‘Entrepreneurs Should Be Miscalibrated’December 24, 2012 6:37 am
We spotted this in a Malcolm Gladwell speech about the 2008 financial crisis – his argument is that overconfidence and hence miscalibration was the root cause of the crisis. His definition of miscalibration is the difference between what you think you know, and what you actually know. He attributes the origins of the 2008 financial crisis to such miscalibration among the top and influential wall street folks in 2007-2008.
“To become miscalibrated, a gap opens up between what you know, and what you think you know. A lot of what we saw in the last financial crisis was a miscalibration problem, it was due to people in incredibly complex worlds thinking they understood every dimension of the risks they took, when in fact they had only a partial understanding of that. That miscalibration of their understanding led them to make some catastrophic errors.”
But this is what we found interesting: Gladwell feels that there are some areas where such miscalibration is not just acceptable, but might even be required: if you are an entrepreneur trying to build something, for example.
Specifically, he says that Entrepreneurs need to be miscalibrated. One reason could be this: If you are not, you are never going to try. There are multiple other reasons we can think of – but the conclusion is the same. Try to be miscalibrated. That is the takeaway.