7 comments

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  Ethan Bauley

  10 months ago

  Two quick thoughts:
  
  - You should link to this [and other work] on your panelpicker post
  - Maybe framing this in terms of "reducing waste" will help with traction...all those failed companies, all those people that cut checks...isn't there a way to pool risk? etc...
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  Taylor Davidson

  10 months ago

  Good point...
  
  "Reducing waste" is a good way to frame "why it's good to take small risks rather than large ones."
  
  I wonder if "pooling risk" is a misguided step towards addressing the need to mitigate entrepreneurs' risks.
  
  Investors do this: they mitigate risks by taking diversifying investments over multiple stages and pool risks to a degree by co-investing with partners.
  
  Can we create a structure to provide the same opportunity for entrepreneurs?
  - Partners: require / incent / fund partners (or even groups) rather than solo entrepreneurs?
  - Commit in stages; test ideas, stage-gate investments more, providing more points for entrepreneurs to end or up their involvement?
  - Diversify their commitments: pool risks with other entrepreneurs? Entrepreneurial collectives across a range of unaffiliated ventures?
  
  It's interesting that most of this challenges the archetype of the traditional entrepreneur; but why does that have to be the standard?
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  Ethan Bauley

  10 months ago

  That sounds like a strong step in the right direction...pooled entrepreneurial risk. I like the co-op structure for artists/bands/musicians...maybe it has some relevance here.
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• 

  g

  10 months ago

  TD, sounds very interesting. I think a model like this is very relevant in areas where there is no VC ecosystem and where the preception is one of too much risk.
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  Taylor Davidson

  10 months ago

  Good point, and the most interesting application may be in nurturing startup cultures in some parts of the world. perhaps the safety net of "pooled risk" and the halo brand of some startup successes running under the same corporate umbrella would help.
  
  maybe in some cultures Corporate VC would be more applicable and valuable since the corporation's name would be well-known, respected, "safe"...
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  Don Jones - VentureDeal

  10 months ago

  I'm a little late to the conversation on this post, but I'd like to make a few "devil's advocate" points.
  
  One of the problems of a "collective" concept is that the larger the pool of entrepreneurs, the harder it is to obtain any consensus on how to structure it or run it.
  
  Entrepreneurial ventures tend to attract individualistic, maverick, pioneering types and I'm not sure that that type of risk-taking, hardcharging personality is typically compatible with a more collegial, "pooled" mentality.
  
  If I'm going to work hard in order to potentially reap great rewards from a successful entrepreneurial venture, I'm not sure I would want to participate in a collective that somehow offloaded some of the other entrepreneurs risks onto me.
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  Taylor Davidson

  10 months ago

  Devil's advocate views are always appreciated.... granted, the idea of pooling risks could lead to a selection bias where all the "collective" gets are the bad risks / marginal business opportunities. And the idea might have limited application to certain industries, firm sizes, cultures, etc.
  
  And while I agree that entrepreneurial ventures do tend to attract people of those characteristics, there is nothing to say that they have to; it does not have to be the only model of entrepreneurial success. In any case the idea of an archetypical entrepreneur is not the same across all cultures and countries, and thus the applicability of a "collective" concept will vary considerably.
  
  Even entrepreneurs need partners; even entrepreneurs need people for support, to help drive and create, to share ideas with, to share experiences and lessons learned, and even to share risk.
  They key is that this "collective" concept will never replace the traditional entrepreneur & venture capital model: it is an addition, an extension, not a replacement. And thus it won't attract all entrepreneurs of all stripes: but that's ok. The opportunity is to extend the idea and reality of entrepreneurship to a larger base of people, enterprises and business relationships.
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