Saturday, September 24, 2005
The modeling spectrum and entrepreneurship
For the past year, by day I've been a mild-mannered engineering professor, but by evening I've been a wild and crazy chief scientist for a start up in ubiquitous personalization called Nextumi (see here). The other day I was thinking about our progression from the formation of the company to our current state and how that journey represented a trip along the modeling spectrum (see here, here and here, ) in terms of the case for the company.
At first, our thinking about the company was driven by intuition and barely articulable thoughts. As we planned more, we were able to articulate an increasingly elaborate story of what the company did. As time progressed, we got more evidence for the correctness (or incorrectness) of that model, and we adapted and moved on; at some point we started to make financial projections of what the company might earn, and we shifted from a qualitative view to a more quantitative perspective.
It is particularly surprising how powerful and important the early stories have been to gaining interest, investment capital, and indeed driving the development. Every company has a creation story, and stories of perils and heroism along the way, and in many ways these stories are as important to understanding and valuing a young company as the P&L and balance sheet.
At first, our thinking about the company was driven by intuition and barely articulable thoughts. As we planned more, we were able to articulate an increasingly elaborate story of what the company did. As time progressed, we got more evidence for the correctness (or incorrectness) of that model, and we adapted and moved on; at some point we started to make financial projections of what the company might earn, and we shifted from a qualitative view to a more quantitative perspective.
It is particularly surprising how powerful and important the early stories have been to gaining interest, investment capital, and indeed driving the development. Every company has a creation story, and stories of perils and heroism along the way, and in many ways these stories are as important to understanding and valuing a young company as the P&L and balance sheet.
