Ideological vs. Situational Cynics

Cynicism in startup land has many catch-phrases, such as:

  • “Where’s their business model?”
  • “Big minds chasing small ideas.”
  • “That will never scale.”
  • “Normal consumers will not want that solution.”

You know, what, though? The future is unwritten, and while specific critiques or opinions delivered with humility and credible context help everyone learn and get better, most cynical analyses of startups — even though tech entrepreneurship is mainstream — are usually leveled by a motivation to feed an audience rather than to find the truth.

Startups are not a good business. It is not rational to start something new. Statistically, it doesn’t make sense. That’s why solutions which cut through, survive, and ultimately succeed are usually driven by something other-worldly, something like fundamental technology which can’t be replicated, or something like design which creates a emotion bond between customer and product, or things like passion, relentlessness, strategy, and vision. And, optimism.

In the news and media business, it’s important to realize content is created not to further journalism or seek out the truth — those may be byproducts, yes — but the real reason it exists is because there is actually a natural market for news and information and opinion. That’s why NBC helped created MSNBC and why FOX has FOX News. But, don’t take it from me — see this seminal paper by two rising-star Harvard economists who penned “The Market For News” [pdf] and you’ll see what I mean. News and opinion isn’t meant to inform, but rather is a product meant to hit the senses of an audience, often to confirm the existing biases that audience holds.

I think a lot about optimism vs cynicism because, in a previous life, I worked in an industry that worked closely with private, closely-held companies and encouraged ownership to share more and more equity with their employees. One of my colleagues at the time is considered an expert on “employee ownership culture” and his favorite talk to give was about, upon installing these new equity plans, how to deal with cynics within the company. Here are my favorite quotes from his report — read them and try to apply to the startup ecosystem and see what you think:

To focus the discussion, this report covers two basic types of cynics: (1) Ideological Cynics reject the idea of employee ownership. At a conceptual level, they believe that employees cannot or should not be real owners. One respondent, exemplifying this perspective, described employee ownership as “a fairy tale.” Ideological cynics disagree with the “ideology” of shared ownership; and (2) Situational Cynics may believe that ownership has potential benefits in the abstract, but they feel that their own company has not done a good job of realizing that potential. They support the idea of ownership, but not the way in which their company implements it. A situational cynic might say “ownership is a nice idea, but it hasn’t changed our situation much,” or, in the words of one actual respondent, ownership at her company is a “strong concept [with] weak execution.” These people find that their actual work situation does not match their concept of ownership.

In startup parlance, readers of this blog probably don’t encounter many ideological cynics — they are too different than you and me. But, there are many situational cynics out there subtly going about their business, and more often than not, with a few exceptions, these types of cynics are driven by pageviews and feeding their audiences, while the believers understand that, ultimately, everything we all do, every new company, every investment check, and most company stock options are destined to end up as bad decisions. But, people do them anyway, because it’s easy to be cynical about things that are statistically difficult, just as it’s easy for the rooster to take credit for the dawn.

Haystack is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2018 Semil Shah.

“I write this not for the many, but for you; each of us is enough of an audience for the other.”— Epicurus