25iq

My views on the market, tech, and everything else

A Dozen Lessons about Business Valuation from the Iridium Debacle

  One of the best illustrations of the many ways a business valuation can go wrong is the pre-bankruptcy story of mobile satellite service Iridium. I knew Iridium  well since I did potential acquisition due diligence on Iridium several times and because people who worked for Craig McCaw had a long history with Motorola. We (Eagle River) always passed on buying Iridium no matter how low the price dropped. The […]

Continue Reading →

A Dozen Lessons about Business, Investing and Money from Lil Wayne (Weezy)

  1. “They can’t put no more Weezy baby out. That’s that cash money vasectomy.” From the song: Grateful. That there was a feud between Lil Wayne and Birdman and another feud with the record label which has distributed Weezy’s music is well known. The core of the issue is “wholesale transfer pricing” (WTP).  Simply put:  WTP is the bargaining power of A that exclusively supplies a unique product X to B […]

Continue Reading →

A Dozen Beliefs About Business, Money and Life that Kanye West Shares With Other Great Entrepreneurs and Investors

1.“For me, first of all, dopeness is what I like the most. Dopeness. People who want to make things as dope as possible, and, by default, make money from it.” As everyone who is dope knows, “dopeness” is an adjective used to describe the awesomeness of a person, place or a thing. In these sentences Kanye is in effect repeating the Y Combinator motto as stated by Jessica Livingston: “Make […]

Continue Reading →

Core Product Value and Entrepreneurial Success

  I have previously written about Minimum Viable Product (MVP) and Product/Market Fit (PMF). These are important processes based on the scientific method that can be used to test a value hypothesis. That hypothesis does not just appear via spontaneous generation. Andy Rachleff describes what should be included in a value hypothesis as: “the features you need to build, the audience that’s likely to care, and the business model required […]

Continue Reading →

A Dozen Ways “Virality” Can be Misused and Misunderstood

  1. “The most important thing that we did [at Facebook’s] was I teased out virality and said you cannot do it. Don’t talk about it. Don’t touch it. I don’t want you to give me any product plans that revolve around this idea of virality. I don’t want to hear it.”  Chamath Palihapitiya. I have the same concerns Chamath is talking about in writing more about virality than I […]

Continue Reading →

You have Discovered Product/Market Fit. What about a Moat?

I have previously written blog posts about (1) growth, (2) product/market fit and (3) minimum viable product. The most logical topic for the next post is: Why does a business need a moat? The answer is simple: even if a business discovers solutions to the value hypothesis and the growth hypotheses without a moat the probability of the business being financially successful over time is remote. Revenue alone is not […]

Continue Reading →

A Dozen Lessons about Minimum Viable Products

“It’s only cheap to build 2-3 person companies with sweat equity. The minute you start paying engineers you will realize it is quite expensive.” Bill Gurley.  Assume a startup has raised a seed round of ~$2 million. Also assume that what the startup has is a hypothesis that a big market composed of dogs will want to eat the dog food described by the hypothesis. The founders of the startup […]

Continue Reading →

Why has the level of business competition levels been turned up to 11? Or: Why is the lean customer development process important?

The world has been fundamentally changed by digital networks and software. Businesses and customers which are connected by networked digital systems create amplified network effects which means the velocity of business and the level of competition and innovation are higher than they ever been ever been. To survive in this new environment every business, from the largest enterprises to the smallest sole proprietor, must accelerate and fundamentally change their customer […]

Continue Reading →

A Dozen Lessons About Product/Market Fit

The product/market fit (PMF) concept was developed and named by Andy Rachleff (who is currently the CEO and co-founder of Wealthfront, and is a co-founder of Benchmark Capital). The core of Rachleff’s idea for PMF was based on his analysis of the investing style of the pioneering venture capitalist and Sequoia founder Don Valentine.” Why market matters more than anything  “Give me a giant market — always.” “Arthur Rock is […]

Continue Reading →

A Dozen Lessons on Growth

A growth team has the “responsibility to measure, understand and improve the flow of users in and out of the product and business. That’s the role of growth.” “A finance team by definition measures, understands and improves the flow of capital in and out of a business. That’s important because it contributes to all sorts of incredibly important business decisions. Finance uses its knowledge to help the business operate. What’s […]

Continue Reading →