As I have quoted before, Paul Gompers of HBS succinctly notes that management is the optimization of resources and entrepreneurship is the optimization of opportunity. Optimizing resources is tough enough, and you can generally count your resources. Optimizing opportunity is fraught with uncertainty, starting with characterizing (let alone quantifying) what the opportunity really is. Entrepreneurship, and startup investing, operates in a field of uncertainty, often massive uncertainty.
Many others have written about how to manage that uncertainty, and I can say, with certainty, that even the good articles do not reduce uncertainty. At best they clarify that any decision is better than none, and send you out to test hypotheses, find failure through controlled experimentation and generally do more faster.
I don’t think I am adding deeply to the field of uncertainty studies with this posting, but here are a couple of interesting quotes and my own comments.
I can’t find the source of the quote “confusion is a prelude to clarity” (though you can buy the t-shirt), but it brings to mind the most unlikely seeker of uncertainty, Alfred Sloan. Sloan was the legendary CEO of General Motors and is credited with being one of the fathers of modern management. When chairing a board meeting in which an important issue was being discussed, Sloan said “Gentlemen, I take it we are all in complete agreement on the decision here . . . Then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.” (Note: sources differ on the exact wording.)
Another great quote, which I hesitate to admit I first read in a Tom Clancy book, is “no plan survives contact with the enemy” (Helmuth von Moltke). I prefer the variant “no plan survives contact with the enemy and no battle was won without a plan.”
The conclusions are unsurprising for those in the startup world, but intriguing coming from regimented management practitioners and military minds: embrace and seek uncertainty, expect uncertainty, prepare for uncertainty.