The New Venture Decision: A Defense of the Always-Moving Entrepreneur

This is a guest post by Brian Lash who can be found at his entrepreneurial blog BrianLash.com (feed).

How do you approach new business opportunities?

Perhaps you’re the type who performs some due diligence, but then enters the marketplace with a try-a-lot-of-stuff-and-keep-what-sticks attitude. You define entrepreneurship, from your willingness to pursue your reward in the face of grandiose risk, right down to your street-smart practicality and shrewd eye for the bottom line.

Yet I bet that in other intervals of your lifetime you’ve found yourself wildly excited about business opportunities, ready to “grab the bull by the horns,” eager to “redefine the way X population does Y”

…but shirked.

“I’ll know enough about the business after I read this book,” you’ve said.
“I just need to learn more about the industry. To read more trade journals. To attend another industry event.”

I won’t pretend to understand why you’ve stalled in the face of opportunity – I can only guess as to my own reasons. Anyway, that’s a topic for another forum.

Instead, I want to highlight the dynamics of new venture creation, and to make the case that when we adopt the roles of entrepreneurs-in-waiting, we risk barring ourselves from valuable business opportunities. And that we do so by design.

Following is a model of what we’ll call the New Venture Decision – or a model of the choice an entrepreneur faces when she must discriminate among varying business opportunities.

Venture Opportunities


The model adopts the perspective of one with no specialized knowledge. At its center is a figure we’ll term an “entrepreneur-in-waiting.”

Business opportunities surround our entrepreneur, where the smallest ideas – those closest to her – are least desirable. They exist in saturated markets. They’re tried-and-true. And while they’re characterized by low risk, they also imply low returns. Correspondingly, these ideas are most knowable, which is why they appear in black.

Similar thinking applies to those ideas further from the entrepreneur, where somewhat- and highly-desirable ventures occupy spaces increasingly distant from her. Still, there’s a lot of uncertainty to these ideas. Perhaps they rely on unproven business models, or maybe they rest on nascent technologies. Either way, they’re less knowable to our one without industry knowledge than those tried-and-true businesses that exist on the immediate horizon.

Among the three parameters of this model, our entrepreneur-in-waiting will favor those opportunities which are 1) distant (read: more innovative, or less ordinary), 2) larger (or favorable given risk and reward characteristics) and 3) black (or highly-knowable).

So our entrepreneur has a choice.

She may choose to enter the marketplace. Fumble around. Fail. Refine her strategy. Perhaps adjust her business model or her strategies or her value proposition. Fumble again. Then have another – a few more – go(s) at the market, but with a new outlook.

Or she can sit. And think. And read. And hope that her will to pore over industry materials places her at the nexus of distant-larger-black.

But the realities of new venture creation illustrate why the latter strategy is doomed for failure. Consider that:

  • 1. the entrepreneur is limited to how much she may learn when she is out of context. In the model, this is termed the “Knowable frontier.” To misquote Tom Kelley of IDEO, “You can’t understand the lion if you aren’t in the jungle.” Consider how this principle relates to your own successful ventures: To what extent were your product development decisions, short- and long-term strategies informed by customers’ feedback. Knowledge at this level of specificity is lost on entrepreneurs-in-waiting.
  • 2. the marketplace isn’t static. Industries change. Business opportunities change. And perhaps most importantly, we change.

So what lessons may we take from the New Venture Decision model?

A few, but most importantly: Keep moving. There’s nothing wrong with due diligence, but don’t find yourself stuck in the entrepreneurs-in-waiting category. Be ready to learn as you go, and prepare yourself for the failures (and successes) that typify such an ethic.

Do this and you just might find the opportunity