Win/lose vs True/false
And the limits of managing to “number go up"
There’s basically two philosophies to manage around in early companies and the choice is often let implicit or unstated. But I’m not a subtle guy so let’s lay it out.
Option #1 - Win vs lose: make the number go up
Option #2 - True vs false: validate a thing, which unlocks an opportunity, that can turn into a business
The problem with a win/lose mentality too early in a company’s life is that
it prioritizes optimization and acceleration off a small base without necessarily answering what you’re doing or why it matters
it can create the delusion/illusion of success without getting to a step change that unlocks more capital and the next set of problems/opportunities
Early stage companies should be constantly graduating from one set of true/false propositions to the next rather than optimizing for throughput alone.
At some scale, most businesses turn into win/lose propositions. really great companies keep finding true/false bets along the way
Venture is great for funding falsifiable experiments with definitive outcomes. If you can’t orchestrate a test with a true/false outcome, don’t raise venture or treat it as pure FAFO round.
I want to return and say this is one of the cleaner mental models for startups. It's something I reference all the time with other founders. So thank you!