Comment by reqres | Hacker News Reader

Comment by reqres | Hacker News Reader

Parent Full thread

I'm trying to find the name of a suspected logical fallacy that I think some founders make... wonder if anyone can spot it?

It goes something like: 1. Established product A has traits X,Y and Z and is a billion dollar business 2. Our new Product B also has traits X,Y and Z and so it will be a billion dollar business

Example I saw the other week from "Why Bitcoin Matters"

> A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers. Political idealists project visions of liberation and revolution onto it; establishment elites heap contempt and scorn on it. On the other hand, technologists – nerds – are transfixed by it. They see within it enormous potential and spend their nights and weekends tinkering with it. What technology am I talking about? Personal computers in 1975, the Internet in 1993, and – I believe – Bitcoin in 2014.

Please note, I'm not knocking bitcoin here. I'm just wondering if this is indeed a fallacy and has a name.

The fallacy you're describing, and it's something that far too many startups do, falls under the banner of "cargo cult behaviour". It was first described by Richard Feynman, while talking about science, but the principle applies to people who merely mimic behaviour and expect the same outcome regardless of what they're doing.

"In the South Seas there is a cargo cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they've arranged to imitate things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas--he's the controller--and they wait for the airplanes to land. They're doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn't work. No airplanes land. So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they're missing something essential, because the planes don't land." [1]

Believing you're building a billion dollar business because you're nationally doing the same things as someone who has built a billion dollar business before you is all too common.

[1] http://en.wikipedia.org/wiki/Cargo_cult_science

I think this person is mostly off the hook here. To begin with "I believe" makes it clear that this is an opinion, not a statement of fact. They aren't saying "bitcoin will be popular because personal computers were popular" they are saying "I can see similarities between the two".

They aren't even making any specific statement about bitcoin beyond it being controversial and interesting to nerds; both of which are already true.

It is highly related to the Questionable Cause fallacy: namely many believe that if two events are highly correlated then there is a causal link between them.

The business has traits X, Y, Z and successful, so we conclude that the traits X, Y, Z causes it to be successful.

The fallacy of the form "A has trait X, A has trait Y, B has trait X, therefore B has trait Y" is an association fallacy (the particular subtype you refer to is sometimes called "honor by association", its exactly the same as the somewhat more popular "guilt by association", but where the faulty conclusion is positive rather than negative.)

http://en.wikipedia.org/wiki/Association_fallacy

A lot of this is just confusion of necessary and sufficient conditions. Assuming that X, Y, and Z are necessary, it doesn't mean they are sufficient. (Although in #1 they might not even be arguing they are necessary.)

"Fallacy of the undistributed middle"

all A are X

this B is X

therefore this B is A

then: for A: successful business. for X: has certain traits. for B: our new product.

Not really. The case is not being made that "all successful businesses have this specific trait".

I think the most relevant fallacy here is "post hoc ergo propter hoc", which says that if A came before B, then A must have caused B.

I.e., this business had traits A, and then they went on to become successful, so it must have been these traits, since they were there first.

True, there isn't even a claim of "all" (which makes it even weaker of course).

But there is likely a plausible explanation why some property of the product improves its sales. And indeed, that property may really be necessary for a product's success. But it may be an insufficient cause.

e.g. facebook started among college kids so my product focused college kids will success.

So I'm thinking it's a flavor of over generalization or selection bias and I opine that you can most easily show how ridiculous that kind of reasoning is with the "A is X, B is X therefore B is A" fallacy.

This is an inductive argument I'd say, which is also listed as a fallacy on that site - see the "Examples of Fallacies" below the numbered list).

Reply on news.ycombinator.com