What do you think causes the demand curve? Mechanically, it’s pretty easy to describe the laws of demand. The way pretty lines shift to the right or the left from shocks. It’s possible to deduce the real, rough, shape of the demand curve for a product (It just takes a lot of courage!). We can import all the knowledge about demand, segmentation and price discrimination. We can describe a demand curve just fine. Why does it exist? What causes it to exist? If intelligence didn’t exist, demand wouldn’t exist. It’s fun to think of a machine generating it’s own preferences, independent any human input. Most of human trainers of such machines seem to keep them on a short leash. Monkeys,[…]

It seems like a lot of people value certainty. People buy a lot of products and stories for certainty. Insurance. Investment advice. Forecasts. Indulgences.Many entrepreneurs, in particular those in data science, sell certainty. What else is an F1 score other than a measure of certainty on some level? Given some inputs, our machine transforms them some way, which produces some statement about the past, present, or future, with some quantifiable amount of certainty, so that you can do something with confidence (or feel more secure). We sell certainty. And yet isn’t it curious about how much insecurity we’re creating while we do so? It has always been easier to sample data from the past, pull a heuristic from it, and[…]

This is post is the fifth in a five part series on Capital, and You. Previously, I defined capital as potential power, and argued that the primary optimization objective of the venture capitalist is to acquire more capital. Further, the board is the embodiment of the Corporation, it is made up of people who represent the Venture Capitalist, the Founder(s), other shareholders, and by proxy, Capital, and it is obligated to behave in a manner that increases capital accumulation. If the Board and the Founder are aligned in the pursuit of increasing capital, great capital may be accumulated. If they are not, doom. This fifth and final post expands on the relationship between Capital and the Citizen. Should citizens of[…]

This is post is the fourth in a five part series on Capital, and You. Previously, I defined capital as potential power, and argued that the primary optimization objective of the venture capitalist is to acquire more capital. Further, the board is the embodiment of the Corporation, it is made up of people who represent the Venture Capitalist, the Founder(s), other shareholders, and by proxy, Capital, and it is obligated to behave in a manner that increases capital accumulation. This fourth post expands on the relationship between the Board and the Founder. Noam Wasserman, in his book, The Founder’s Dilemmas, makes the case that a Founder has one of two optimization objectives: to be a king or to be rich.[…]

This is post is the third in a five part series on Capital, and You. Previously, I defined capital as potential power, and argued that the primary optimization objective of the venture capitalist is to acquire more capital. This third post explains the relationship between the Board and the Venture Capitalist. The Board is the embodiment of the corporation. Put a bit more strongly, the board is the corporation. It’s the Board that discharges the power of capital. It exercises oversight. It is the body that all the employees are accountable to. It can fire anybody it wants –  including the CEO. It can hire anybody it wants, including the CEO. They approve or disallow compensation plans. They approve or[…]

This is post is the second in a five part series on Capital, and You. Previously, I defined capital as potential power. This second post attempts to explains the relationship between Capital and the Venture Capitalist. Capital and The Venture Capitalist The Venture Capitalist has one primary optimization objective and a handful of secondary, often self-imposed, constraints. The primary optimization objective of the Venture Capitalist to accumulate more capital. They may self-impose a constraint, like only accumulating capital in the financial services sector, or only by working with women entrepreneurs or by some other criteria. But their primary objective is accumulate more capital. Venture Capitalists engage in a set of activities in the quest to accumulate more capital. If a[…]

This is post is the first in a five part series on Capital, and You.It’s written for people who turn data into product and who may have some questions about why they’re seeing what they’re seeing and why they’re feeling what they’re feeling at a startup. The first post explains what is Capital. The second post attempts to explains the relationship between Capital and the Venture Capitalist. The third post explains the relationship between the Board and the Venture Capitalist. The fourth post expands the relationship between the Board and the Founder. And fifth post expands on the relationship between Capital and the Citizen. Capital And You: What Is Capital Capital is potential power. In order for capital to make[…]

Previously, I asked what kind of leader you wanted to be. In it, I struggled with the question of the tradeoffs of misrepresenting ground truth. Suppose you work at the WWE and you need to make a business decision. Somebody literally believes that it’s all real. You need to make a business decision about a contract renewal. What kind of harm are you doing to them, and to yourself, in going along with their belief, something that you know yourself not to be true? Absurd? Yes. Beliefs are absurd things. Later that month, I was asked why I was so sure that WWE wasn’t real? Why was my version of ground truth any more legitimate than somebody else’s ground truth?[…]

What causes conversion? Demand. It’s a simple answer and worthy of unpacking.  You could thank Claude C. Hopkins for the simple answer. Hopkins wrote two books towards the end of his life – Scientific Advertising and My Life In Advertising. He seemed to regret his experiences as an agency president, and left some direct advice on how master marketers should think of their choices. In his last decade of life, Hopkins marketed his marketing expertise. Instead of continuing to take on all the risk of marketing product on behalf of somebody else (and maybe getting paid if the product sold), he set up a system where products would be pitched to him. If the product was good, he’d take a[…]

What a fantastic read from Camuffo, Cordova and Gambardella! If you haven’t read A Scientific Approach to Entrepreneurial Experimentation, you’re missing out. It’s a great read. And not only because it reinforces my own preexisting biases, but also because there are challenging bits in there. The core finding is “We find that entrepreneurs that behave like scientists perform better, pivot to a greater extent to a new idea, and do not dropout less than the control group in the early stages of the startup.” The authors focus on a key behaviour that scientists exhibit. A scientist has two types of skepticism – skepticism that something is true, and skepticism that something is not true. Those represent two types of error, helpfully[…]