The conformity baseline

Solomon Asch’s conformity research established the foundational finding against which all subsequent social influence research should be read. In conditions where the social pressure was explicit, obvious, and in direct conflict with clear perceptual evidence, a substantial proportion of participants conformed to the group’s incorrect judgment at least once. The finding that is most relevant to the founder context is not the conformity rate itself but the mechanism: participants who conformed did not experience themselves as conforming. They reported genuine uncertainty about their own judgment, experienced the social information as genuinely informative, and in many cases appeared to update their actual perception rather than merely their reported judgment. The social influence was not experienced as pressure from outside; it was experienced as evidence.

The subtle social influence mechanisms that operate in commercial decision contexts are considerably less visible than the explicit pressure of the Asch paradigm. The investor’s expressed enthusiasm for a particular approach, the peer community’s consensus about what is working, the competitor’s product decisions that implicitly define the category’s norms; these are social information inputs whose influence on the founder’s commercial conclusions is substantially larger than the founder’s retrospective account of their reasoning will acknowledge.

The herding mechanism

Jan Lorenz and colleagues’ herding research documented the specific mechanism through which social information enters individual judgment below deliberate awareness. Participants asked to make numerical estimates adjusted their assessments toward the group average after exposure to others’ estimates, even when they were explicitly instructed to maintain independent judgment and believed they were doing so. The herding effect was not a simple capitulation to social pressure; it operated through the genuine updating of the participant’s confidence in their own estimate, producing the experience of independent reassessment rather than social conformity.

The cascade implication of the herding mechanism is the commercially significant finding. Early social information determines subsequent judgments through sequential herding, producing rapid consensus formation that makes genuinely independent analysis appear to confirm whatever the social environment already believes. In the startup ecosystem, the investor who funds a company in a particular category provides social information that makes subsequent investors more confident in the category, which produces more funding, which produces more social proof, which produces more confidence; the entire cascade can be driven by an early social signal rather than by the underlying commercial opportunity. The founder whose decision to build in a particular category was substantially shaped by the ecosystem’s excitement about that category has a high probability of attributing that decision to their own market analysis.

Social proof in the founder context

Robert Cialdini’s social proof research predicts the specific social influence channels most active in the commercial decision contexts the founding process generates. Social proof operates most powerfully when the situation is uncertain, when the observer is similar to the source of the social information, and when the social information is available before the individual has formed an independent judgment. The founding context reliably provides all three conditions: commercial uncertainty is structural, the peer community consists of people who are highly similar in their entrepreneurial identity and experience, and the ecosystem narrative circulates continuously before the founder has formed an independent assessment of most commercial questions.

The pricing model that the category’s established players use is social proof that the model works. The fundraising structure that the most visible recent rounds have used is social proof that the structure is appropriate. The product features that the most successful comparable companies have built are social proof that those features are what the market wants. Each of these is social information whose influence on the founder’s commercial decisions operates through the same mechanism as the Asch paradigm, and whose influence is equally likely to be retrospectively attributed to independent analysis.

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The attribution mechanism

Dale Miller and Michael Ross’s self-serving attribution research predicts the specific reason that social influence is so consistently underestimated by the people it is operating on. The attribution of one’s own decisions to rational analysis rather than social influence serves the self-concept of the independent thinker that the entrepreneur identity specifically requires. The social influence that shaped the commercial decision is not experienced as social influence; it is experienced as evidence, which is then attributed to the analysis that the founder believes was their primary decision mechanism. The self-serving attribution is not a deliberate misrepresentation; it is the genuinely experienced account of a process in which the social influence was invisible.

The implication is that the founders who most confidently describe their commercial decisions as the product of independent market analysis are not necessarily the ones whose decisions were most independent of social influence. They may be the ones for whom the social influence was most successfully invisible and the attribution to independent analysis most fluent.

The social comparison and peer benchmarking

Leon Festinger’s social comparison research predicts the specific mechanism of peer influence on founder decisions in the absence of explicit social pressure. In the absence of objective standards for evaluating commercial decisions, people use social comparison with similar others as their primary calibration mechanism. The commercial decisions of comparable companies function as social comparison benchmarks that shape what the founder perceives as appropriate, ambitious, and legitimate, not through explicit social pressure but through the fundamental social comparison process that Festinger documented as the primary mechanism of self-evaluation in uncertain domains.

The benchmarking that founders describe as competitive intelligence is, in this account, partly a social comparison process through which the peer community’s decisions define the normal range. The pricing model that is not dramatically different from the peer group’s is not merely a rational response to market information; it is also a social comparison outcome that the Festinger mechanism would predict regardless of whether the market information warranted it.

The ecosystem narrative

The most powerful and least acknowledged social influence on founder decisions is the dominant narrative circulating in the relevant investment and startup ecosystem at any given moment. The story about what kinds of businesses are fundable, what kinds of problems customers are willing to pay for, what kinds of founders succeed, and what stage of development warrants what scale of ambition, is the most pervasive available social proof signal. It shapes the mental models within which option generation occurs, the reference points against which commercial progress is evaluated, and the conclusions that feel obvious when the analysis is complete.

The founder who builds the company that the ecosystem narrative currently describes as the right kind of company to build has not necessarily made an independent commercial judgment. They have been influenced by the most powerful social information available in their decision environment, in a way that the social psychology research predicts will be experienced as independent analysis and attributed accordingly.

What the research supports

The social psychology literature does not suggest that social information is without value or that social influence should be eliminated from commercial decision-making. The Lorenz research documents that herding toward accurate social information improves individual judgment; the problem is that the herding mechanism does not reliably distinguish accurate from inaccurate social information. What the research supports is the deliberate examination of the social inputs that are active before an apparently independent commercial conclusion is reached: identifying which peer decisions are functioning as benchmarks, which ecosystem narratives are shaping the option generation, and which investor signals are providing the social proof that the analysis appears to confirm independently.

If the experiences described in this article are significantly affecting your wellbeing, speaking with a psychologist is the right next step. UK: Samaritans (116 123, free, 24/7). Mind (0300 123 3393). BACP: bacp.co.uk/search/Therapists. Crisis Text Line — text HOME to 741741 (US, UK, Canada, Ireland). International: internationaltherapistdirectory.com.

This article is for educational and informational purposes only. Sources: Asch, S.E. (1951). Effects of group pressure upon the modification and distortion of judgments. In H. Guetzkow (Ed.), Groups, Leadership and Men (pp. 177-190). Carnegie Press. Lorenz, J. et al. (2011). How social influence can undermine the wisdom of crowds. Proceedings of the National Academy of Sciences, 108(22), 9020-9025. Cialdini, R.B. (1984). Influence: The Psychology of Persuasion. Morrow. Miller, D.T. and Ross, M. (1975). Self-serving biases in the attribution of causality. Psychological Bulletin, 82(2), 213-225. Festinger, L. (1954). A theory of social comparison processes. Human Relations, 7(2), 117-140. Lieberman, M.D. (2013). Social: Why Our Brains Are Wired to Connect. Crown. Wilson, T.D. (2002). Strangers to Ourselves. Harvard University Press.