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The Common Knowledge Game and Too Small to Fail
Howard Lindzon
October 17, 2018
It was nice to see the markets bounce where they needed to the last few days.
If you were sick to your stomach about your portfolio or certain stocks in your portfolio last week…this morning would be a much better time to panic.
Onward…
I loved this post from Ben Hunt titled ‘The Common Knowledge Game‘…the gist:
With Saudi Arabia, the ubiquitous private information was that Saudi Arabia is a thug state and their Crown Prince MBS is a wannabe Bond villain. But no one acted AS IF they knew this until a Missionary event – in this case Turkey’s very public denunciations of the Saudi government’s murder of Jamal Khashoggi – turned that private information into common knowledge, something that now everyone knows that everyone knows.
And once that common knowledge was created, once all the private holders of Saudi Arabia’s dirty secrets believed that everyone else believed that this is one of the most brutal regimes on Earth, then everyone’s behavior changed on a dime. All of these CEOs and Senators and Prime Ministers and movie stars are shocked … shocked! … to hear of this atrocious behavior, and certainly will no longer be attending this gala conference scheduled for next week, even though NOTHING had changed in the information they already possessed.
Sigh.
It’s all a little much, frankly, and it reminds me of how … disappointing … human beings are, particularly in group dynamics. But I get it. The proper forms must be followed. Outrage must be displayed, no matter how inauthentic its “discovery”, once everyone knows that everyone knows that outrages have occurred.
The blood money is running thick right now in the startup ecosystem including venture capital.
No judging but at a time when everyone is upsizing their funds and their rounds and their valuations … it’s ok to be too small to fail.
There is nothing wrong with founders being very capital efficient and focused on unique angles of attack to wedge into the world. Being too small to fail means getting your cap table and your starting team right before you run fast into the opening you see.
It’s ok to be light and lean and the right kind of fast.
PS – Fred Wilson has a great post titled ‘When Software Just Gets Smarter‘. Other than my public market exposure to fashology (Apple, LULU, Nike), Fred’s post is a good reminder why software centric companies continue to dominate.
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