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. […]
Uncertainty
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.
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 […]
Uncertain decision making and the maximax criterion
If you are competing against Nature, you might as well go big.
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.
Strategy under uncertainty
Every firm competing in an industry has a competitive strategy, either explicit or implicit… The emphasis being placed on strategic planning today…reflects the proposition that there are significant benefits to gain through an explicit process of formulating strategy, to insure that at least the policies (if not the actions) of functional departments are coordinated and […]
Startups and Uncertainty
I’m trying to write something longer than a blog post and to keep myself motivated I’m breaking it up into smaller pieces and publishing them here. So this should be read in conjunction with Schumpeter on Strategy and A Taxonomy of Moats. I expect that at some point the three will be combined together, I’ll […]
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. […]
Schumpeter on Strategy
It’s Friday and I’m procrastinating, so here you go. Let’s talk about Joseph Schumpeter. Good old John Joseph Jingleheimer Schumpeter, as he wasn’t called. Schumpeter once wrote in his diary that he aspired to be the greatest economist, horseman, and lover in the world1. I can imagine the women and horses edging away nervously. Luckily […]