Job Interview

Yesterday, I had a phone interview with a West Coast start-up company.  Relevant to this blog, the interviewer briefly discussed the differing approach of venture capital (VC) firms - specifically East Coast versus West Coast.  

Paraphrased, the interviewer said: "East Coast VC firms try to create a detailed financial model and analysis - and inevitably lose the deal.  West Coast firms tend to look at the principals and invest based on their track record."

Got that?  Now, my question:  What cognitive biases (from this list of cognitive biases) are illustrated in the interviewer's comment? ?

First, the statement itself is stereotyping: generalizing characteristics to reduce complexity.  Given the context (a brief verbal aside), we'll give the interviewer a pass (for now).

Second, the East Coast VC firms are being accused by the interviewer of committing an error in framing relative to West Coast VC firms.  Specifically, I believe the East Coast VC firms are implicitly being accused of being "Wall Street types" with accompanying professional biases (bias:  déformation professionnelle).   This flaw is "confirmed" by noting  that the result is usually "losing the deal" which is an example of the interviewer applying outcome bias.  (Again, given the brief aside we'll give the interviewer a "pass" for now.)

Third, the West Coast firms are praised for focusing on record or experience of the key principals (founders, etc.).  I'd argue that this potentially illustrates a false sense of control (bias: illusion of control).

Fourth, I should note that the interviewer has made investments as a West Coast VC member, so the interviewer's comments should be viewed as potentially suffering from confirmation bias, bandwagon effect and any number of other cognitive biases given his membership in that group!

Finally, I'm no better than the interviewer or the VC firms - for I am framing around the interviewer's stereotype - and clearly putting too much significance on a brief comment (bias: focusing effect).  Net:  I am clearly suffering from bias blind spot or "the tendency not to compensate for one's own cognitive biases."  Onward!

Is my Microsoft Zune 1.0 a paperweight?

On Thursday, I succumbed to temptation and bought a first generation (1G) Zune from Microsoft. The siren call was great price -- a $99 special from woot -- and the knowledge that I could upgrade a 1G Zune to the latest 2G firmware. But given that I own a perfectly functional 5G iPod from Apple, I have to admit that my purchase was more technolust than rational action.

Thus, you can imagine my reaction when encountering the following post on The Motley Fool Microsoft stock discussion board regarding the Zune 1.0:

"It's basically a doorstop now, possibly a paperweight."

I would argue that this post displays a touching lack of... reality. Certainly, the Zune 1.0 has had lots of negative reviews, but I'm hopeful that my new purchase will prove to be more than a paperweight.

But I'm hardly an objective observer given my purchase of a Zune. In fact, I may be suffering from several cognitive biases, including post-purchase rationalization and optimism bias.

Disclosure: At time of posting, I owned shares of Microsoft (MSFT).