I'm often in the position where I see startups with plans that *don't make sense* to me, as business models or as research programs. Sometimes brilliant people with stellar career track records join these companies. Sometimes they get highly funded. I'm puzzled.
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From my perspective, as a founder of an early-stage startup, I'm starting on the ground floor. Zero credibility. How can I earn credibility? Pretty much *only* by generating results and by having a well-thought-out plan with good evidence it can succeed.
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In a biotech context, where actual revenue may be a decade away, and where even experimental data is expensive to collect (atoms, not bits!) pretty much *all* the credibility of my project resides in the plan. Capable people, too; but recruiting them reduces to the same problem.
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In fact, the people I *have* recruited and fundraised from so far, who are excellent, were sold on the basis of the plan: why it makes sense & seems likely that we'll discover anti-aging drugs through large phenotypic invertebrate drug screens.
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So, of course, one possibility is that I'm wrong when someone's plan doesn't make sense to me.
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I've definitely made mistakes of the form "that's not possible, the technology isn't good enough/cheap enough" based on outdated information, and it turns out things have rapidly progressed since I last checked on the field.
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But simple logic stuff like "a plan that depends on A, B, *and* C going right is riskier than a plan that depends on A, B, *or* C going right" or "experimental evidence is more credible than correlational evidence, ceterus paribus, in ascertaining whether an intervention works"
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Replying to @s_r_constantin
Unless someone’s specific knowledge leads them to ABC being the only working path. We don’t live in a general probability set.
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Replying to @speakthelogos @s_r_constantin
Even more importantly, business and funding plans are marketing documents. They rarely contain actual secret sauce for two reasons: 1) investors are quite dumb and don’t look at things that actually matter, and 2) lots of people will see that doc, gotta treat it as public facing.
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Replying to @speakthelogos @s_r_constantin
Most successful startups I’ve been involved with have an investor plan that contains whatever mindless platitudes investors want to see, and an actual internal plan that success hinges upon.
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This would explain why smart *founders* appear to have dumb plans: they're lying. (I honestly never thought of that!) Doesn't explain why smart investors would fund dumb-looking plans. (& you've already assumed investors are dumb, which I'm skeptical of.)
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Replying to @s_r_constantin
Dumb is flippant; they optimize around the wrong things.
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Replying to @speakthelogos @s_r_constantin
And the very tippity top investors *are* optimizing around the right things, and unsurprisingly they’re the only ones that return any capital (since 90%+ of VCs fail).
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