The idea of exactly what your business is going to be usually comes first. Secondly, most often, is giving a title to your idea. What exactly is going to be the name of your business? Continue reading →
Most of us view the world as more benign than it really is, our own attributes as more favorable than they truly are, and the goals we adopt as more achievable than they are likely to be. We also tend to exaggerate our ability to forecast the future, which fosters overconfidence. In terms of its consequences for decisions, the optimistic bias may well be the most significant cognitive bias.
Because optimistic bias is both a blessing and a risk, you should be both happy and wary if you are temperamentally optimistic. Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person — you already feel fortunate.
Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders — not average people. They got to where they are by seeking challenges and taking risks. They are talented and they have been lucky, almost certainly luckier than they acknowledge. A survey of founders of small businesses concluded that entrepreneurs are more sanguine than midlevel managers about life in general. Their experiences of success have confirmed their faith in their judgment and in their ability to control events. Their self-confidence is reinforced by the admiration of others.
This reasoning leads to a hypothesis: The people who have the greatest influence on the lives of others are likely to be optimistic and overconfident, and to take more risks than they realize.