Discount rates in venture backed startups

For some ten years I have advised students in my entrepreneurship class to use a 40% discount rate in their lifetime value calculations. Every semester someone decides to take advice they found on the internet and use a much lower rate. It does seem like, of the advice given, mine is at the high end. […]

Founder vs Investor

The book I wrote with Liz Zalman has been released! We chose an unusual format: we take specific times and events in the life of a startup, times that can cause conflict between founders and investors, and we each give our views on them. We disagree. A lot. We’ve gotten a lot of feedback. Some […]

AI and the Structure of Reasoning

Generative AIs can do some things better than people: they can code faster in many instances, they can write junior high school level essays faster, they can create detailed images on demand no matter what the demand, and they can write a mediocre sonnet about whatever you want. But it’s still obvious that human intelligence […]

Spring 2023 Syllabus

I have always found value in other teachers’ syllabi. I was reminded of this when Henrik Berglund recently shared his excellent syllabus with me. In case anyone else feels the same, here is my current one. I last posted a syllabus four years ago. Much changed during the pandemic. Most notably—at the instigation of Noelle, […]

Trial and Error, Part 1

Uncertainty results in unpredictability, and two types of things cause unpredictability: novelty and complexity. Novelty uncertainty is when you can’t predict something because it has never been done before. You might not know know the existing conditions, all the actions you can take, how those actions might change conditions, and/or what the possible outcomes are. […]

Addressing Uncertainty, an overview

We are going to talk about building a strategy that helps you make decisions, even under uncertainty. It will help you decide which actions to take even though you won’t know what the results of those actions are. You won’t have a plan—something where action a leads to action b leads to action c, and so on until you inevitably (or at least statistically) reach success. Instead you will have a framework that guides you to decisions that carefully mitigate uncertainty as efficiently as possible while building a sustainable competitive advantage for the time when the uncertainty is gone and competition arrives.

Your Board of Directors is Probably Going to Fire You

Edit, 11/20/2023: If you like this post, it inspired a book co-written by me and Liz Zalman. You can find it here. One of my portfolio companies raised a round a few months ago and I left their board. So, for the first time in a long time, I am not on any boards of […]

Embracing Uncertainty in Entrepreneurship Pedagogy

Bill Janeway recently said of something I wrote that my focus on uncertainty “seems rather untethered.” Janeway is one of the few people writing about venture capital who have been in the business longer than I have, so this made me sit back and think for a bit. I’ve spent a while now writing primarily […]

Productive Uncertainty

If the point of a startup is to create excess value then the startup needs an innovation that can be defended over time. This means the team must have a strategy to defend their position once they have mitigated uncertainty.