How many times have you heard a story about a humble company that succeeds but on some level seems "unintelligent", not "with the times", backwards, not technologically advanced, etc.?

Odds are they serve an uninteresting, underserved market that has more cash than common sense.  They aren't focused on technology innovation as much as meeting customer needs, which are often far simpler than in mature tech markets.  They probably don't do a lot of PR.  They don't hang out at a lot of local networking functions.  They just humbly plug away and cash flow — all under the radar of the local community.

Well, so-called "dumb" companies like this may just get the last laugh.

One of the dangerous things about hanging out with the tech-savvy community is that it's arguably where the smartest people are.  Just about everyone in this community is actively engaged in "creative disruption", trying to make a profit by redefining a business and in so doing, turning an existing dollar into a dime.

Certainly, a lot of businesses are being redefined today — and odds are that it's a good thing long-term.  And I am not an opponent of creative disruption, don't get me wrong.

But amidst all the creative disruption are markets/industries/customers that are underrated for both their ability to pay for tech-based solutions to problems and their relative price inelasticity.  Even in late 2009, there are a lot of businesses in tech where price doesn't matter nearly as much as effectiveness.  Tech is a business enabler, and for that people will pay often times far more than you think.

The ability of entrepreneurs to do more with less is a great trait that sets us apart from everyone else.  But all too often, I find that the trait comes with an inherent bias that everyone else is as price-sensitive as we are.  It's often the WRONG thing to think, and it can result in leaving a lot of money on the table.  I've seen it happen more often than not — entrepreneurs are "serial underpricers".  We assume that price is a big determining factor in whether or not a product/solution is chosen, often without truly empathizing with the customer to understand the correct answer to the question:

"What means more to the customer?  $XXX or the time necessary to become an expert to optimize for lowest cost?"

We don't think through this question because we've all found the free tool that does what we need to rip music off YouTube and put it on our iPhone… we've all found the right free tool for managing our Twitter accounts… and we run our entire back office with $100/month and a favor or two from a friend.  Yet we know that the world does not quite work this way.  We all know companies who blow money for reasons that seem unnecessary to us.  We just assume that everyone operates as we do, and often it ISN'T the case.

So, ask yourself if your biases lead you to overvalue creative disruption.  Are you inordinately drawn to companies that are based on great ideas, but lack a clear and viable business model?  Alternatively, are you too dismissive of businesses like these that may portend the future, but have no apparent way to cash flow?

We could all use balance in this business.  Without it, we're missing business opportunity.  Our biases drive us to immediately judge some ideas as brilliant, others "wishful".  It colors how we view fellow entrepreneurs and those we choose or don't choose to help/recommend to others.  Worst of all, it can create a giant blind spot in our thinking that makes us all — entrepreneurs and investors alike — less effective.