Why Business Leaders Should Think Like A Venture Capitalist

The book, The Venture Mindset, is all about how to make smarter bets and achieve extraordinary growth. The authors, Ilya Strebulaev and Alex Dang, explain that if any company wants to win big in competitive times, they need to think differently. They need to think like a venture capitalist (VC).

“This book teaches you to spot new opportunities, nurture the right talent, foster a culture of innovation, and take calculated risks,” say Strebulaev and Dang.

In their book, the authors share nine distinct principles inspired by the unique way VC’s think:

Home Runs Matter, Strikeouts Don’t
Get Outside the Four Walls
Prepare Your Mind
Say No 100 Times
Bet on the Jockey
Agree to Disagree
Double Down or Quit
Make the Pie Bigger
Great Things Take Time

These nine principles drive VC’s unique behaviors that have flourished in an ecosystem of thousands of startups, some of which went on to disrupt or create entirely new industries, according to the authors.

They add that “some of the lessons offered by the Venture Mindset are easy to implement, with immediate results; others are less so. But each lesson offers a powerful opportunity to change how you think and act within your own organization.”

As you read the book, you will find a Mindset Check at the end of each chapter. Use these to answer questions about your organization and think about what you may need to do differently to achieve a Venture Mindset.

Some of the questions include:
Is your organization positioned for making many small bets with the understanding that many of those will fail?
How open are your culture and organization to unexpected ideas coming from outsiders?
Do you regularly interact directly with entrepreneurs, executives, and experts to deepen your insights on developments in your industry?
Are your meetings designed to promote debate and open to disagreements?

Some of my favorite takeaways from among the nine principles include:

Pick your battleground.
Don’t get too skeptical too early.
Reward boldness.
Look beyond short-term gains.
Ignore temporary swings.

The authors share these additional insights:

Question: Of the nine Venture Mindset principles, which one is typically the most challenging for a business leader and his/her organization to master, and why?

Dang & Strebulaev: We work a lot with large organizations, and the single principle that is hardest to integrate into strategic decision-making is the idea that home runs matter and strikeouts don't.

The risk of failure is often exaggerated, and established organizations easily ignore missed opportunities until the next Google or Amazon gets big enough to disrupt their business.

Too often, everything inside a large and established organization is designed against launching new, risky ventures, with senior executives avoiding them as minefields. This is what makes Silicon Valley tech companies so unique — they continue to invent, experiment, take risks, and serve as innovation factories. More importantly, every Fortune 500 company can do the same. However, this requires a mindset change.

Question: Are the nine principles to be learned sequentially?

Dang & Strebulaev: No, each principle itself significantly improves the ability of a decision-maker to find and fund innovative ideas. It's not all about luck; there is a method to the madness.

Everyone and every organization can improve by dialing up the risk-tolerance level but in a smart way. However, mastering all of the Venture Mindset principles is important.

Without a large funnel of ideas, the effort is futile. Without killing your darlings (or less successful ventures), the organization would spread itself too thin. Without long-term commitment, you may give up too early.

So, to truly benefit from the Venture Mindset, adopting all nine principles is important. However, a journey of a thousand miles begins with a single step. To rephrase one VCs. When is the best time to start? It was yesterday!

Question: How long does it take for a business leader and his/her organization to master the nine principles and fully transform their entity to one operating with the Venture Mindset?

Dang & Strebulaev: We've seen how leaders change their behavior right after learning about some of the principles. For example, the principle of getting outside of the four walls can be immediately implemented, allowing leaders to discover many new ideas right away. However, seeing the benefits of the prepared mind principle takes more time. We've noticed that both of us have also significantly changed our behaviors. We experiment more and test our ideas rather than debating endlessly about who is right.

Transforming an organization to become venture-minded takes time. It may take 2-3 years to make it a part of the DNA of the organization. The challenge? It's not just about the leaders; it's about the leadership team and key employees who often participate in our workshops and become a team of intrapreneurs, initiating the venture mindset movement.

Thank you to the book’s publisher for sending me an advance copy of the book.

Comments

How To Build A High Performing Sales Team

Based on Stephanie Friedman 's 20 years of sales experience, her new book, Built to Grow: A Handbook For High-Performance Sales Teams , is the perfect step-by-step, go-to-market field guide for startup founders. Friedman offers readers a structured and repeatable methodology for building a high-performing sales function from a company’s earliest days. The book is divided into three phases of startup growth— Experiment, Build, and Scale. Within each of the three phases, Friedman covers: Sales Playbook Hiring Revenue Management Customer Success Compensations Culture Internal Collaboration Some of my favorite takeaway tips from the book include: No matter how experienced your salespeople are, any high-performing sales organization should follow one simple but important rule: No call without an agenda. This helps reinforce the necessary discipline around call preparation and ensures your customers have the best possible experience when talking to your...

High-Performing Teams Are Made Of This

According to Ron Ricci and Carl Wiese, authors of the book, The Collaboration Imperative , high-performing teams have the following characteristics: People have solid and deep trust in each other and in the team's purpose--they feel free to express feelings and ideas. Everybody is working toward the same goals. Team members are clear on how to work together and how to accomplish tasks. Everyone understands both team and individual performance goals and knows what is expected. Team members actively diffuse tension and friction in a relaxed and informal atmosphere. The team engages in extensive discussion, and everyone gets a chance to contribute--even the introverts. Disagreement is viewed as a good thing and conflicts are managed. Criticism is constructive and is oriented toward problem solving and removing obstacles. The team makes decisions when there is natural agreement--in the cases where agreement is elusive, a decision is made by the team lead or executiv...

Decide

Many years ago, I worked with a person who could not make decisions. Neither big nor small decisions. That indecisiveness paralyzed our business in many ways. Unfortunately, the book, Decide: Work Smarter, Reduce Your Stress, and Lead by Example , had not been published. Had it, I would have shared it with my co-worker. Decide , published this past February, teaches readers how to make better decisions based on the real results they want to experience. The author, Steve McClatchy, explains how to use the two forms of human motivation -- Gain, or Prevent Pain , to make more effective decisions. For example, he demonstrates how inserting a Gain task in the middle of a Prevent Pain day can give you the energy you need to move forward and make the Prevent Pain tasks take less time through motivation. Deeper into the book, you'll be reminded about not only the problems with procrastination, but also about the benefits of procrastination, and, if you are ...

Coherence: The Secret Science Of Brilliant Leadership

Coherence: The Secret Science of Brilliant Leadership is the new book by author Dr. Alan Watkins . Trained as a medical doctor, Watkins is now an honorary senior lecturer in neuroscience and psychological medicine at Imperial College, London and an affiliate professor of leadership at the European School of Management, London. According to Watkins, coherence is the biological state achieved when elite performers experience maximum efficiency and super effectiveness, where body and mind are one . Coherence provides one of the most unique approaches to showing leaders how to be younger, smarter, healthier and happier -- which gives them the power to make decisions under pressure and achieve sustainable success. Prepare to spend quality time reading Coherence . It's not light reading. Kind of feels like a medical text book in parts. But, it's worth your commitment to it. I particularly found useful Watkin's discussion on culture , where he w...

5 Compelling Benefits Of Having An Ethical Culture

In Andrew Leigh's book, Ethical Leadership , he provides these compelling and important benefits of having an ethical culture in your business/organization: Customers prefer dealing with companies who put ethics at the center of their culture. Most employees would prefer to earn less working for an ethical company than being paid more and working for an unethical company. More than one in three people at work say they've left a job because they've disagreed with the company's ethical standards ( Trevino, L and Nelson, K - 2011 ) If you adopt an early warning system against misconduct it reduces the risk of you facing expensive litigation. An ethical culture helps you make your company a strong affirming place to work in. "The foundations of an ethical culture include values, attitudes, meaning, behaviors, purpose, and management practices," explains Leigh.

More Leadership Quotes From John C. Maxwell

The real gems in John C. Maxwell's book, Everyone Communicates Few Connect , book are the abundant leadership and communication quotes, such as these: To add value to others, one must first value others. People may hear your words, but they feel your attitude. All good communicators get to the point before their listeners start asking, "What's the point?" The first time you say something, it's heard. The second time, it's recognized, and the third time it's learned. In the end, people are persuaded not by what we say, but by what they understand. People pay attention when something that is said connects with something they greatly desire. Maxwell also says that: Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could . The book covers five principles and five practices to help readers so they can connect one-on-one, in a group, or...

Six-pillar Roadmap For How To Move From Merely Surviving To Truly Mattering

In the new book, The Mattering Effect: Creating A Life Of Meaning And Worth , podcaster and author John R. Miles reframes today’s most common struggles and empowers individuals and institutions alike to break bad habits and reclaim a sense of worth and belonging. “Organizations have spent the last decade chasing 'engagement' and 'psychological safety,' yet global productivity is stalling and 60% of employees report they do not feel valued in the places where they spend their days,” shares Miles. He calls this “The Great Erasure”—a condition where high-achievers become highly visible to the organization while becoming invisible to themselves. In addition, Miles argues that many of today’s most common struggles—burnout, anxiety, loneliness, and disengagement—are not personal failures or mindset problems. They are the result of unmattering: the gradual erosion of felt significance within modern systems that reward performance while overlooking presence. Fortu...

Make It Easy For Your Employees To Volunteer

Start planning now for this year's National Volunteer Week, April 15-21 . That's the week when nonprofit organizations throughout the U.S. will celebrate and honor their volunteers. If you are not already volunteering, what a great time to start. Make a commitment to yourself to start volunteering before that week starts! And, if you are a workplace leader who supports a volunteer program at your business, you already know that by encouraging employees to give back to your community you are: building teamwork motivating employees attracting new hires In fact, job seekers much prefer companies that have a strong volunteer program. And, a growing number of businesses are rewarding employees who volunteer by giving them extra vacation time and other incentives. Fortunately, throughout the U.S. there are hundreds of volunteer opportunities where employees can contribute individually, or where leaders can organize teams of employees to volunteer together on a routin...

3 Things To Avoid When You Give Your Next Speech

If you don't want to get your speech off to a bad start, the communications experts at Speechworks suggest you: Don't apologize (particularly about your anxiety or lack of preparation. Apologies put your audience on the defensive. Don't start by telling a joke (which may not be all that funny, or is irrelevant, or that may even be offensive to someone in your audience). Don't beat around the bush (including, don't list off a lot of people you want to thank. Don't waste your audience's valuable time) Instead: If you need to deal with your anxiety, practice like crazy . Rehearse particularly your first line over and over. Start your presentation by laying out for your audience a key issue that they are facing in their business . If you must thank someone, do it at the end, or thank your introducer briefly, pause, and then start right into the meat of your message .

How To Make One Bold Move A Day

Shanna A. Hocking ’s new book, One Bold Move A Day , is all about meaningful actions women can take to fulfill their leadership and career potential. Specially, Hocking reveals the transformative mindsets needed to make one Bold Move a day. Those are: Gratitude Mindset And Mindset Happiness Mindset Progress Mindset “Each of these four mindsets individually plays a special role in the process of continuously showing up for yourself and others,” explains Hocking. “Each mindset contributes in a different way to your success, but they all complement each other and together they will become the foundation to your Bold Move Mindset.” Hocking explains in her book that a Bold Move is one that challenges you to grow . “Sometimes it’s about capitalizing on an opportunity, and sometimes it’s about creating that opportunity for yourself,” explains Hocking. Keep in mind, too, that a Bold Move for you might not be the same as someone else’s. ...

Eric Jacobson On Management And Leadership

Search This Blog