Be dumb. Waste Money. Win.
That which is “best” is not that which is best for you right now
I’ve been off! I was on vacation/at a wedding in Italy and was a little overwhelmed with some other work stuff in the run up to that. But I’m now ready for the great lock-in of 2026.
We’re so back.
This is a lightly edited version of a conversation I’ve been having with a number of founders recently. TLDR - why raise all this money if you’re not gonna accept losing some of it?
There are a lot things which are dumb for a generic/the modal business to do. But the generic/modal outcome for your startup is failure. So success may rest on your willingness to do out of distribution things that a “normal” business would balk at.
Going out of distribution looks smart if it works and dumb if it doesn’t (and dumb at the onset either way). So a willingness to tolerate stupid ideas/take seemingly stupid risks is required to get an out of distribution result.
That’s why you fund high risk startups with venture dollars vs personal balance sheet, rich dentists, or debt. We don’t just have a tolerance for failure overall (an investment may go to zero) but also at the dollar level (each dollar you spend may individually go to zero).
You finance a high risk endeavor with risk capital to allow yourself to tolerate risk/loss overall (the company may fail) and locally (the individual experiments may fail). Our capital is really expensive, and you can only justify spending it if you are taking on idiosyncratic, asymmetric bets.
Taking that into account you should 1) be willing to lose money on experiments and if you don’t you’re not experimenting rapidly/aggressively enough and 2) be willing to do things which other people can’t/won’t.
Specifically, do stupid things.
It is stupid to give away products for free or price at a discount/loss.
it is stupid to schizo- or cringe-post (which is spending credibility instead of dollars as currency)
it is stupid to buy companies for their data or reach.
it is stupid to spend hundreds of hours on services for a small contract.
All of this is stupid but may be necessary and prove genius if it has a sufficiently high pay off that ultimately does pay off.
High risk capital requires high risk and one of the surest ways to find high risk things is to do things that logic and reason would tell you not to do. Those things are often globally irrational and locally necessary.
That is, that which is “best” is not that which is best for you right now.
A business with something to lose and little to prove should never do dumb shit. A default dead startup fighting gravity and entropy must actively seek out dumber, bigger bets - at least at the margins.
You can’t run your startup in the business school optimal way to run a company because by an real measure it is not a company, it is a story and a basket of bets about the future.
Waste more money. That’s what it’s for.
Elsewhere
I showed up in a lot of media the last couple weeks while I was gone!
Charles Hudson went into more detail on What Capital Wants on his podcast The Learning Corner. Mercedes Bent referenced the same in her substack too.
I talked to Euclid Ventures at some length about the future of (vertical) software business models. I’m very bullish here; expect more longform writing from me on this.
I spoke to Alex Konrad in Upstarts about how being terminally online is bad for founders and investors, ““It is increasingly important to have an actively maintained cognitive security and cognitive hygiene. Because the meme cycle and the feverish breaking news coming out of startup land right now will truly break your brain.”
Nikunj Kothari gave me some credit for being early to legibility to capital.
Garry Tan and I got into it again over a stolen/badly copied version of The Four Jobs and I saw a job posting for a slop cannon in the wild at Dia. I expect both of those will keep happening.
Congrats to Angele
We are so stoked for and proud of Angele. She came here straight from undergrad and did exceptional work to push our thinking and pull us toward opportunities in robotics, energy, and maritime.
Very excited to keep working together and strongly endorse seeking her out.
I also read
The Financialization of Compute by Nat Levy Westhead. Glad to see him sharing more/more frequently.