A lot of entrepreneurs talk about the learning curve to being successful. While everyone’s learning curve will be a little different, many entrepreneurs’ journey will follow the path of the Dunning-Kruger Effect. The Dunning-Kruger effect is a cognitive bias whereby people with limited knowledge in a given endeavor have an inflated view of their own capabilities. Initially, as individuals learn about their own limitations, their confidence precipitously falls. It does gradually get restored as the individuals gain competence. Expert Program Management provides an example demonstrating the thought process for individuals as they gain confidence.
Each phase of this decision making is actually critical for the entrepreneur. In the early stages of an endeavor, the entrepreneur is unaware of the many challenges they will face and are brimming with confidence. They essentially “do not know what they do not know”. This empowers the entrepreneur to step out in faith and start pursuing their business. However, even the bravest entrepreneur will have a little risk aversion.
As the entrepreneur gains competence, they learn how much they still need to learn and despite falling confidence, they actually begin to develop competence. These middle stages are critical for the entrepreneur to recruit to their team others with complementary skills, and identify long term success strategies.
As the entrepreneur masters their competence, they need both competence and confidence. Yet many entrepreneurs tend to live at the early high peak of confidence or the low valley of confidence.
If you never get past feeling that you have all the answers, then you will never become a true expert. To leave this peak, you must ask tough questions of yourself and surround yourself with people who will ask questions. Realizing you do not have all the answers is a not a problem, thinking you do is.
The valley can create a temptation for the entrepreneur to quit before they have really begun. They will doubt whether they will ever be successful. While it is possible that some entrepreneurs will genuinely be incapable of developing the necessary competence, it is important that this is an honest rational decision and not out of being in a low place.
The learning curve for your endeavor may not follow this path exactly, but whether you are feeling confident or not, the key is to continue to develop your competence!
Previously published at AVODA Group website, www.avodagroup.org
Prof. Jason MacGregorTreasurer at ICIE Fund
Jason is an Associate Professor and Roderick Holmes Chair of Accountancy at Baylor University in Waco, Texas, USA. He is originally from Canada. He has undergraduate degree from the University of Windsor and a Ph.D. from the University of Florida. Jason is also Treasurer at the ICIE Fund, AVODA’s main fundraising partner.