Startup Cargo Cults: Don’t Be One

by Sam Blan and Mara Schmid

Leo Polovets over at Coding VC has written an excellent analysis for investors about avoiding “startup cargo cults”. But entrepreneurs can make life easier on investors like Mr. Polovets, as well as themselves, if they avoid building a cargo cult startup in the first place. At BBG, we have worked hard to separate ourselves from the herd, and we wanted to share some of our observations from the entrepreneurial side.

First things first: what’s a cargo cult? A “cargo cult” is an anthropological concept describing how some cultures developed religious practices after misunderstood interactions with technologically advanced visitors. The classic example, used by Richard Feynman, describes how one group had seen airplanes landing on their island with loads of materials during wartime. After the war, they created a runway with a wooden hut for a controller, who would sit there wearing wooden headphones with wooden antennas in an attempt to recreate what they had witnessed and bring forth similar planes loaded with goods. Of course, the planes never came, so “cargo cult” is now a metaphor for instances where the outward look and show of something is reproduced while at least one critical underlying concept is completely missed.

A perfect example of a cargo cult startup is Theranos, the biotech company started by Elizabeth Holmes. Theranos claimed it could perform dozens of medical tests from a single drop of blood, and subsequently was valued at billions of dollars. Yet those claims have fallen apart, and no evidence shows Theranos ever had revolutionary technology. One of the reasons Theranos had such a good run of it was that its founder was extremely good at matching the outer trappings of a successful company. An acolyte of Steve Jobs, she copied everything from his extreme secrecy to his signature black turtleneck. The fact that there was no Jobsian-level innovation to back it up—well, that’s where the “cargo cult” aspect comes in.

So how can you—the innovator, the entrepreneur, the dreamer—avoid cargo cult behavior? There’s no silver bullet, but we’ve put together a list of tips based on our own observations as entrepreneurs and our experience working with startups at Blak Box Group.

1. Know yourself, and be true to yourself.

The biggest problem with cargo cults is that they attempt to copy something external… something that they do not fully understand… something that is not what they are. The old adage says that imitation is the highest form of flattery, but that’s not going to bring you success. Whether it’s your entire marketing strategy or that daily team yoga sesh, don’t do something because other people do it. If it doesn’t fit you, your team, your company, or your brand, ditch it.
We have a motto at Blak Box: “Thinking from the inside out.” Internally, you instinctively know what’s best for you. You know right from wrong. Listen to that voice. (And don’t get us wrong, we’re not knocking yoga—we even tried the daily yoga thing ourselves before realizing we are more meditation types. 😉
2. Be willing and able to hear when you are wrong.
Cargo cults are built around yes-men and group-think. If the people you surround yourself with are always agreeing with you, you have a major problem. Find friends, colleagues, mentors, and employees who will be honest with you even when it’s difficult.
At Blak Box, our offices are made up of a series of big rooms. As the CEO, I (Sam) sit with everyone and always will. I cannot build this company on my own, and as I recently told my team members, “You are all made up of your collective experiences. They are what make you rich, they are what make you unique—and it is those unique experiences that I tap into to enhance my own understanding.” The idea of interdependence is strong at BBG.3. Continually evaluate what you think you know.

Cargo cults thrive on unexamined beliefs. When an incorrect assumption is made and carried forward, it may take months or even years for the full implications of that error to come to fruition. Just because something was once true doesn’t mean it still is; just because you believed something once doesn’t mean you have to believe it forever. A nimble mind can move from idea to idea with ease.

4. Learn how your brain works and the common fallacies likely to trip you up.

Humans excel at making certain types of mistakes. Confirmation bias, anecdotal bias, cognitive dissonance, the pattern-seeking fallacy… our brains love to trick us into certainties that don’t exist. A little study into how your brain works can go a long way toward saving from cargo-cult-like errors. Need a recommendation on where to start? We love Mistakes Were Made (But Not By Me) by Carol Tavris and Elliot Aronson.

5. “Hang the code, and hang the rules. They’re more like guidelines anyway.”

The more tightly you hang to rules and generalizations, the more you will miss the opportunities and challenges in a given set of specifics. That tangent you thought might not be important could become a new revenue stream, a new client, or a new way of learning. It’s important to stay open.

6. Work smarter, not harder.

When something isn’t working, reevaluate. Don’t keep pouring time and resources into it expecting a different outcome. If you aren’t sure–take a walk. Still not sure? Keep walking.

7. Look to the future.

The surest way to be left in the dust is to copy what’s happening right now. We live in a world that is changing faster than it ever has before. What will the next 10 years bring? How will the next generation add value to what we have built?
Don’t chase the present. Help shape the future.

We read a lot here at BBG, because just like everyone’s unique experiences makes up the whole of our direction and perspective, those we admire make up the zeitgeist. We want to thank Leo Polovets for inspiring this post. His insights made us a stronger company going forward.


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