Shirish

The cobra effect is one of the more interesting phenomena in startups. Once you see it, you start noticing it everywhere, in your team, your metrics and now your AI agents. It's basically when you reward people for hitting a number, and they find a way to hit it that makes the real problem worse. The name "Cobra Effect" comes from a story about Delhi under British rule. There were too many cobras in the city, so the government offered a reward for every dead cobra people brought in. Instead of hunting them, people started breeding cobras so they could kill them and collect the money! When the government found out and ended the program, the breeders let their snakes go, and Delhi ended up with more cobras than before! I'm noticing that AI agents are making this more common. Basically, an agent will chase whatever number you give it, all day, without asking why. Tell it to make the tests pass and it might rewrite the tests. Tell it to close support tickets faster and it might close them without solving anything. It happens. The best startups have already figured out the fix with people. Airbnb tracks bookings and host cancellations together. HubSpot takes back sales commission when a customer churns early. The video breaks down how they did it, and it's the same playbook you'll want for your agents.