You can take two perspectives on markets.
The right things are known. If a market is working well then the right things are being allocated the way they should be.
The right things are unknown. A market, by its nature, is that pursuit of truth. When it is working poorly it is that it is not allowed to seek the truth, however odd it may appear to us.
The difference in these definitions may feel academic. What, does it matter to you, for how a market works?
In reading these two things they touch on a deeper way of operating. If you believe the first statement you will perhaps not approach building your company in a way that seeks what is true and correct but instead you’ll try to allocate what you build the right way.
This may work out for you. Yet, it seems more often than not it will fail. After all, the reality that every entrepreneur faces is that they do not know everything. They try things, they learn from those things, and they adjust. There is a difference in how long they wait to try, what response they look to, and how much they’re willing to adjust, yet those components are all there.
More importantly, they are there in the market. Any individual entrepreneur can choose to not learn. This is fine. If they’re able to be correct the first time, without learning, their company will do fine as long as that stays true. If they’re wrong, they won’t have a company.
So this suggests that truly the best way to operate is to approach the market with the second definition. That the right thing is unknown, and the market is a truth seeking processes. This means, that for you to be successful, finding the truth more efficiently and arriving at a higher resolution version of those truths is one way to think about how a company wins within a market.
Said in more clear terms. If you can find out what your customers want and how much they’ll pay for it faster and more accurately than the competition and how to deliver that faster and more cheaply than your competition then you’ll win. Do that continuously, you’ll build a lasting business.
So this means that within your company there is value in actually looking to how you build a business that values truth and the seeking of truth.
I hope that realizing the value of truth seeking is enough to help you arrive at a company that values truth seeking, but the reality is that it probably isn’t. The biggest issue that I’ve seen is that you do not help the other side make their argument when they’re just not good at making an argument.
That is how you truly land at the truth. Not by allowing arguments to be won, but in fact ensuring that every logical statement is brought to the table in the strongest way possible.
What does this mean practically?
If you have a higher role than someone then when they push back embrace it. Take their argument, steelman it and walk them through what specific point you’re unable to agree with. Do that consistently.
If you have deep technical expertise that someone else is missing yet the conversation relies on the technical expertise, don’t dismiss a segment of the argument as “technical stuff” and believe that will be a strong leg for your argument to stand on. Instead, if you truly understand it you can explain it simply. So explain it simply and bring the other person into your world. If someone does that to you, demand the same respect and explanation. There’s no “so much money because of my deal so do it!” or “Engineering is hard cause like code and compiling stuff, so back off” argument that actually helps you get to truth.
If your company culture values a certain way of arriving at a decision, recognize when someone isn’t aware of that culture. Again, steelman their argument and work through that aspect of the culture with them. If it’s a culture of written arguments, show them good examples, then ask them to come back with their own. If it’s a culture of data, help them get the data and navigate any nuances they may not be ready for.
All these things may feel like they involve a lot of extra work. They do! Yet, if you’re skipping them you’re not working towards the truth. You may be winning internal battles. And yes, I’m sure you believe you’re right. Yet, before long your company will be making decisions that aren’t about truth but instead rely on whatever in the above becomes the most common. It may be the “highest paid person in the room” or it may be whoever can build consensus the fastest. It may be the person who has the data, or it may be whatever function the company happens to value.
None of those are ways to build a company which rapidly seeks the truth and arrives at it. Yet, if the market is a truth seeking mechanism. If the best way to build a successful company is to build one that finds out what customers want and how to do it faster and better than everyone else in the market. Then you will benefit from that extra effort at finding the truth.