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    2.beating The Odds When You Launch A New Venture

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    Hithai Shree
    Beating the odds when starting a new venture involves tackling risks in the right sequence. Not all risks are equal - deal-killer, path-dependent, and high-ROI risks should be addressed early. Experiments should focus on resolving one risk at a time through short, simple tests so that lessons can be applied to redirect the venture efficiently. It is better to adjust a venture early based on experiment results than be forced to adjust later or allow experiments to continue if they are not providing useful insights. Managing risks strategically in this way can help entrepreneurs beat the odds of failure.

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    2.beating The Odds When You Launch A New Venture

    Uploaded by

    Hithai Shree
    271 views13 pages
    Beating the odds when starting a new venture involves tackling risks in the right sequence. Not all risks are equal - deal-killer, path-dependent, and high-ROI risks should be addressed early. Experiments should focus on resolving one risk at a time through short, simple tests so that lessons can be applied to redirect the venture efficiently. It is better to adjust a venture early based on experiment results than be forced to adjust later or allow experiments to continue if they are not providing useful insights. Managing risks strategically in this way can help entrepreneurs beat the odds of failure.

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    Digital entrepreneurship to know how to beat the odds when you launch a new venture

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    2.Beating the Odds when you launch a new venture

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    Beating the odds when starting a new venture involves tackling risks in the right sequence. Not all risks are equal - deal-killer, path-dependent, and high-ROI risks should be addressed early. Experiments should focus on resolving one risk at a time through short, simple tests so that lessons can be applied to redirect the venture efficiently. It is better to adjust a venture early based on experiment results than be forced to adjust later or allow experiments to continue if they are not providing useful insights. Managing risks strategically in this way can help entrepreneurs beat the odds of failure.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    271 views13 pages

    2.beating The Odds When You Launch A New Venture

    Uploaded by

    Hithai Shree
    Beating the odds when starting a new venture involves tackling risks in the right sequence. Not all risks are equal - deal-killer, path-dependent, and high-ROI risks should be addressed early. Experiments should focus on resolving one risk at a time through short, simple tests so that lessons can be applied to redirect the venture efficiently. It is better to adjust a venture early based on experiment results than be forced to adjust later or allow experiments to continue if they are not providing useful insights. Managing risks strategically in this way can help entrepreneurs beat the odds of failure.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 13

    BEATING THE ODDS

    WHEN YOU START A NEW


    VENTURE
    TACKLING THE RIGHT RISKS FIRST

    Risk and value are inversely proportional:


    When you remove risk, you increase value.
    But it matters in what sequence you tackle
    risks, because not all of them are created
    equal.
    RECOGNIZE THAT NOT ALL RISKS ARE CREATED
    EQUAL

    New ventures fairly bristle with risks.  


    The key question is “What’s the most important
    uncertainty?” and the answer should be targeted early.

     Deal-killer risks
     Path-dependent risks and easy-win
     High-ROI risks.
    RISKS THAT CAN BE RESOLVED WITHOUT
    SPENDING A LOT OF TIME AND MONEY.
    BE JUDICIOUS WITH CAPITAL
     Experiments should help redirect a venture, not confirm
    that your initial ideas were correct.
     The way venture capitalists invest in startups—by
    providing capital in multiple rounds as the value of the
    venture increases—is far more effective.
    MANAGE EXPERIMENTS EFFICIENTLY

     Identifying and prioritizing risks correctly and then


    conceiving and funding experiments to resolve them
    systematically will make the unpredictable process of
    launching a new venture as efficient.

     Several steps to make your experiments more effective.


    LIMIT THE DURATION.
    According to Meg Whitman, the former president and
    CEO of eBay, the company succeeded in its earliest days
    by recognizing that perfection is sometimes the enemy
    of the good.
     It’s often better to get something into the market
    quickly, learn from it, and move on to the next phase of
    development than to analyze an idea to death and try to
    perfect it before launch.
     Even deal-killer risks can sometimes be tested quickly
    and simply.
    TEST ONE THING AT A TIME.

    o Poorly designed experiments vary too many


    factors at once, increasing the expense and
    making it difficult to determine what causes
    what.
    o Experiments should be simple and focused on
    resolving uncertainties one by one.
    APPLY THE LESSONS LEARNED.

     Corrections come painfully, but it’s better to


    choose to adjust early than be forced to
    adjust later.
     They are meant to help redirect a venture,
    not to confirm that your initial ideas were
    correct.
    BE WILLING TO TURN OFF EXPERIMENTS.
     This idea is closely related to the previous point,
    but requires far more discipline.
     Some ventures are simply not going to work. A
    deal-killer risk may in fact kill the deal. The
    sooner you cut your losses in such cases, the
    sooner you can go on to the next venture.
    CONCLUSION
    •NEW VENTURE FORMATION will always be fraught
    with risks..
    •As Bob Reiss’s story has illustrated for decades—and our
    expérience continues to confirm - great entrepreneurs don’t
    take risks; they manage them.
    Making speedy adjustments often means the difference
    between failure and success.
    •As entrepreneurial managers should learn to bend the risk-
    reward curve in their favor and beat the odds

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