If they keep falling back on charts, "industry standard" and acronyms - you have to wonder how deeply they understand your needs and the solutions they are recommending.

Here at Sinu we welcome trying to explain the Business goal behind our decision and how it will help improve your overall business - not just the challenge at hand.

We think as the world becomes more complex and everyone has more of the world's information at their fingertips, they will need experts to help guide them through the wealth of available knowledge. But most importantly they will need experts they can understand and trust because the thinking of their advisor makes sense to them in their own terms. We think these new types of relationships between business and other companies in various areas are going to create great companies and hopefully balance our economy with the increased importance of small businesses run by people who really know their business and not so much the mega-corporations that by their size have to rely on experts - who are sometimes wrong.

By Larry Velez

CTO, Sinu