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. […]
entrepreneurism
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 […]
A Taxonomy of Moats
Value is created through innovation, but how much of that value accrues to the innovator depends partly on how quickly their competitors imitate the innovation. Innovators must deter competition to get some of the value they created. These ways of deterring competition are called, in various contexts, barriers to entry, sustainable competitive advantages, or, colloquially, moats. […]
iTunes Case: Technological Innovation
Ralph Waldo Emerson reportedly once said “If a man can…make a better mouse trap than his neighbors, though he builds his house in the woods, the world will make a beaten path to his door.”1 Every engineer fervently wishes this were true. It is not. The success of any interesting product is not just a function of […]
The Immediate Future for Adtech Startups
I spoke at the AppNexus Summit a couple of weeks ago. Brian O’Kelley read my post on adtech investing trends and asked if I could expand during the session. The video is online (my part at 1:48), but I thought I’d write it up also. I figured in the AppNexus audience of 600 that there […]
The aim of marketing is to make selling superfluous
I was preparing to teach my entrepreneurship class about marketing last week and ran across an old blog post of Fred Wilson’s*. A very experienced and successful entrepreneur came into our office a week ago to pitch his latest company. At the end of his pitch he showed us some numbers. Normally for a raw […]
How to kiss your elbow
Even before Paul Graham’s Growth post the recent VC meme was that entrepreneurs just aren’t as ambitious as they used to be. They are too careful, husbanding their cash rather than boldly investing it in growth. I’ve heard this kvetch four or five times since Labor Day, each time from a smart and well-respected VC. […]
Great Riches and Low Theft
In early 1998 I walked the open plan floor of what was then one of the largest web development shops. The founder was giving me a tour so I could see the scores of web developers working diligently. They looked the part, the founder looked the part, the place had good energy. I liked it. […]
Response to comments: Training VCs
Many of the comments on yesterday’s post were about training future VCs, or not. Both Brad Feld and Fred Wilson said they did not have junior VCs because they did not want to burden entrepreneurs with inexperienced VCs. This makes a ton of sense. But, then, where should experienced VCs come from? Andy Weissman comments […]