Hacker News Reader

Comment by tlb | Hacker News Reader

The assumption here is that business cycle busts are caused by the inevitable collapse of companies that weren't sincere about creating a sustainable business in the first place. There are plenty of anecdotes to color in this story, but I don't believe it's the main driver of business cycles.

EDIT: Admittedly, I'm in a filter bubble of sincerity, since it's one of the main things we look for in YC founders.

View on HN

The author's theory allows not just for insincere entrepreneurs but also incompetent ones. No matter how strongly an entrepreneur believes his idea to be a billion dollar business, it's very possible that it isn't, even if he's able to convince investors (and himself) that it could be based on some superficial metrics.

Right, and the the incompetence can be subtle and from many causes, such as poor management skills, just-less-than-necessary technical capability, in addition to the standard Dunning-Kruger effect, and cargo cultists who identify superficial qualities of entrepreneurships. Ironically, in an entrepreneur you want just the right amount of impostor syndrome, but the process may select for Dunning-Krugers.

But sincerity and youthful exuberance is a startup founder stereo type. People do go life coaches to manufacture a Win Friends and Influence People Tom Cruise persona precisely because they are seen as indicators of success by funders.

When you over select on certain qualities, those qualities will be mimicked. In business, correlation is causation.

Not necessarily - an honest mistake would do as well - the point is that the companies that make that mistake get the funding.

Reply on news.ycombinator.com