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Oh, it's decent advice for right now. Of course, you probably need that decent advice because you listened to your VCs' previous decent advice in better econom
by gyardley 11y ago
Oh, it's decent advice for right now.
Of course, you probably need that decent advice because you listened to your VCs' previous decent advice in better economic conditions - "don't worry about profit, just grow grow grow as fast as you can."
The cynical side of me thinks that it's this flip-flopping between two extremes that ends up disproportionately benefitting investors, and that entrepreneurs would be better served by always assuming economic conditions will change and preparing accordingly.
- nostrademons 11y agoNah, I figure that venture investors operate under conditions of extreme uncertainty, which means that they make decisions almost purely on emotion. That's what our emotional circuits are made for, after all: subconsciously aggregating a lot of signals so we can make decisions when there's not enough information to process it rationally. And yes, entrepreneurs are almost always better off ignoring everything an investor says and using their own data (which ought to be better than that of an investor's, otherwise why the hell are you founding a company?) to come to a conclusion. The "Mr. Market" allegory was published in 1949, but it's never been more apropos. Pretty much all venture capital operates on this principle; use it to your advantage: https://en.wikipedia.org/wiki/Mr._Market https://en.wikipedia.org/wiki/Mr._Market
- aorloff 11y agoKahneman and Tversky, Prospect Theory. Applies to investors, VCs, and ordinary people at the grocery store.
- aorloff 11y agoHoly shit I was about to write a comment to say - YES!!! absolutely. And then its you. Well, you are still right, and its still what I was thinking.