Get All Access for $5/mo

How to Account for Cognitive Biases as an Entrepreneur Cognitive biases are unavoidable. They're something we all have to deal with. But with these strategies, you can minimize your susceptibility to them, and ultimately make more rational, objective decisions as an entrepreneur.

By Timothy Carter Edited by Jessica Thomas

Opinions expressed by Entrepreneur contributors are their own.

Andriy Onufriyenko | Getty Images

Like it or not, cognitive biases have the power to negatively impact your role as an entrepreneur. These baked-in tendencies of the human brain are almost like bugs in our software. If properly managed and controlled, they pose almost no risk, but if left unchecked, they could fundamentally change how we see the world — and how we make decisions for our businesses.

So how exactly are we supposed to gain control over our own cognitive biases?

How do cognitive biases work?

Let's start with an explanation of how cognitive biases work. A cognitive bias itself is any kind of system or tendency in the human mind that leads to a deviation from rationality. It could be your brain distorting perceptions, leading you to false conclusions about your surroundings. Or it could be your brain processing data in an irrational or inconsistent way, resulting in flawed or skewed decision making.

In any case, a cognitive bias has the power to undermine facts and objective perceptions. As an entrepreneur, this can be devastating; it can lead you to believe falsehoods about the nature of your business or lead you to make irrational decisions in your business environment.

Related: 3 Signs Your Relationships Lack Reciprocity

These are natural features of the human brain, often the vestigial leftovers of some evolutionary benefit. Accordingly, they can't be easily rooted out. However, there are several strategies that can help you identify and compensate for the cognitive biases most likely to affect your way of thinking.

Let's take a look at them.

Understand the most common biases

First, work to understand some of the most common cognitive biases that are likely to affect you as an entrepreneur:

  • Confirmation bias. Confirmation bias makes us disproportionately value information that supports our current assumptions and disproportionately downplay information that contradicts them. In other words, you're more likely to seek out and emphasize bits of information that support your existing beliefs. This is partially why it's so hard to change someone's mind on anything.

  • Status quo bias. We have a tendency to keep things as they are, fearing new things and underestimating the potential value in shaking things up.

  • The anchoring effect. We tend to get fixated on numbers. Seeing a high number, in any context, can make us overvalue and overestimate things for hours to come.

  • The ambiguity effect. We're much more likely to choose options with known probabilities than those with unknown probabilities (even if the odds of the known probabilities are unfavorable).

  • The bandwagon effect. Unsurprisingly, we tend to favor positions and decisions we feel are supported by the majority.

Merely being aware that these biases exist won't make them disappear. However, you might be able to proactively recognize when your thinking is distorted by one or more of these biases. Thereafter, you can fight against them.

Rely on concrete measurements

Any successful entrepreneur will tell you how important it is to rely on concrete, objective measurements. This is even more important in the face of our cognitive biases. If you have a subjective feeling that a product "should" be a specific price, do your research and see if you can find examples of products being sold at that price. Numbers won't lie to you, and they make it much harder to invent a counterargument.

Step outside your situation

We often get stuck with cognitive biases because we're stuck in our own situation. If you're negotiating a deal with a tough client, you may feel vindictive toward them, or you may evaluate their offer based on your current emotional state or past experiences. To step out of this rut, pretend you're looking in as an outsider. If your friend were in a similar position, how would you advise them to proceed?

Ask others for their insights

It's not a great idea for entrepreneurs to constantly rely on others for validation or for new ideas. However, there's enormous value in considering the insights and opinions of others — especially when challenging your own cognitive biases. If you feel a certain way, present the facts and data to someone you trust and ask them what they make of it (without volunteering your existing conclusion). If they feel the same, you can have higher confidence that you're thinking rationally.

Prove yourself wrong

Though counterintuitive, if you're not sure about your conclusion, you should try to prove yourself wrong. It's not hard to find evidence in favor of your current position if you look hard enough. But can you find evidence to contradict it? In many cases, this reframed approach can help you discover new facts or new details that change your perspective.

Related: How to Improve Your Critical Thinking Skills and Make Better Business Decisions

Cognitive biases are unavoidable. They're something we all have to deal with. But with these strategies, you can minimize your susceptibility to them, and ultimately make more rational, objective decisions as an entrepreneur.

Timothy Carter

Chief Revenue Officer of

Timothy Carter is the CRO of the Seattle digital marketing agency He has spent more than 20 years in the world of SEO & digital marketing leading, building & scaling sales operations, helping companies increase revenue efficiency and driving growth from websites and sales teams.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


ChatGPT is Becoming More Human-Like. Here's How The Tool is Getting Smarter at Replicating Your Voice, Brand and Personality.

AI can be instrumental in building your brand and boosting awareness, but the right approach is critical. A custom GPT delivers tailored collateral based on your ethos, personality and unique positioning factors.

Business News

Is the AI Industry Consolidating? Hugging Face CEO Says More AI Entrepreneurs Are Looking to Be Acquired

Clément Delangue, the CEO of Hugging Face, a $4.5 billion startup, says he gets at least 10 acquisition requests a week and it's "increased quite a lot."

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Business News

You Can Now Apply to Renew Your U.S. Passport Online — But There's a Catch

The U.S. State Department officially launched the beta program this week.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Apple Reportedly Isn't Paying OpenAI to Use ChatGPT in iPhones

The next big iPhone update brings ChatGPT directly to Apple devices.