The Venture Mindset by Ilya Strebulaev and Alex Dang teaches nine principles that define the “Venture Mindset” and how even large companies can adopt the principles to achieve disruptive innovation.
I have served as an executive in big companies, attempting to champion disruptive innovations. I have co-founded tech startups that have sought funding from various sources. I have advised venture-backed startups as they ride the roller-coaster highs and lows of market success and funding rounds and tranches. Over the decades I have seen (and at times lived) the truths presented in The Venture Mindset over and over again and yet it has never made as much sense to me as it does now, thanks to the authors of this book.
In addition to being informative and helpful, Ilya and Alex have written a book that is a joy to read. It combines many of the attributes of my favorite books. It is full of real-world stories that bring the authors’ lessons to life; it is highly structured around nine specific and memorable principles; most of its conclusions are supported by scientific research; and it makes clear recommendations that the target audience could actually implement (although most won’t).
While many books point out the challenges big companies face in implementing the kind of innovation fostered in venture-backed startups, The Venture Mindset is rare in doing so within the context of explaining how large business practices enable those companies to be very successful in incremental innovation, and how big companies actually offer incredible advantages that no startup could ever match (resources, customers, scale). The book also does a much better job than most of identifying very specific actions big companies could make if they wanted to embrace the venture mindset, and explaining why doing so will be so hard.
The book is structured as an introduction, nine chapters, each on one of the nine principles that make up the venture mindset, and a conclusion.
As many of the other chapters do, the Introduction starts with a story — how a couple of venture capitalists took a risk on an early stage startup called Saasbe. They went against conventional wisdom and even the counsel of the other partners in their firm. Saasbe went on to great success, changing its name to one that all of us have come to know. They put the first $500,000 into a company that, at its peak, was worth $150 billion (and today is worth about $20 billion). They use the story to introduce “nine distinct ways in which the Venture Mindset succeeds where most people fail — or don’t even try.” These nine principles are:
- Home Runs Matter, Strikeouts Don’t
- Get Outside the Four Walls
- Prepare Your Mind
- Say No 100 Times
- Bet on the Jockey
- Agree to Disagree
- Double Down or Quit
- Make the Pie Bigger
- Great Things Take Time
Each of the nine chapters in the book takes one of these principles and fleshes it out. Each chapter includes stories from VCs and the ventures they back, as well as from the authors’ teaching and consulting experiences. Most chapters reference detailed research performed by the authors or others. The authors often point out how the Venture Mindset differs so significantly from how big companies operate. Each chapter also includes a section with specific lessons for big companies and specific actions they could potentially take to embrace the principle covered in the chapter. Each chapter closes with a short list of critical questions leaders should ask to discern how far they are from the venture mindset.
Bottom line, The Venture Mindset is perhaps the best book I’ve read on how a big company can innovate like a tech startup. Readers are given a clear picture, a well-marked path, and realistic expectations if they choose to set out on the journey towards disruptive innovation.