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This comparison is really broken: - Airlines and venture backed startups have vastly different goals. Flights are supposed to, above all things, be predictabl
by wheels 17y ago
This comparison is really broken:
- Airlines and venture backed startups have vastly different goals. Flights are supposed to, above all things, be predictable. Crashing is not acceptable. If startups were predictable, there would be no reason for venture capital to exist.
- This is talking about an average over the whole of an industry, venture capital, in which the average, and indeed most of the above average firms are dysfunctional -- they don't make money. Not just, you know, 51%, like > 90%. So being better than average can still mean that you're completely economically ineffective. So the right question isn't, "What makes you better than average?" but "What makes you one of the few that is even functional?"
- karzeem 17y agoThe whole VC pitch process is basically a test that VCs run to detect future success. Obviously, it's badly prone to false negatives and false positives. So I think the thesis of the article is that checklists help VCs reduce both those error rates. I don't think, however, that Gawande's necessarily saying that checklists improve a VC's winner detection algorithm; just that checklists help the VC make sure to run the algorithm thoroughly.
- redcap 17y agoI think the approach the article is making is that it pays to be methodical about deciding to invest in something, it's not about saying that startups will be predictable, but about reducing risk. Planes just happen to be a case where risk can be reduced to a pretty minimal level with a good enough checklist.
- blrgeek 17y agoQuote from the article "Those with other styles were not failures by any stretch – experience does count for something. But those who added checklists to experience proved substantially more successful." And Buffett might argue with you that investing (VC or otherwise) should try to be predictable too!
- wheels 17y agoIf investments in startups were predictable they would be loans. Venture capital exists because there is a gap for high-risk / high-return investments.