Thus the statement 'If I am the king of England, the moon is made of blue cheese' is 'true' (assuming I am not the king of England), and so is the statement 'If I am the king of England, the moon is NOT made of blue cheese'. Thus, 'B' AND 'not B'.
This doesn't prove B and not B, it proves (~A OR B) AND (~A OR ~B), which is true since A is false (you are not the King of England).
Another way to frame this: correct for biases in your sensitivity to new information.
Enron was too insensitive to new information. It biased itself towards insensitivity by rewarding those who stuck to the party line.
Conversely, a founder who gives up after hearing a few 'no's from investors is likely too sensitive to new information. They're biased in the opposite direction: it's often easier to give up than to trudge on.
Eliezer's point is that most of us are too insensitive to new information because it's painful to admit that we were wrong. I can agree ...
If too much people pay attention to adverse selection, I'd argue that there's an opposite effect: advantageous selection.
Imagine a world where every venture capitalist only invests in 'hot' rounds. Like this post advocates, they become wary when they're easily able to trade their cash for a company's equity. In this world, the market is inefficient. Supposing you have the cash to keep your portfolio companies alive (e.g., you're SoftBank), you'd be much better off only investing in the companies that other investors don't want to touch. This is because eve... (read more)