Imagine a new entrepreneur that has decided to start up a tech business. They have basic coding knowledge and have read a few business books. However, because they don’t yet understand the complexities of running a business, they believe:
🚀 “I don’t need experienced developers; I can build this myself!”
💡 “Marketing is easy—I’ll just post on social media and go viral!”
📉 “I don’t need financial planning; profits will come naturally.”
Yes we may have to fake it until we make it, but at this stage, they are overconfident despite lacking experience, and this is called the Dunning-Kruger Effect, so called because it was first studied by David Dunning and Justin Kruger in 1999 at Cornell University. It is generally recognised as a cognitive bias where people with low ability or knowledge in a particular area overestimate their competence, while those with high ability tend to underestimate their expertise.
Essentially low-competence individuals lack the skill to recognize their own shortcomings, leading to inflated self-confidence, whereas highly skilled individuals assume that tasks that are easy for them must be easy for others, leading to self-doubt or underestimation of their abilities.
The Dunning-Kruger Curve (Confidence vs. Competence) demonstrates the following:
- Peak of “Mount Stupid” – Beginners who know very little but feel extremely confident.
- Valley of Despair – When people realize how complex a subject is and lose confidence.
- Slope of Enlightenment – With experience, confidence grows steadily, but realistically.
- Plateau of Mastery – Experts understand both their knowledge and its limitations.
Smart leaders recognize their limitations, seek guidance, and never stop learning. Those stuck in the Dunning-Kruger trap often refuse advice and fail to grow. It can be incredibly frustrating to work alongside someone who cannot even discuss how they might improve things let alone admit that they need to change things.
Have you ever met anyone like this?
Photo by Lucas Santos
