I guess (in the course of my two most recent blogs) I have made my basic stance clear that standard portfolio theory fails as far as start-up portfolios are concerned. Let us, just for the sake of the argument đ, assume Markowitz’s paradigm could somehow be applied, or rather, transferred onto the start-up stage. What would it look like? I … Read More
Risk Mitigation in the Venture Trade (Part 2)
Last week I expanded on the conventional venture capital wisdom related to the avoidance of too many bad lots (investment targets) in the bucket. The standard recipe to avoid these odds (apart from engaging in thorough due diligences) is to invest in a sufficient number of start-ups. Conventional VC wisdom has it that one needs to invest in at least … Read More
Risk Mitigation in the Venture Trade (Part 1)
Like in conventional asset management theory, the credo for the need of a “distribution of risk” or ârisk diversificationâ is generally also considered to be inviolable in the venture business. In my opinion, the imperative is fairly nonsensical â at least when it is based on the number or the type of targets to be chosen. Within the asset class … Read More
Wrong Tests and Ill Fitting KPIs Should not be Held Against A/B Testing
This time @AndrewChen âs Newsletter was somewhat weird. Under the heading âConservation of Intent: The hidden reason why A/B tests arenât as effective as they look, Andrew argues that measures which result from A/B testing and aim at improving conversion rates do not take into account that normal users among those who churn are statistically dominated by âlow intentâ minnows, … Read More
Merkel on German IIoT – Why Germany is on a Dangerous Path
I think Germany is lucky to have a physicist with some respectable track record as head of government. She is intrinsically motivated to push the countryâs sadly lagging digital transformation and she does not like empty blab. Despite that she needs to tread very carefully. One âwrongâ word might result in disastrous political or industrial effects. In last Fridayâs first … Read More
On Quality and Quantity in Start-up Processes
The issue how to quantify quality is an old one. In antediluvian times it used to be a common place that you cannot e.g. map quality on straight lines, because quality is a multi-dimensional category whereas quantity is one-dimensional. In business such philosophical qualms are generally perceived as academic and irrelevant: In HR and marketing for instance, where the âqualityâ … Read More
âSharing is Caringâ? Why Rifkin is Wrong
In his much-acclaimed book The Zero Marginal Cost Society, The Internet of Things, the Collaborative Commons and the Eclipse of Capitalism, palgrave mcmillan 2014, Jeremy Rifkin declares the internet economy and its key ambassadors the millennials to have dethroned capitalism for the sake of the new âWorld Wide Webâ – inspired economic model. According to Rifkin, âopennessâ, âuniversal access for … Read More
Smart Tech VCs do not Invest in Brands
There are times when you really wonder⌠Four days ago, I read an article on hackernoon.com on âThe Value of a Brand for Tech Companiesâ by Cameron McLain, principal at Hummingbird Ventures. The gist of this article is that tech start-ups and VCs alike should embrace the idea, that brands constitute an important value for tech start-ups worth of being … Read More
Tech-Revolution IIoT?
Being a historian of science by education, it amazes me to find most of my contemporaries in the venture business so at ease with detecting with an abundance of certainty ânext big thingsâ. How they manage to identify âtech revolutionsâ within their immediate vicinity or forecast the lives of the generation to come remains a mystery to me. I wish … Read More
ICO Instead of Series A?
Emitting publicly listed shares instead of diluting ownership by a series A financing round sounds like a very tempting way for founders to get going at early stages: Instead of having to âproveâ their companyâs worth to notoriously skeptical VCs and angels, they would simply have to pimp their equity story and promise things that need not come to fruition. … Read More