Joshua Liu

A few weeks ago, The Next 36 had its National Selection Weekend where they picked their 4th cohort of next generation entrepreneurs.

For those who don’t know, The Next 36 is where we started Seamless Mobile Health. I owe a lot of where I am today to that program.

Seeing the new cohort made me reflect on our own first few weeks when the program started.

I remember there was one piece of advice I kept receiving early on:

A lot of people are going to give you advice. Often you will receive conflicting advice from very smart people. It’s your job to figure out what’s right for you.

At the time, I didn’t quite understand the importance of this. Today, this is one of the first pieces of advice I give to new entrepreneurs.

Advice isn’t created equal

Over the past year I’ve received a lot of advice. Some of it was good. Some of it seemed good but was actually bad. Some of it was very bad. And this was usually advice from some of the smartest and most successful individuals I’ve ever met.

I once got advice from someone who on paper has the resume to be one of the most respected thought leaders in my space. I’m quite confident if I followed his advice, our company would be dead.

This seems rather counter intuitive: why would smart people give bad advice?

Why we seek advice

When you start your first company, there are going to be many situations where you are unsure of the right thing to do. Another way of looking at this is that there are assumptions you need to test.

When you don’t know something, there are two options:

1. Figure it out for yourself – i.e. test the assumption yourself
2. Ask someone else – i.e. find someone else who might have tested the assumption already

In many cases, it makes more sense to seek the advice of others. It doesn’t make sense to always be reinventing the wheel and testing every assumption.

When you need help (and you will a lot), it’s easy to seek advice from a mentor more experienced to help you. New to all of this, your first instinct will be to follow the advice you are given, even if you don’t quite understand if you should or not. And it would be reasonable to do that – early on, knowing as little about your business as you do, someone smarter and more experienced than you will analyze the situation better and likely make a better decision than you.

There’s nothing profound about this. All I’m saying is that given the same set of information, someone smarter and more experienced will make better decisions (a.k.a. educated guesses) than you.

That said, there is much more to getting good advice than finding the smartest people around.

Rock, Paper, Scissors

Imagine you come across the game of Rock, Paper, Scissors for the first time. Intrigued, you find the smartest person in the world (who also has never played before) and tell him the rules. He would likely tell you to play a Game Theory optimal strategy, which basically means randomizing the frequencies with which you play Rock, Paper or Scissors.

You take his advice, and over many games during the next week, you notice you generally break even against anyone you play.

A while later, you come across someone who has played more Rock, Paper, Scissors than anyone who has ever lived. He is also apparently the most successful player around. When you ask him what his secret is, he shrugs and says “I just learned to throw Rock every time. I don’t know why it works, but it does, so I just keep doing it.”

Unbeknownst to this great player, 90% of the population in this imaginary world just so happens to throw Scissors every time.

Experience > Intelligence

As your business progresses, and you become more of an expert in your field, you will naturally begin questioning the advice you receive. Part of this is due to personal confidence developed over time, but the primary reason is that there is now an asymmetry of knowledge between you and the person giving you advice: you know significantly more about your business than they do.

There is a misconception that one should seek out the smartest and most successful people for advice. However, in the real world, relevant experience trumps intelligence every time.

In fact, the most common reason why two very smart people give conflicting advice on an issue is simply because one person has more information than the other. Given the same information, chances are, they would both come to the same logical conclusion.

No matter what field you work in and no matter how smart you are, you will make bad assumptions. Most things won’t work out the way logic tells you it should. With experience and time, you will figure out what works and what doesn’t – this is the information you accrue with experience. 

But time is always of the essence. You can’t afford to trial and error your way to success – you won’t last that long. You need to reach your next milestone as fast as possible.

In fact, it’s also less practical. Why test all of your assumptions from scratch, when there are other people who have already tested these exact assumptions and have all the data points?

The ideal advisors

The ideal advisors will be the ones who have successfully done what you hope to do. The more relevant their success is to yours, the better their advice will be, simply because their experience is full of so many data points relevant to you.

For example, if your company sells software and technology to hospitals, then getting advice from someone who successfully ran any technology company would be better than getting advice from someone who never ran a company. But advice from someone who has successfully sold software to hospitals would be leaps and bounds better.

What does this mean for you?

It means you should go out and proactively find people who have successfully done the things your company must do. You should take their advice much more seriously than the advice of people whose experience is further removed from your core business.

That said, at the end of the day, advice is just advice. It’s still your job to process the advice you receive carefully. When you take advice from others, you are still the one making the decision. You are ultimately responsible for your successes and your failures.