Innovation versus discipline

I was in a conversation with some LPs, GPs and other partners, just talking about the commonalities of the good investments that have paid off for them and trying to develop some pattern recognition on the successful cases.

For me, i think startups end up falling into two camps, with an overlapping third that materialises over time.

On one side you have guys who are purely about ideas and innovation, they see the future and the potential for things. On the other side you have people who are focused on growing profitable businesses that are stable. The third group are those few that straddle both camps, both innovating, forward thinking, but also attempting to be run as well run businesses.

I observe that the innovation camp has more ‘hopium’ more ppl who don’t really think about execution or systems, focusing on that side, you’re investing in paradigm shift visions. They are all or nothing asymmetrical opportunities, or at least they’re trying (or trying to pretend to be)

On the otherside, you’re typically looking at almost ‘boring’ businesses, never really impressing due to limited growth, or addressable market potential, even if very profitable and well run.

the real winners are those that balance innovation with sound business fundamentals.

And what is common about these companies is discipline.

They innovate, but it’s focused, deliberate, they say no to things that deviate from the focus. they have processes that are considered and clear, they have sound business fundamentals with the reporting and control. They have consistency.

Running a startup is the same as running any business, the difference is the speed, they differ by degree, not in kind. To move faster than everyone else, you need more discipline than everyone else, not more innovation.

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