Thinks 438

Vinod Khosla in The Information: “Venture investing is a “buy and hold for many years” game, not a “buy low, sell high” transaction game. To me, a startup is not a “deal.” It is some entrepreneur’s dream, and if we can assist them in building that into a large dream, then we will have large returns. It is much more company building and value building and long-term asset building, not short-term Ebitda optimization. Good entrepreneurs focus on managing risk with an eye to the long term. How ambitious should they be? How much present-day upside should they give up to ensure their companies’ future? Rarely will they be able to simply execute a plan—instead we see zigs and zags and pivots. That is why the team you hire is the company you build. Think of the original Square $10 hardware dongle compared to Square (or rather, Block) today, or Stripe’s initial model of partnering with payments companies to now being the de facto payments company. Good venture investors will have high tolerance for this ambiguity and guide their founders through it.”

Danny Meyer on the difference between service and hospitality: “Successful service requires technical delivery of a product. Hospitality is the degree to which a served individual believes you are emotionally on their side.”’ [via WSJ]

Armen Alchian and William Allen: “The profits of producers are not transfers of wealth from consumers, and the losses of producers are not transfers from producers to consumers. The profits are the economy-wide increases in wealth as a result of more valuable uses of resources. Profits are the unpredictable, but now discovered, increases in values of the responsible resources. The former lower values underestimated the future use values. No one knew earlier what the value of the resources would prove to be, else their market value would already have been that high.” [via CafeHayek]

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.