'Group Think'

Grant McCarthy who runs LCC's Singapore operations has a really great term - Group Think. Basically this is a couple of entrepeneurs in a venture that think they are right on an issue - but the rest of the world is wrong. They usually think this right up until the time that their venture is about to collapse...............

Grant and I have actually seen it up close in 2 deals we invested in. Really smart people. Great people to have a beer with. But unable to see clearly as a collaborative the errors that they were making.

One of these deals in particular is a great example. A venture which had IP of only 'timing'. There were competitors in the northern hemisphere but it had the clear jump on the field in Asia. The Founder was a super smart guy and a really nice person. The people he recruited were super smart people. Resume's to die for.

But when they worked together it was as if they were right and the rest of the world was wrong. Unfortunately the venture rather than evolving and improving just was flat simply because the rest of the competitive field was overtaking it. But the management pod just would not accept that they needed to build a business rather than a technological marvel.

Its really disappointing to see. Great people who don't achieve their potential because they can't see the woods for the trees. They convince each other that they are right. Don't take external advice. Perform sub optimally as a result.

Lesson learned : Don't become emotional about your business model. Don't try and convince yourself and others that you are right. This is not about ego, its about building a compelling business proposition.