I have a number in mind. I subtract 9 from it and get 3 as a remainder. What is the number I had in mind? Go ahead, answer it. Easy, right? Now try this: How much is ⅖ plus ½? Slightly rusty? But congrats, hopefully, you still got it right.

While you are still feeling good about your math skills, I want to share a story from the early 20th century. In north Berlin, there was a neighborhood where people assembled every day around noon in a courtyard to see an exhibition where such questions were being answered well. Why does that make for an exhibition, you may wonder? Because the one answering the questions was Hans, a horse of the Russian Trotter pedigree. 

Hans was trained for over four years by his owner, Wilhelm von Osten, a mathematician and amateur horse trainer. Hans would answer these questions by tapping his right foot as many times as the number that was the answer. If the answer was a fraction, he would tap the numerator first, followed by the denominator.

Calling Hans ‘clever’ would be an understatement if this was the level of his true intelligence. Given the natural skepticism about the mathematical capabilities of a horse, these claims were put to the test by thousands of curious onlookers for a year and a half. No one could spot any tricks in Hans’ performance. The evaluation passed on to Oskar Pfungst, a comparative biologist and psychologist. 

After further studies, Pfungst concluded that Hans was indeed clever. Not because of his supposed mathematical prowess, but because of his extraordinary observation skills. Pfungst realized that Hans could observe subtle and involuntary clues in the body language of the human asking the question, which, in most cases, was his owner von Osten.

So as it turned out, ‘Clever Hans’ didn’t always have the right answers, especially when the person asking the question did not know the answer themself or if there was a veil between Hans and the questioner. It was Hans’ keen observation skills that helped him answer questions. The horse was encouraged to keep up the performance because he had figured out he’d get rewarded if his answer delighted his audience. Here’s how it played out: After Hans started to tap his foot, the person asking the question inevitably displayed subtle gestures, like straightening their head, when the horse had arrived at the right answer. Hans was smart enough to pick up on these subtle, often involuntary movements, to deduce whether or not a human was pleased with his response.

Now, this article isn’t about animal intelligence but about how the desire to please an audience can take us away from our core mission. It can distract us from our purpose in life or our startup journeys. What worked for Hans is not going to work for us.

As a founder, you usually work on the cutting edge of your industry, with insights derived from the months or years you spent understanding your industry, its pain points, your customers, and their needs. You develop a point of view on how to build the business, how to pace yourself, how much to grow, and when to slow down and consolidate. Often, there are people you speak to for advice, perhaps your peers or sometimes the board members whose judgment or experience you trust. But eventually, every decision you make is your decision, and you should ideally avoid doing something that is deeply influenced by your environment or what you believe your audience (board or investors) will appreciate.

Yet, this is exactly how several of us often behave. We want to look good, we want to be accepted and appreciated by our audience. This is why we are tempted to make decisions that will win us appreciation from our audience (parents, society, board, investors). But a decision made under such circumstances can only make us look good in the short term. As the gifted actor Jim Carrey so succinctly put it, “Your need for acceptance will make you invisible in this world.”

When capital was available in plenty and investors expected fast revenue growth to fund their next round, several founders ended up playing to the gallery. I remember a founder, whom I deeply respect for his ability to think long-term, being swayed by a hedge fund that wanted him to move away from focusing on profits to a path of fast growth, even though it entailed a high burn rate. The fund even committed $100 million to make it happen. This incident is an example of how sometimes even the best folks end up giving in to temptation and, for a brief period, turn into Clever Hans and tap along.

Connecting the Dots

Making decisions based on audience response could have changed podcaster and author Tim Ferris’ career trajectory. In a recent podcast episode, Tim jokes about how his most popular video was the one on “How to peel a boiled egg.” It would have been easier for him to make more such fun ‘how-to’ videos instead of his usual thoughtful podcasts where he deconstructs the tools and tactics world-class performers use to get great outcomes. It was by sticking to his purpose and doing the hard things that he became highly successful as a podcaster.

If you are a musician, you can perform to the audience’s requests, but imagine being a sportsperson and using that playbook. As a cricketer, the audience may want you to play aggressively and swing for the fence. But a mistake would mean you get out and let your team down. The audience moves on to the next game, but the statistics will always remind you of the story. 

It comes down to the incentives: Your incentive is to play the best you can for your team or to build the best company you can and not succumb to the audience’s demand, because their incentive is entertainment or a reward that they care about from your work (a bonus for the hedge fund investor, in my founder’s case).

Steve Jobs had strong points of view on what products he wanted to build. He didn’t believe in listening to his audience (customers). On the contrary, he argued that you shouldn’t listen to what customers want because customers don’t know what they actually want. He believed that you should give them what you think they need. He was (mostly) right—when it comes to the world of tech, exponential innovations become possible when imagination and new technologies converge.

Very few can ever be Steve Jobs, but we can have a strong point of view on how we lead our lives based on what we’ve learned and the beliefs we hold. This view should not sway without just reasoning or be forced to fit within the structures around us. This is hard to do; I have struggled with it several times myself—not only because I want to fit in, but also because several of these influences are subtle and non-obvious. That said, it is also true that nothing great can be accomplished by just following the crowd or blending in. You have to have a differentiated point of view, be willing to back your conviction, and eventually be right for outsized rewards to accrue. 

If you are a founder, follow through on what you think is right for your business— after all, you are the one on the ground and are the closest to the market when compared to your investors. 

I am certainly not suggesting you take the “my way or the highway” approach. You should evaluate advice for its merit, especially when it comes from people whose incentives align with yours. But be wary of consensus opinions and look under the hood of the non-conforming pieces to extract insights. Don’t do something because it will please your stakeholders. Do what is right and what fits your long game.

How do we keep ourselves honest, you may ask. Here are a few clarificatory questions that may help us stick to our path when you feel the pressured to please other stakeholders:

  1. Is the action aligned with my long-term goal and core purpose? 
  2. What’s in it for the people that are advising me or those I am trying to please?
  3. Will I still make the same decision or pursue the same action if no one is watching me, evaluating me, or judging me?

Clever Hans was simply following cues from his master and got carrots, bread, or sugar when his answer pleased others. The beauty of his situation is that he didn’t know what was right or wrong. He was simply tapping his foot until he got to the right answer. So, we can forgive him for playing to the gallery. In our case—based on our own experiences and data—we usually know the right answer, and so what excuse do we have to be Clever Hans?

We are often tempted to
make decisions that will
win us appreciation from our audience – our parents, society, board, or investors. But a decision made under such circumstances can
only make us look good in
the short term.

Here are three articles I found interesting:

16 Strange but Beautiful Paradoxes in Life: I found this to be an easy and interesting read. Each of the 16 paradoxes listed offers insights into various aspects of human experience, encouraging reflection and personal growth.

7 Pieces of Life Changing Writing Advice From Dear Sugar: In my experience, writing is one of the best ways to help one think clearly. In this article, Ryan Holiday distills some of the advice that author of Tiny Beautiful Things, Cheryl Strayed, writes about in her book based on her experience writing the anonymous advice column, Dear Sugar. 

Extreme Brainstorming Questions to Trigger New, Better Ideas: This is a refreshing read on how to escape the assumptions we make by prompting us to think about things by taking them to extreme ends. This challenges traditional thinking patterns by pushing things to the upper limits, such as considering a tenfold increase in prices or operating without any customer contact. By exploring such unusual scenarios, businesses can unlock innovative solutions and potentially discover unique business models.

If you have time for longer reads:

The Archer by Paulo Coelho

The Archer by Paulo Coelho

The prolific writer Paulo Coelho takes us on yet another inspiring journey in The Archer, where, through the teachings of a master archer named Tetsuya, a young boy learns about patience, self-discovery, and taking risks. The book also emphasizes the idea that success comes from aligning with one’s true calling and that every individual possesses the power to shape their destiny. If you enjoyed The Alchemist, chances are you’ll like this too.

Rumi: The Big Red Book by Coleman Barks

Rumi: The Big Red Book by Coleman Barks

In this book, Coleman Barks aims to capture the spiritual wisdom and lyrical beauty of the poems written by Jalaluddin Rumi, the 13th-century Persian scholar and Sufi mystic. The book is an anthology of poems that cover several themes, including love, spirituality, and the search for meaning. As someone who has published several translations and interpretations of Rumi’s work, Bark’s goal is to make Rumi’s ideas accessible to modern readers.

Do write in at gv@peakxv.com if any of my interests intersect with yours! Click here to read more articles on Peak XV’s blog. For more editions of Connecting the Dots, click here. I’m also on LinkedIn and Twitter.