The Five Cognitive Distortions of People Who Get Stuff Done

The Five Cognitive Distortions

of People Who Get Stuff Done

©2012 Michael C. Dearing

Summary
• 2,190 days, 2,481 companies, 4,515 founders, 62 bets

• Some common patterns of automatic thought among those who get

a lot of stuff done / create tons of value

• Strong patterns of automatic thoughts = cognitive distortions

• Cognitive distortions are filters or lenses that influence thinking,

shape interpretation of reality, basis for action

• The Big Five

o Personal exceptionalism
o Dichotomous thinking
o Correct overgeneralization
o Blank canvas thinking
o Schumpeterianism

©2012 Michael C. Dearing

© 2012 by SAPM / Michael Dearing. All rights reserved. 1

The Five Cognitive Distortions of People Who Get Stuff Done

Classical model of getting stuff done

Rational

Information --> Observation --> Processing --> Conclusion --> Action

Classical model of getting stuff done

Rational

Information --> Observation --> Processing --> Conclusion --> Action

Rational

Information --> Observation --> Processing --> Conclusion --> Action

Rational

Information --> Observation --> Processing --> Conclusion --> Action

© 2012 by SAPM / Michael Dearing. All rights reserved. 2

The Five Cognitive Distortions of People Who Get Stuff Done

Cognitive behavior model of depression

self image
world-view

Information --> Observation --> Processing --> Conclusion --> Action

future expectations

automatic thoughts

© 2012 by SAPM / Michael Dearing. All rights reserved. 3

The Five Cognitive Distortions of People Who Get Stuff Done

Context of depression
Observation distortions Conclusion distortions

• Selective abstraction: • Arbitrary inference: a

Only some information conclusion that is not supported
fragments are accepted by the evidence or for which
for processing there is no evidence

• Magnification / Processing dominated by • Personalization: "it's something

minimization: zooming automatic thoughts I did" or "it's about me"
way in on some info or
zooming out on other info • Dichotomous thinking: "it's
complete sh*t" or "it's
true genius"

• Overgeneralization: making a
universal judgment from
isolated incidents

Note: These types of cognitive distortions were described as "faulty information processing," in Aaron Beck,
A. John Rush, Brian F. Shaw, Gary Emery, Cognitive Therapy of Depression, 1979, p. 14.

Cognitive distortions in humans

Founders

Colleagues Shareholders

Board
Members
Suppliers

Competitors Employees

Customers

© 2012 by SAPM / Michael Dearing. All rights reserved. 4

The Five Cognitive Distortions of People Who Get Stuff Done

Cognitive distortions in humans

Founders

Colleagues Shareholders

Board
Members
Suppliers

Competitors Employees

Customers

Cognitive behavior model of work

self image
world-view

Information --> Observation --> Processing --> Conclusion --> Action

future expectations

automatic thoughts

© 2012 by SAPM / Michael Dearing. All rights reserved. 5

The Five Cognitive Distortions of People Who Get Stuff Done

Five recurring, automatic

patterns of thought (aka
cognitive distortions) among
people who get extraordinary
stuff done in Silicon Valley

Personal Exceptionalism

"I am special."

© 2012 by SAPM / Michael Dearing. All rights reserved. 6

The Five Cognitive Distortions of People Who Get Stuff Done

Personal Exceptionalism
Definition - a macro sense that you are in the top of your
cohort, your work is snowflake-special, or that you are
destined to have experiences well outside the bounds of
"normal;" not to be confused with arrogance or high self-
esteem

Benefit -

Personal Exceptionalism
Definition - a macro sense that you are in the top of your
cohort, your work is snowflake-special, or that you are
destined to have experiences well outside the bounds of
"normal;" not to be confused with arrogance or high self-
esteem

Benefit - resilience, stamina, charisma

Deadly risk -

© 2012 by SAPM / Michael Dearing. All rights reserved. 7

The Five Cognitive Distortions of People Who Get Stuff Done

Personal Exceptionalism
Definition - a macro sense that you are in the top of your
cohort, your work is snowflake-special, or that you are
destined to have experiences well outside the bounds of
"normal;" not to be confused with arrogance or high self-
esteem

Benefit - resilience, stamina, charisma

Deadly risk - assuming macro-exceptionalism means

micro-exceptionalism, brittleness

Macro versus Micro

Macro POV

Micro POV

© 2012 by SAPM / Michael Dearing. All rights reserved. 8

The Five Cognitive Distortions of People Who Get Stuff Done

Dichotomous Thinking

"X is sh*t. Y is genius."

Dichotomous Thinking
Definition - being extremely judgmental of people,
experiences, things; highly opinionated at the extremes;
sees black and white, little grey

Benefit -

© 2012 by SAPM / Michael Dearing. All rights reserved. 9

The Five Cognitive Distortions of People Who Get Stuff Done

Dichotomous Thinking
Definition - being extremely judgmental of people,
experiences, things; highly opinionated at the extremes;
sees black and white, little grey

Benefit - achieves excellence frequently

Deadly risk -

Dichotomous Thinking
Definition - being extremely judgmental of people,
experiences, things; highly opinionated at the extremes;
sees black and white, little grey

Benefit - achieves excellence frequently

Deadly risk - perfectionism

© 2012 by SAPM / Michael Dearing. All rights reserved. 10

The Five Cognitive Distortions of People Who Get Stuff Done

Correct Overgeneralization

"I see two dots and draw the right line."

Correct Overgeneralization
Definition - making universal judgments from limited
observations and being right a lot of the time

Benefits -

© 2012 by SAPM / Michael Dearing. All rights reserved. 11

The Five Cognitive Distortions of People Who Get Stuff Done

Correct Overgeneralization
Definition - making universal judgments from limited
observations and being right a lot of the time

Benefits - saves time

Deadly risk -

Correct Overgeneralization
Definition - making universal judgments from limited
observations and being right a lot of the time

Benefits - saves time

Deadly risk - addiction to instinct and indifference to data

© 2012 by SAPM / Michael Dearing. All rights reserved. 12

The Five Cognitive Distortions of People Who Get Stuff Done

Blank-Canvas Thinking

"Painting by numbers isn't art. And I

want to make art."

© 2012 by SAPM / Michael Dearing. All rights reserved. 13

The Five Cognitive Distortions of People Who Get Stuff Done

Blank-Canvas Thinking
Definition - sees own life as a blank canvas, not a paint-
by-numbers

Benefits -

Blank-Canvas Thinking
Definition - sees own life as a blank canvas, not a paint-
by-numbers

Benefits - no sense of coloring outside the lines, creates

surprises

Deadly risk -

© 2012 by SAPM / Michael Dearing. All rights reserved. 14

The Five Cognitive Distortions of People Who Get Stuff Done

Blank-Canvas Thinking
Definition - sees own life as a blank canvas, not a paint-
by-numbers

Benefits - no sense of coloring outside the lines, creates

surprises

Deadly risk - "Ars gratia artis," failure to launch, failure to

scale

Schumpeterianism

"I am a creative destruction machine."

© 2012 by SAPM / Michael Dearing. All rights reserved. 15

The Five Cognitive Distortions of People Who Get Stuff Done

Schumpeter on Capitalism

• Capitalism matters - powers the miracle of

productivity and wealth creation

• Creative destruction powers capitalism

• Creative destruction = foundational

change (or as Clay Christensen might call
it, disruptive innovation)

© 2012 by SAPM / Michael Dearing. All rights reserved. 16

The Five Cognitive Distortions of People Who Get Stuff Done

Creative destruction
“The opening up of new markets, foreign or domestic, and the
organizational development from the craft shop and factory to such
concerns as U.S. Steel illustrate the same process of industrial
mutation–if I may use that biological term–that incessantly revolutionizes
the economic structure from within, incessantly destroying the old one,
incessantly creating a new one. This process of Creative Destruction is
the essential fact about capitalism. It is what capitalism consists in and
what every capitalist concern has got to live in. . . .”

Joseph Schumpeter, Capitalism, Socialism and Democracy (New York:

Harper, 1975) [orig. pub. 1942], pp. 82-85.

Schumpeterianism
Definition - sees creative destruction as natural,
necessary, and as their vocation

Benefits -

© 2012 by SAPM / Michael Dearing. All rights reserved. 17

The Five Cognitive Distortions of People Who Get Stuff Done

Schumpeterianism
Definition - sees creative destruction as natural,
necessary, and as their vocation

Benefits - fearlessness, tolerance for destruction and pain

Deadly risk -

Schumpeterianism
Definition - sees creative destruction as natural,
necessary, and as their vocation

Benefits - fearlessness, tolerance for destruction and pain

Deadly risk - heartless ambition, alienation

© 2012 by SAPM / Michael Dearing. All rights reserved. 18

The Five Cognitive Distortions of People Who Get Stuff Done

Automatic Thought Patterns aka

Cognitive Distortions
• Personal Exceptionalism
• Dichotomous Thinking
• Correct Overgeneralization
• Blank-Canvas Thinking
• Schumpeterianism

What is missing?
What resonates? What doesn't?
What would happen if you picked investments this way?

Thanks!

[email protected]

© 2012 by SAPM / Michael Dearing. All rights reserved. 19