<p>The Bay Area Founders Club was founded by&nbsp;<a href="https://www.linkedin.com/in/paul-fang-ph-d-987b06108/" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">Dr. Paul Fang</a>&nbsp;in Silicon Valley in 2022. It has over 4000 members, including more than 120 startups and over 80 venture capital firms. Most startups have raised $1-5M, with some exceeding $20M. Our mission is to foster a strong and collaborative community of AI and Web3 entrepreneurs and investors, where we can all grow together.</p><p><br></p><p>Follow us on&nbsp;<a href="https://www.linkedin.com/in/paul-fang-ph-d-987b06108/" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">LinkedIn</a>&nbsp;or&nbsp;<a href="https://twitter.com/PaulFangBayArea" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">Twitter</a>&nbsp;to stay updated!</p><p><br></p><p>In today's fast-paced, innovation-driven business landscape, the ability to make&nbsp;<strong>bold</strong>,&nbsp;<strong>strategic</strong>&nbsp;decisions can make all the difference between success and failure. As research has shown, the venture capital industry has played a pivotal role in the rise of many of the world's most successful companies. But the true power of the "<strong>venture mindset</strong>" extends far beyond the confines of Silicon Valley - <strong>it's a way of thinking that can benefit decision-makers in organizations of all sizes and across diverse industries.</strong></p><p><br></p><h2><strong>Home runs vs strikeouts!</strong></h2><p>At the heart of the venture mindset is a fundamental shift in perspective. Rather than playing it safe and optimizing for incremental gains, venture capitalists and the most successful entrepreneurs embrace a mindset of calculated risk-taking, where "home runs" matter far more than "strikeouts." This means being willing to fail fast, learn quickly, and double down on the ideas and opportunities that show the greatest potential for outsized returns.</p><p><br></p><h2><strong>Prepared mind</strong></h2><p>One of the key principles of the venture mindset is the recognition that the best ideas and opportunities often don't come from within your own four walls. Successful venture capitalists spend the majority of their time out in the field, actively seeking out new deals and connecting with founders who may not have even considered reaching out to them. This "<strong>prepared mind</strong>" approach allows them to identify promising opportunities that might otherwise be overlooked.</p><p><br></p><p><a href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F67870003-547a-445e-b27f-00c77916f792_663x1000.jpeg" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));"><img src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F67870003-547a-445e-b27f-00c77916f792_663x1000.jpeg" alt="The Venture Mindset: How to Make Smarter Bets and Achieve Extraordinary  Growth" height="662.1417797888386" width="439"></a></p><p><br></p><p>Ilya Strebulaev, a professor at the Stanford Graduate School of Business and author of the new book "<strong>The Venture Mindset</strong>," has spent years studying the decision-making processes of venture capitalists and the most innovative organizations. He emphasizes that this mindset of actively seeking out new ideas and being open to disagreement is critical not just for startups, but for large, established companies as well.</p><blockquote>"<em>If everybody's in the room and everybody tends to agree, well, maybe you should meet again, or maybe you should change the decision-making rule, or maybe you should not be making this investment decision or any decision,</em>"</blockquote><p><br></p><p>Strebulaev explains.</p><blockquote>"<em>In order to catch that home run, the jackpot, those home runs are provocative, are controversial, are not obvious. So if everybody agrees, Likely that is not a home run</em>."</blockquote><h2><br></h2><h2><strong>Agree to disagree</strong></h2><p>This principle of "<strong>agreeing to disagree</strong>" is another hallmark of the venture mindset. Successful venture capital firms often structure their decision-making processes to actively encourage dissent and diverse perspectives, rather than seeking consensus. This helps them avoid the trap of escalating commitment to failing projects or ideas, and instead focus their resources on the opportunities with the greatest potential.</p><p><br></p><p>Amazon, for example, has embraced this venture-minded approach, with a culture of "<em>start small, scale fast.</em>" The e-commerce giant experiments relentlessly, launching numerous new initiatives and products, many of which fail. But when they do find a winner, they pour resources into scaling it up rapidly.</p><p><br></p><p>As Jeff Bezos has said,</p><blockquote>"<em>Everything needs to scale, including the size of your failed experiments</em>."</blockquote><p><br></p><p>Similarly, Netflix has consciously adopted a venture mindset, with CEO Reed Hastings openly acknowledging that the company must have a higher "cancel rate" overall in order to find its biggest hits.</p><blockquote>"<em>We have to take more risk because we should have a higher cancel rate overall, which is failure rate,</em>"</blockquote><p>Hastings has said.</p><h2><br></h2><h2><strong>The 9 tenets of venture mindset</strong></h2><p>Strebulaev’s book talked more than just what I’ve included above. He delves into 9 key principles that define the venture mindset and demonstrate how they can be applied to drive innovation and growth in any organization, regardless of industry or size. By understanding and embracing these tenets, YOU can unlock new possibilities and position their companies for long-term success.</p><p>Here’s the gist for curious and eager readers:</p><h3><br></h3><h3><strong>1. Home Runs Matter, Strikeouts Don't</strong></h3><p>In the venture capital world, the focus is not on avoiding failures, but on finding the rare "home runs" that can deliver outsized returns. This mindset stands in stark contrast to the risk-averse approach often found in traditional corporate settings, where a single misstep can derail a career. Venture investors understand that failure is an inevitable part of the innovation process and embrace it as a necessary step towards greater success.</p><h3><br></h3><h3><strong>2. Get Outside the Four Walls</strong></h3><p>Venture capitalists are rarely found in their fancy offices; instead, they are out in the field, meeting with founders, attending industry events, and immersing themselves in the latest trends and technologies. This "get outside the four walls" mentality allows them to stay ahead of the curve and identify promising opportunities that may not be visible from within the confines of the corporate headquarters.</p><h3><br></h3><h3><strong>3. Prepare Your Mind</strong></h3><p>Successful venture investors don't wait for the perfect pitch deck or a polished presentation before making investment decisions. They are constantly priming their minds to recognize and seize opportunities, even in the most unexpected places. This "prepared mind" approach enables them to act quickly and decisively when the right opportunity presents itself.</p><h3><br></h3><h3><strong>4. Say No 100 Times Before Saying Yes</strong></h3><p>Venture investors are masters of saying no. They understand that for every opportunity they say yes to, there are countless others they must turn down. This disciplined approach to decision-making allows them to focus their resources on the most promising ventures and avoid getting bogged down in mediocre ideas.</p><h3><br></h3><h3><strong>5. Bet on the Jockey, Not the Horse</strong></h3><p>Venture investors place a greater emphasis on the people behind the idea than the idea itself. They recognize that a talented and driven team can often overcome the limitations of a less-than-perfect concept, while a subpar team is unlikely to succeed even with a brilliant idea.</p><h3><br></h3><h3><strong>6. Agree to Disagree</strong></h3><p>In organizations driven by consensus, bold decisions are often stifled. Venture investors, on the other hand, have developed mechanisms to help them "agree to disagree" and make decisions quickly, even in the face of dissent.</p><h3><br></h3><h3><strong>7. Double Down or Quit</strong></h3><h3><br></h3><p>Venture investors are not afraid to make tough decisions. When a venture shows promise, they are quick to double down and invest more resources. Conversely, if a venture is not living up to expectations, they are equally willing to cut their losses and move on.</p><h3><strong>8. Make the Pie Bigger</strong></h3><p>Successful venture investors understand that true value creation is not about dividing up a fixed pie, but about expanding the pie itself. They are constantly looking for ways to grow the overall market and create new opportunities, rather than simply competing for a larger slice of an existing one.</p><p><br></p><h3><strong>9. Great Things Take Time</strong></h3><p>Venture investors have a long-term perspective that is often lacking in traditional corporate settings. They recognize that building a truly transformative business takes time and patience, and they are willing to make the necessary investments to support that growth.</p><p><br></p><p>By embracing these nine tenets of the venture mindset, organizations of all sizes and industries can unlock new avenues for innovation and growth. Whether you're a corporate executive, a startup founder, or a seasoned entrepreneur, understanding and applying these principles can help you navigate the challenges of today's business environment and position your organization for long-term success.</p><p><br></p><p>As we've seen with the remarkable rise of companies like Zoom, the venture mindset can be a powerful catalyst for transformative change. By learning from the strategies and decision-making processes of venture capitalists, leaders can cultivate a culture of innovation, risk-taking, and bold decision-making that can propel their organizations to new heights.</p><p><br></p><p>So, if you're ready to break free from the constraints of traditional corporate thinking and unlock your organization's full potential, check out the nine tenets of the venture mindset and start putting them into practice today. The future of your business may just depend on it.</p><p><br></p><p>We will bring more stats and content for industry trends like this to our audience in the coming few weeks. Stay tuned!</p><p><br></p><p>Thanks for reading my newsletter. You can follow the author here: Angelina<a href="https://www.linkedin.com/in/meetangelina/" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">&nbsp;Linkedin&nbsp;</a>or&nbsp;<a href="https://twitter.com/angelina_magr" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">Twitter</a>&nbsp;or&nbsp;<a href="https://medium.com/@angelina-yang" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">Medium</a>,&nbsp;<a href="https://www.transformaistudio.com/" rel="noopener noreferrer" target="_blank" style="color: var(--print_on_web_bg_color, var(--color-primary));">Venture</a>.</p><p><strong>Source of images/quotes:</strong></p><p>Source Content: The Venture Mindset book by Ilya Strebulaev and Alex Dang</p>

Qihang Fu

Decoding the Venture Mindset: How to Make Bolder, Smarter Business Decisions

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