The Streetlight Effect
I think a lot of life is explained by the Streetlight Effect.
A policeman sees a drunk man searching for something under a streetlight and asks what the drunk has lost. He says he lost his keys and they both look under the streetlight together. After a few minutes the policeman asks if he is sure he lost them here, and the drunk replies, “no”...The policeman asks why he is searching here, and the drunk replies, "this is where the light is".
In the world of startups, attribution can be very challenging. Why did a certain thing happen? How to decide what to do next? There’s often meager data to answer these questions. In this type of environment, the Streetlight Effect can be hard to avoid.
One example in VC is that at the idea stage of a startup, it’s tempting for an investor to spend more time evaluating a founder’s idea than evaluating the founder. The streetlight shines brighter on the idea. The underlying qualities of a founder and a founder’s motivations are more subtle, yet more deterministic.
The most successful founders and investors tend to be comfortable with the streetlight shining on themselves. When something goes wrong, they are accountable for their contribution. Owning failure is the best way to learn from it.
For some people who make mistakes, the streetlight always seems to shine away from them. Unfortunately, this seems to be what we expect from our politicians - a politician who changes their view is ridiculed as a “flip flopper.” Perhaps I’m a tech partisan, but I think aversion to accountability is less common in tech startups than in other areas of society. Thank goodness.