The market was the witness
For years the thing that confirmed my work was money, and money has no mood, no history with me and nothing it needs back. When the income went, the reading went with it, and what was left was people, who
prior
Meaning
Existing expectations formed before new evidence is introduced serve as the starting point for any subsequent update in belief. In the record of a founder, a prior is the set of mental models carried over from a previous venture into a new and different context. These assumptions dictate how a person interprets their first interactions with new partners or markets.
If the assumptions are strong, they may override the actual data until the cost of being wrong becomes too high to ignore.
Initial State
The origin of these beliefs often lies in a period of high success where a specific strategy produced a reliable outcome. Because the strategy worked once, the person in the seat assumes it is a universal law rather than a local coincidence. This state remains fixed until a substantial failure forces a revision of the internal model.
Bayesian Update
Adjusting a belief based on new information requires a willingness to admit that the earlier assumption was incomplete. The record shows that this process is slower for founders who have a high public profile, as the cost of changing one’s mind is higher when the witness is large.
Predictive Value
A well-calibrated set of assumptions allows an operator to move faster by ignoring noise and focusing on the delta between what was expected and what occurred. When the expectations match the reality, the predictive value of the assumptions is high, reducing the energy cost of daily decisions.