the grizzly bear has been honed by
evolution to be the perfect predator it
can weigh up to 600 pounds or 300
kilograms it can run faster than any
horse and certainly faster than any
human it is at the top of its food chain
and is able to chase catch and consume
any land animal in North America its
Latin name is Ursus horribilis
the horrible bear when I was a young man
I herded cattle horses and tourists
through the Rocky Mountains of Wyoming I
wasn’t just comfortable in the
wilderness I craved it the solitude of
wild rugged landscapes and wild rugged
animals like the grizzly bear mountain
lion deer elk they forged my character
and they fed my soul so when I got my
high school college was not enticing so
I didn’t go
instead I joined the state agency that
monitors and tracks and protects grizzly
bears what better way I thought for me
to expand and extend my love of the
wilderness than to study these animals I
was wrong
typically when I would travel through
the backcountry
I would intentionally avoid grizzly
bears or I’d make loud noises to scare
them away now in this job I was trying
to find grizzly bears and trying to
sneak up on them studying their
carnivorous habits brought that
knowledge from the background into the
foreground I was terrified during the
day as I was walking on trails a branch
would break and I was absolutely sure
that it was a grizzly bear ready to eat
me I would see a stump and was sure that
it was a gruesome everyday evening at
night lying in my tent was the worst I
thought that I was a grizzly bear
burrito and I was going to be the Chen
the tender chewy center
I at the age of eighteen tough macho kid
didn’t sleep for a week I would cry all
night in terror
I didn’t eat for four days so the
wilderness of Wyoming had been
transferred transformed from heaven on
earth to hell on earth at night I would
try and count sheep in order to fall
asleep and instead inevitably I would
find myself counting grizzly bear teeth
42 grizzly bear has 42 teeth so then one
day I in the middle of the summer
just south of Yellowstone National Park
we happened upon a 500 pound male
grizzly bear he was a monster and he was
eating the carcass of a deer that had
probably died in a winter avalanche and
had only been recently uncovered by
melting snow he had eaten 200 pounds of
meat the equivalent for us of a 60 pound
hamburger in one sitting so we
approached him to conduct our medical
tests our adrenaline was pumping we had
our guns drawn and he rolled over on his
back lazily waved a massive claw in our
direction and went back to sleep we
conducted our tests and left no drama no
danger no damage so this encounter
entirely changed my opinions I had found
that many of my assumptions and fears
about grizzly bears were wrong and as a
result I also gained self confidence I
decided that perhaps I could go to other
environments that were equally harsh
with equally nasty predators and perhaps
survive and maybe even thrive so I left
Wyoming and I became an entrepreneur in
Silicon Valley so fast forward 25 years
I was part of a small team in Palo Alto
that was making a SmartWatch we were
taking all of the functionality of a
smartphone and putting it onto a small
package the office was about three miles
from Apple and three miles from Google
so we wanted
keep this a secret we operated in
stealth mode in the hopes that once we
launched a product we would get a jump
on our competitors including these tech
behemoths so we could gain some early
market share and some profits we were
what very well-funded
we had a partnership with Foxconn which
is the world’s largest manufacturer of
consumer electronics we had a team of
motivated Silicon Valley veterans and we
had a product that was packed with
interesting technologies when we
launched the product into the market
nobody bought it this was a disaster
perhaps it had been because we didn’t
talk to customers because we were in in
stealth mode but I didn’t know so I
vowed to search for the recipe that
would help entrepreneurs create
successful disruptive businesses that
would provoke change in entire
industries the first part of this recipe
is 400 years old
Copernicus and Galileo observed
celestial movements and they concluded
that conventional wisdom was wrong the
Sun did not move around the earth
instead the earth moves around the Sun
Galileo said the Scott Truths are easy
to understand once they’ve been
discovered the point is to discover them
their legacy to us is the scientific
method where we declare assumptions and
then we reconstruct those assumptions
into falsifiable hypotheses which we
test with direct evidence let me give
you the epilogue for the SmartWatch
company we were running low on money
running low on motivation we looked for
buyers for the company we didn’t find
any we had always assumed that Google
would be indifferent or perhaps even
antagonistic to our efforts but the CEO
set up a meeting anyway he sold the
company to Google in 43 minutes he had
had an assumption that he decided to
test
with direct evidence and as a result he
dramatically improved the outcome for
all of us in order to find further
nuances of this recipe for successful
entrepreneurship I study business
incubators including the hope prize
which is a sister organization to the
Hult International Business School every
year thousands of students from hundreds
of different schools compete to design
new ventures that solve global problems
and if they win they get a million
dollars to launch their venture last
year for example the challenge was how
to design a venture that would bring 10
million people in urban slums out of
poverty in ten years so here are some
empirical results from my studies first
the entrepreneurs who used the
scientific method did 2.6 times better
than entrepreneurs that relied on
midnight epiphanies or gut instinct this
statistic also shows you that there are
lots of entrepreneurs who are still
relying on midnight epiphanies and gut
instincts the second finding is that for
every hypothesis that an entrepreneur
confirmed with direct evidence as being
valid their chance of success in the
competition increased by 3.3 percent for
every hypothesis they confirm success
went up by 3.3 percent even more
interesting though is that for every
hypothesis they rejected using direct
evidence to determine that they via the
assumption was invalid their success
went up by 4.6 percent what explains
this difference why is rejection so much
more powerful than confirmation so for
this we need to move beyond just the
process of the scientific method to
start to understand the mind of the
person conducting the scientific method
so let me introduce you to angel angel
was my mule in the backcountry she
carried all of my gear
an angel kicked when she was happy she
kicked when she was sad she kicked in
the morning she kicked at night she
kicked I say hello she kicked I put
stuff on her she’d kick I’d ask her to
walk she’d kicked she was incredibly
stubborn in fact she was stubborn as a
mule entrepreneurs are also simile
obstinate and we are prone to
confirmation bias which means that we
subconsciously interpret new evidence as
supporting what we already believe to be
true so it’s possible that entrepreneurs
who have collected lots of confirmed
hypotheses are not actually on their way
to a perfect venture but instead just
demonstrating their bias on the other
hand entrepreneurs who have collected
and rejected hypotheses are
demonstrating objectivity that they are
willing to listen to and follow the data
this study of the Hult prize and other
incubators has led to also another
interesting conclusion around
self-confidence entrepreneurs who are
already self confident in their ability
to eventually find a profitable business
are much more likely to use the
scientific method furthermore
entrepreneurs whether they started with
self confidence or not who use the
scientific method increase their self
confidence to use evidence which means
that they’re not only perfecting the
business that they’re working on now at
the time but they’re also perfecting
their decisions far into the future this
echoes my own experience with that
grizzly-bear
tested some assumptions rejected them
and found that I was more self confident
for future performance Muse Anna is a
company that illustrates this point
these were students who entered the Hult
prize with the desire to create a more
economical food cart for street vendors
starting in Kampala Uganda the founder
Natalie told me
all of our initial assumptions were
wrong now I confess I must bear some
responsibility for this these were
students of mine and some of those wrong
assumptions had been my suggestions she
said it was incredibly painful just when
they thought they had found a solution
that solved a problem and they were
getting excited about it they they
determined that they had to go to into a
different direction they persevered they
continued to test and reject assumptions
until they found the right ones
lisanna was a finalist in the Hult prize
competition and is now offering
different food cart solutions in several
different locations in East Africa so
the search for a successful venture for
an entrepreneur just like wandering
through the Wyoming wilderness can be
torturous and terrifying but if we
declare our assumptions structure them
as hypotheses collect evidence test our
hypotheses confirm and even better
reject our hypotheses we end up with
better entrepreneurial outcomes that are
more likely to capture consumer demand
moreover we develop self-confidence we
become better entrepreneurs for future
startups and future decisions so let me
summarize this in a sentence
entrepreneurs create success and improve
self-confidence through rejection this
was true for grizzly bear biologists it
was true for high tech entrepreneurs
it’s true for students in the Hult prize
and I contend that it will be true for
you thank you
[Applause]
evolution to be the perfect predator it
can weigh up to 600 pounds or 300
kilograms it can run faster than any
horse and certainly faster than any
human it is at the top of its food chain
and is able to chase catch and consume
any land animal in North America its
Latin name is Ursus horribilis
the horrible bear when I was a young man
I herded cattle horses and tourists
through the Rocky Mountains of Wyoming I
wasn’t just comfortable in the
wilderness I craved it the solitude of
wild rugged landscapes and wild rugged
animals like the grizzly bear mountain
lion deer elk they forged my character
and they fed my soul so when I got my
high school college was not enticing so
I didn’t go
instead I joined the state agency that
monitors and tracks and protects grizzly
bears what better way I thought for me
to expand and extend my love of the
wilderness than to study these animals I
was wrong
typically when I would travel through
the backcountry
I would intentionally avoid grizzly
bears or I’d make loud noises to scare
them away now in this job I was trying
to find grizzly bears and trying to
sneak up on them studying their
carnivorous habits brought that
knowledge from the background into the
foreground I was terrified during the
day as I was walking on trails a branch
would break and I was absolutely sure
that it was a grizzly bear ready to eat
me I would see a stump and was sure that
it was a gruesome everyday evening at
night lying in my tent was the worst I
thought that I was a grizzly bear
burrito and I was going to be the Chen
the tender chewy center
I at the age of eighteen tough macho kid
didn’t sleep for a week I would cry all
night in terror
I didn’t eat for four days so the
wilderness of Wyoming had been
transferred transformed from heaven on
earth to hell on earth at night I would
try and count sheep in order to fall
asleep and instead inevitably I would
find myself counting grizzly bear teeth
42 grizzly bear has 42 teeth so then one
day I in the middle of the summer
just south of Yellowstone National Park
we happened upon a 500 pound male
grizzly bear he was a monster and he was
eating the carcass of a deer that had
probably died in a winter avalanche and
had only been recently uncovered by
melting snow he had eaten 200 pounds of
meat the equivalent for us of a 60 pound
hamburger in one sitting so we
approached him to conduct our medical
tests our adrenaline was pumping we had
our guns drawn and he rolled over on his
back lazily waved a massive claw in our
direction and went back to sleep we
conducted our tests and left no drama no
danger no damage so this encounter
entirely changed my opinions I had found
that many of my assumptions and fears
about grizzly bears were wrong and as a
result I also gained self confidence I
decided that perhaps I could go to other
environments that were equally harsh
with equally nasty predators and perhaps
survive and maybe even thrive so I left
Wyoming and I became an entrepreneur in
Silicon Valley so fast forward 25 years
I was part of a small team in Palo Alto
that was making a SmartWatch we were
taking all of the functionality of a
smartphone and putting it onto a small
package the office was about three miles
from Apple and three miles from Google
so we wanted
keep this a secret we operated in
stealth mode in the hopes that once we
launched a product we would get a jump
on our competitors including these tech
behemoths so we could gain some early
market share and some profits we were
what very well-funded
we had a partnership with Foxconn which
is the world’s largest manufacturer of
consumer electronics we had a team of
motivated Silicon Valley veterans and we
had a product that was packed with
interesting technologies when we
launched the product into the market
nobody bought it this was a disaster
perhaps it had been because we didn’t
talk to customers because we were in in
stealth mode but I didn’t know so I
vowed to search for the recipe that
would help entrepreneurs create
successful disruptive businesses that
would provoke change in entire
industries the first part of this recipe
is 400 years old
Copernicus and Galileo observed
celestial movements and they concluded
that conventional wisdom was wrong the
Sun did not move around the earth
instead the earth moves around the Sun
Galileo said the Scott Truths are easy
to understand once they’ve been
discovered the point is to discover them
their legacy to us is the scientific
method where we declare assumptions and
then we reconstruct those assumptions
into falsifiable hypotheses which we
test with direct evidence let me give
you the epilogue for the SmartWatch
company we were running low on money
running low on motivation we looked for
buyers for the company we didn’t find
any we had always assumed that Google
would be indifferent or perhaps even
antagonistic to our efforts but the CEO
set up a meeting anyway he sold the
company to Google in 43 minutes he had
had an assumption that he decided to
test
with direct evidence and as a result he
dramatically improved the outcome for
all of us in order to find further
nuances of this recipe for successful
entrepreneurship I study business
incubators including the hope prize
which is a sister organization to the
Hult International Business School every
year thousands of students from hundreds
of different schools compete to design
new ventures that solve global problems
and if they win they get a million
dollars to launch their venture last
year for example the challenge was how
to design a venture that would bring 10
million people in urban slums out of
poverty in ten years so here are some
empirical results from my studies first
the entrepreneurs who used the
scientific method did 2.6 times better
than entrepreneurs that relied on
midnight epiphanies or gut instinct this
statistic also shows you that there are
lots of entrepreneurs who are still
relying on midnight epiphanies and gut
instincts the second finding is that for
every hypothesis that an entrepreneur
confirmed with direct evidence as being
valid their chance of success in the
competition increased by 3.3 percent for
every hypothesis they confirm success
went up by 3.3 percent even more
interesting though is that for every
hypothesis they rejected using direct
evidence to determine that they via the
assumption was invalid their success
went up by 4.6 percent what explains
this difference why is rejection so much
more powerful than confirmation so for
this we need to move beyond just the
process of the scientific method to
start to understand the mind of the
person conducting the scientific method
so let me introduce you to angel angel
was my mule in the backcountry she
carried all of my gear
an angel kicked when she was happy she
kicked when she was sad she kicked in
the morning she kicked at night she
kicked I say hello she kicked I put
stuff on her she’d kick I’d ask her to
walk she’d kicked she was incredibly
stubborn in fact she was stubborn as a
mule entrepreneurs are also simile
obstinate and we are prone to
confirmation bias which means that we
subconsciously interpret new evidence as
supporting what we already believe to be
true so it’s possible that entrepreneurs
who have collected lots of confirmed
hypotheses are not actually on their way
to a perfect venture but instead just
demonstrating their bias on the other
hand entrepreneurs who have collected
and rejected hypotheses are
demonstrating objectivity that they are
willing to listen to and follow the data
this study of the Hult prize and other
incubators has led to also another
interesting conclusion around
self-confidence entrepreneurs who are
already self confident in their ability
to eventually find a profitable business
are much more likely to use the
scientific method furthermore
entrepreneurs whether they started with
self confidence or not who use the
scientific method increase their self
confidence to use evidence which means
that they’re not only perfecting the
business that they’re working on now at
the time but they’re also perfecting
their decisions far into the future this
echoes my own experience with that
grizzly-bear
tested some assumptions rejected them
and found that I was more self confident
for future performance Muse Anna is a
company that illustrates this point
these were students who entered the Hult
prize with the desire to create a more
economical food cart for street vendors
starting in Kampala Uganda the founder
Natalie told me
all of our initial assumptions were
wrong now I confess I must bear some
responsibility for this these were
students of mine and some of those wrong
assumptions had been my suggestions she
said it was incredibly painful just when
they thought they had found a solution
that solved a problem and they were
getting excited about it they they
determined that they had to go to into a
different direction they persevered they
continued to test and reject assumptions
until they found the right ones
lisanna was a finalist in the Hult prize
competition and is now offering
different food cart solutions in several
different locations in East Africa so
the search for a successful venture for
an entrepreneur just like wandering
through the Wyoming wilderness can be
torturous and terrifying but if we
declare our assumptions structure them
as hypotheses collect evidence test our
hypotheses confirm and even better
reject our hypotheses we end up with
better entrepreneurial outcomes that are
more likely to capture consumer demand
moreover we develop self-confidence we
become better entrepreneurs for future
startups and future decisions so let me
summarize this in a sentence
entrepreneurs create success and improve
self-confidence through rejection this
was true for grizzly bear biologists it
was true for high tech entrepreneurs
it’s true for students in the Hult prize
and I contend that it will be true for
you thank you
[Applause]
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