The Danger of Early Hype in Consumer Social: Pragmatic Thinking and Learning

The Danger of Early Hype in Consumer Social: Pragmatic Thinking and Learning

In the world of consumer startups, hype is inevitable. It's that moment, whether organic or manufactured, when the perception of a startup's significance expands ahead of its actual reality. Hype can either make or doom a startup, depending on how it's used. While hype may be tempting and sexy, I believe in avoiding it for as long as possible.

One reason to avoid hype is that it's not in your control. Unlike economic subsidies, which can be a valuable weapon to get a flywheel spinning, the hype subsidy is unpredictable. Economic subsidies, like the ones used by on-demand marketplaces such as Uber and Instacart, can blind you to the true value of your product or service. It's easy to grow quickly when you're selling something for less than its actual worth.

Hype creates an aura of importance and inevitability around a startup. It acts as a subsidy on engagement in a consumer social network. Consumers lean in and invest their time and engagement in a platform because they believe they'll be rewarded for it in the future. They want to be part of the new hot thing, the next big success story. But this can be dangerous for a startup.

The challenge with hype is that once it starts, it's out of the founder's control. If hype is applied too early in a network's evolution, it can doom the startup. The actual average experience on the network may not catch up to the hype fast enough. When the hype subsidy is removed, the network hits an air pocket. It becomes difficult to know how consumers will engage without the hype pushing them forward. You risk optimizing for the wrong things.

That's why I advocate for avoiding hype until you have a product and flywheel that is truly working. Wait until you have achieved product-market fit. Being underestimated in the early days gives you more time to figure things out. Incumbents are less likely to react to you if they see you as niche or insignificant. Companies like Pinterest, Robinhood, and Etsy were all seen as niche in the beginning, but they proved their worth over time.

Hype is better used after you have achieved product-market fit. It can amplify your success and attract even more users. But using hype too early in a startup's lifecycle can lead to failure or a long and painful road to rebuilding. It's important to stoke hype when you have a solid foundation to build upon.

Now, let's shift our focus to pragmatic thinking and learning. Andy Hunt's book, "Pragmatic Thinking and Learning," offers valuable insights into problem-solving and decision-making. One key principle is to consider the context and see everything as part of a system. It's dangerous to only consider things in isolation. Everything is interconnected, and understanding the bigger picture is crucial.

Hunt also emphasizes the use of rules for novices and intuition for experts. Novices need clear guidelines and rules to follow, while experts can rely on their intuition and experience. It's important to strike a balance between structure and flexibility in your thinking.

Taking breaks and stepping away from the keyboard is another valuable practice. Sometimes, you need space to let your background processes figure out the problems you're encountering. Going for a walk, taking a shower, or simply having a break can help refresh your mind and lead to better problem-solving.

Changing your viewpoint is also a powerful tool for solving problems. Look at the problem from different angles, exaggerate it to the extreme, or change your point of reference. This can often lead to new insights and solutions that you may have overlooked.

Trusting your intuition is important, but it's equally important to verify your instincts. If something feels off or wrong, it's crucial to address it as soon as possible. Uncorrected problems only get worse with time, and ignoring them can have serious consequences.

Finally, Hunt introduces the rule of three. If you can't think of three ways a plan can go wrong or three different solutions to a problem, then you haven't thought about it hard enough. This rule encourages thorough and critical thinking, ensuring that you consider all possibilities and potential pitfalls.

In conclusion, the danger of early hype in consumer social startups is real. It can lead to unrealistic expectations, misaligned priorities, and a failure to deliver on the hype. It's crucial to avoid hype until you have achieved product-market fit and have a solid foundation to build upon. Furthermore, adopting pragmatic thinking and learning principles can enhance your problem-solving abilities and decision-making skills. Always consider the context, take breaks to let your mind process information, change your viewpoint, trust your intuition but verify, and apply the rule of three. By incorporating these practices, you can navigate the challenges of startup hype and make informed decisions for long-term success.