Category: Decision Making

Alternative Investments, Culture and Ethics, Decision Making

Venture Capital and Avoiding Human Bias

Gregory Pearl

Here are some thoughts on Venture Capital or early-stage investing. As readers of my blogs know, Alteris LLC has had professional Venture Capital firms as clients. We have acted as business valuators, but also in the role of “operating partners” to some of these firms. This situation has allowed us to observe best-practices in these early-stage investment firms. Venture Capital and other types of investing is a competitive and often brutal activity. In a typical VC fund, a small number of investments typically account for a large portion of returns. The simple fact is that the majority of investments do…

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Alternative Investments, Culture and Ethics, Decision Making

Three Deadly Sins of Startups

Gregory Pearl

If you have been around the venture capital industry for a while, you will know the “three deadly sins” VCs look to avoid in a potential new early-stage investment. Standard questions VCs ask entrepreneurs often focus on these. You hear this over and over from investment partners at these firms. I’ve worked extensively with an international venture network, and sure enough – it is a focus. Here are the three: 1) The founder (me!) must be the boss, always and forever 2) Too many products, no focus 3) Not enough capital Smart founders know these are hot issues for VC…

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Alternative Investments, Decision Making

How To Design A New Market Entry Program

Gregory Pearl

Any new market entry program should be designed to increase your chances for success in the North American marketplace. To succeed, develop individualized strategies based on proven strategy techniques and policies.  Then it is necessary to support those entry strategies to successfully implement. Due to the sheer size and diversity of the USA (and North America), a company attempting a market entry cannot simply and without local market knowledge choose a strategy, operational business platform and location. Many factors must be considered, including real estate, the labor market, the regulatory environment, local taxation, operational logistics, manufacturing and sourcing potential, proximity…

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Alternative Investments, Decision Making

What good are derivatives and futures? To keep the tulips in line!

Gregory Pearl

One of the greatest bubbles of all time was the Dutch Tulip mania that collapsed in 1637. At one point before the collapse, a couple of Tulip bulbs were worth enough to buy a house. I can only imagine the sweet schadenfreude of the average Dutch citizen watching the demise of their fellow countryman when the bubble burst. This was probably the first recorded speculative bubble. So what caused that bubble to occur? For this discussion, let’s replace tulips with Bitcoin. No this is not an arbitrary bait-and-switch metaphor. The two possess the same dynamic and the example is more…

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Culture and Ethics, Decision Making

Competency Trap or Kill-The-Goose-That-Laid-The-Golden-Egg?

Gregory Pearl

How many successful companies miss out on ultra gigantic opportunities in their industry? ATT had developed some early technology for mobile communications in the 1940s. (Yes, the 1940s). It was difficult to bring to market because of technical hurdles. Rather than continue to research and innovate to overcome these difficulties, ATT gave up and other companies took the market later. Motorola developed some of the first cell phones but also was slow to innovate.  They played catch up, succeded with some innovation with the  RAZR yet completely lost the market on the death of an influential marketing leader. Xerox was…

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Culture and Ethics, Decision Making

Four Pillars to Successful Change Management

Gregory Pearl

Almost all organizations have employees, sub contractors or other types of associates.  These are your ‘Colleagues” though their exact role and relationship to the organization will vary. We need to manage and sometimes to engineer organizational change. That’s usually a difficult task and the track record of these transformations is usually not a positive one. Psychologists – academic researchers and others – have developed some ideas on what seems to be some of the more effective ideas on what will work. This model consists of what I call the Four Pillars of Transformation – four things that can be done…

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Decision Making

My Favorite Cognitive Biases #2

Gregory Pearl

My last post listed some great cognitive biases. The human mind is easily fooled by both ourselves and others! I could list more, of course.  There is so much published on this topic that it could fill many posts. That being said, here is a bunch more. Gambling System Bias – gambling is a real problem that causes harm. I’ve seen the damage gambling can do in my own family growing up. There’s always a rationalization. And they stick to their ‘system’ well beyond the point where it obviously doesn’t work. I heard an old gambler one time say as…

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