The one psychological bias a Nobel prize winner would eliminate if he could.

Welcome to the 10th edition of Startup Strategist. It's Friday, and we hope today's topics will make your morning (or day) just a little bit better. Let's jump in!

• The one psychological bias Nobel prize winner would eliminate if he could.

• News: 1X raises another $100M

• AI Idea: Expense Management App for Shared Expenses

Overconfidence

As a psychologist who has been in the field for well over half a century, Daniel Kahneman appears well suited for distinguishing which judgment errors are most harmful. 

As you might be aware from reading past editions, I’ve nearly completed his more recent book, Noise.

This led me to do some searching online, where I encountered an article about which bias he would eliminate if he could only eliminate one. 

He answered: “Overconfidence”.

I came across a Substack post by Lionel Page that explains it better than I could.

A relevant quote from Page’s article:

“Self-esteem is a benefit that occurs in our head, but overconfidence is bound to lead to costly mistakes in the real world.”

Tangentially related to this is survivorship bias. If a certain set of successful people are there in part because of their confidence, how many people with similar levels of confidence fail, and to what extent are the success of the winners attributable to luck instead?

This reminds me of the desire to construct coherence according to Kahneman. 

For example, if someone is successful, or a stock falls or rises, we are quick to attribute it to the logical reason available to us, when often, that is not the real reason. 

In terms of startups, a commonly quoted statistic is that 90% of startups fail. 

Our sponsor

Keep up with Tech in 5 minutes. Get the most important tech news in a free daily email. Read by +1,250,000 software engineers and tech workers. Subscribe to TLDR in one click here.

News story

OpenAI-backed 1X raises another $100M for the race to humanoid robots (TechCrunch)

1X is a company from Norway that intends to address labor shortages with humanoid robots.

Expense Management App for Shared Expenses

Splitting bills and managing shared expenses can be a source of frustration among friends, roommates, and colleagues. Developing a user-friendly expense management app that simplifies and automates the process of splitting bills and tracking shared expenses can address this pain point. Market size: The global personal finance software market is expected to reach $1.57 billion by 2026, with a CAGR of 6.2%.

That’s all for today, thank you for reading. See you on Tuesday.

Want to sponsor the newsletter? Contact us at [email protected] 

Disclaimer: The startup ideas shared in this forum are offered for general consideration and discussion. Individuals utilizing these concepts are encouraged to exercise independent judgment and undertake due diligence per legal and regulatory requirements.

Business illustrations by Storyset: https://storyset.com/business