Sunday, December 09, 2007

Rules, Damned Rules, and Heuristics

Since I don't have the patience to reconstruct the elegant arguments of my lost post (including the careful and humorous references to Genghis Khan, The Princess Bride, football referees, and Dungeons and Dragons), I'm going to give it to you straight and raw.

Rules are dangerous because outside of natural laws of physics and chemistry, rules are rarely universal and consistent. You don't get the chance to attempt a saving throw to save your business from going under.

Whether or not "Get Big Fast" works as a rule for startups depends a lot on the external environment. Sometimes it is a good idea to get involved in a land war in Asia.

The best rule is consider the situation carefully and systematically, use heuristics when possible to save time and energy, but ultimately to trust your own judgment.

Your VCs care more about whether you build a successful business than whether you follow their suggestions. Google offered $30 million for Friendster, and Yahoo! offered $1 billion for Facebook. Yet Jonathan was wrong to turn down $30 million and Zuck was right to turn down $1 billion.


nikiscevak said...

Maybe Jonathan personally was wrong to turn down $30m but Friendster the company wasn't wrong to turn down $30m. 25m UV/mo isn't worth more than $30m? (even if their traffic is from Asia, Asians are still people too).

Chris said...


Friendster might or might not be worth more than $30 million at this point. However, the offer for Friendster was $30 million in PRE-IPO Google stock. The equivalent value today would be north of $300 million.