A Deep Tech Founder’s Guide to Better Decision-Making
3 Mental Traps Even Brilliant Startups Fall Into and How to Avoid Them
Startups face a constant stream of decisions—some routine, some make-or-break. Yet, even the smartest teams can fall into common traps that cloud their judgment. What if it turns out that some of your most confident decisions are actually being shaped by invisible mental shortcuts?
Psychologist and Nobel laureate Daniel Kahneman spent decades showing us just how often our brains trick us. Kahneman’s profound insight is that “people do not just get hard problems wrong [...], they get utterly trivial problems wrong because they don’t think about them in the right way.” His bestseller Thinking, Fast and Slow breaks down the two systems in the brain that guide our judgments:
System 1 is the brain’s default mode. It is fast, automatic, emotional, and effortless, which is useful when we need speed or rely on experience. But it’s also where cognitive biases (systematic errors in reasoning shaped by our subjective perception of reality) tend to occur. These shortcuts can feel right in the moment but they can also lead to flawed reasoning.
System 2, by contrast, is slow, deliberate, and logical. Our brains are naturally reluctant to engage System 2 because it requires effort. Often, System 2 isn’t stepping in to rethink but to rationalize what System 1 already decided.
Both systems are essential, but if you don’t know which one is in control, your startup might be running on autopilot just when clarity matters most.
So, what can Kahneman teach founders about decision-making? Let’s dig in.
The Overconfidence Trap
Overconfidence is one of the most persistent (and dangerous) biases for startup teams. It’s the belief that we know more than we actually do, or that we’re less likely to make mistakes than others. In startups, overconfidence often shows up as overly ambitious product roadmaps, optimistic launch dates, and pitches that gloss over risks or weaknesses. Even seasoned professionals rarely become less overconfident with experience—a finding Kahneman emphasizes repeatedly.
This bias can push teams to move fast and take bold steps, which sometimes pays off. But it can also lead to missed deadlines, underestimated costs, and hard lessons learned too late. Kahneman’s research reminds us that acknowledging what we don’t know is just as important as betting on what we do.
The Planning Fallacy
The planning fallacy describes our tendency to underestimate the time, costs, and risks involved in future tasks—even when past experience tells us otherwise. It’s optimism bias at work: we convince ourselves that this time will be different, the team will move faster, or the product will be simpler. Even when people are explicitly told about the planning fallacy, they still underestimate timelines. That’s why relying on data over intuition is key.
For startups, the planning fallacy can lead to overly optimistic assumptions about how quickly customers will adopt a new product, how easy it will be to scale marketing efforts, or how soon early feedback will lead to product-market fit. As a result, teams scramble when reality doesn’t match the plan, which can erode trust with investors, partners, and even co-founders.
Loss Aversion
Loss aversion is our tendency to feel the pain of losing something more intensely than the pleasure of gaining something of equal value. Put simply, losing €10 hurts more than gaining €10 feels good. While this may seem like a small quirk, the same emotional bias can shape much bigger decisions.
In startups, loss aversion can show up as resistance to change—clinging to a strategy or product not because it’s working, but because walking away would feel like failure. That emotional discomfort can override clear evidence that it’s time to pivot.
Kahneman’s key insight is that we don’t act rationally based on objective facts alone—we react to how outcomes are framed as gains or losses. Simply framing the same decision (e.g., a strategy shift) as a win rather than a loss can flip someone’s decision, even when the underlying facts stay exactly the same.
So… What Now?
Awareness is a necessary start, but it’s not enough. As Kahneman cautions, even experts struggle to avoid bias in the moment. That’s why we need to design systems, habits, and team processes that reduce the room for error.
Structure in decision-making, when thoughtfully designed, doesn't stifle innovation. It creates the conditions for innovation to thrive by reducing noise and freeing cognitive capacity for creative thinking.
Here are a few strategies you and your team can start implementing into your decision-making processes right away:
Challenge Assumptions & Seek Disconfirmation
Conduct a pre-mortem: A proactive planning exercise where a team assumes a project has failed and then works backwards to identify possible internal and external reasons why it failed. This helps uncover hidden risks early, encourages honest feedback, and strengthens the project plan before launch.
Look for disconfirmation: Actively seek out evidence that could disprove your assumptions. The more they withstand such tests, the more credible they become.
Use Evidence & External Benchmarks
Run experiments, not validations: Don’t just look for evidence that supports your ideas, design experiments that could prove you wrong. The goal is to test your assumptions, not confirm them.
External reference points: Use base rates from credible sources rather than gut instinct. What happened to others who launched a similar product? What did their timelines actually look like?
Plan Realistically
Add buffers, then double them: People consistently underestimate the time and effort it takes to complete whatever it is that they are working on. Adjusting your timeline beyond your initial estimate helps counter that bias.
Celebrate realism, not just ambition: Encourage teams to be honest, not heroic, about scope and effort.
Consider Your Choices
Reframe decisions in terms of opportunity cost: Instead of just asking what a change costs, ask what you lose by not making it.
Conduct “regret minimization” exercises: A year from now, which choice will you wish you had made today? What decision would leave you with the least regret, even if things don’t go as planned?
Build a Healthy Culture
Create a culture that tolerates smart failure: If every mistake feels fatal, people will avoid risks that could lead to meaningful innovation.
Diversify perspectives: Hire people with different backgrounds and thinking styles, not just culture fits.
The Bottom Line
Even the smartest teams are still human and vulnerable to mental traps that operate below the surface. The good news: while we can’t eliminate these biases, we can design smarter decision environments to reduce their impact. Simply knowing these tendencies exist is a start, but real progress comes from building habits, systems, and team processes that keep them in check. That’s what makes for stronger entrepreneurs, sharper strategists, and better decisions—in business and beyond.