Intelligence is insufficient

I often think about the traits that are critical for entrepreneurial success. On intelligence, I believe it is helpful but insufficient.

I liken entrepreneurs most to scientists. Scientists cannot "think" their way to a discovery. Discoveries are a product of testing your theories against reality. Testing provides new information that (using your intelligence) helps refine your theories until you eventually reach a discovery. How long they take to refine is in part a function of their initial sophistication and the effectiveness of the testing process ("intelligence") but even poor initial theories with a poor but resilient process of testing can lead to the same discovery. Ultimately, it is the quality of the new information gained that determines your success.

An entrepreneur is no different. An entrepreneur's priors of the market are woefully insufficient. No matter your intelligence, your first product ("initial theory") is unlikely to capture all the contours and nuances of the market ("the unknowns"). Unknowns vastly outnumber knowns. Some of these unknowns can only be learned by launching a product and seeing how the market reacts -- reality can often be surprising and difficult to reason from first principles. With every launch, you gain new information that combined with your intelligence leads to an improved product until you eventually reach product market fit. The better the information gained, the higher the likelihood of success. In fact, I would argue that as the quality of information gained increases, the necessity for intelligence decreases -- at an extreme, a new piece of highly actionable knowledge that explicitly shows "if you do x action, you will make y return" doesn't need additional intelligence to generate value.

Intelligence, then, is clearly helpful: a better initial product, a better process for testing, and a better ability to identify insights and patterns from your tests. However, it is clearly insufficient because its utility is constrained by your understanding of the market -- something best (and often only) gained through information producing action.