4 ms·
> The reason they attempted this one is because they thought they already had good enough models to avoid taking large losses. Risk aversion and launching a ne
by indymike 5y ago
> The reason they attempted this one is because they thought they already had good enough models to avoid taking large losses.
Risk aversion and launching a new business strategy do not work well together.
- djbusby 5y agoWait. There is a lot of messaging telling entrepreneurs to try to de-risk their new ventures. The common pattern I observe is having a new ideas and de-risking it into a successful business.
- indymike 5y ago> The common pattern I observe is having a new ideas and de-risking it into a successful business. That is a common pattern, but when you see a company launch a new venture and the primary goal is to not lose money, often, the desire not to lose money leads to decisions that prevent actually making money.
- seoaeu 5y agoYou could use that argument to justify spending more money on any unprofitable venture. If you discover that some market segment is higher risk or lower profit than you expected, that is a good reason to consider course correcting. Around 2008, some investment banks famously had a single division manage to lose significantly more money than the entire rest of the company made over the same time period. Zillow not wanting to replicate their mistake isn't necessarily a bad decision.