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Raise less, build more

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Re: Raise less, build more

#71

Earlier quoted context omitted.

> How would you start consulting in a sector you have no experience or proven track record with? Like billions of people, since time immemorial, have started at their first job ever. How would they start at a job in a sector they have no experience or proven track record with? That argument cuts deeper with directly creating a product with no experience or proven track record. The point of my original reply wasn't th…

Thanks for the insights, that’s an interesting story. I was thinking of becoming an independent consultant when you actually meant joining a consultancy business. That does sound like a great shortcut to understand a new industry.

I, indeed, meant becoming an independent consultant (or through one's company company), see the "Consulting" section in my reply here: https://news.ycombinator.com/item?id=37315111

Joining a consultancy business, unless specialized in the sector you want to enter, might be counterproductive because you lose control over what projects and problems you work on, and what sectors you work in. You definitely get exposed to many, though, which is nice.

I have avoided in my replies the famous bliss of ignorance that comes from not knowing much about a field. There are many founders who built a product for a sector or industry they knew little about and many of them said that had they known how hard it would be, they probably wouldn't have started. They were not aware of the Gods of Supermarket Aisles or the ways of the Golf Lawn Cartels and jumped with both feet. Being an outsider has its pros and cons.

Re: Raise less, build more

#73
post #63

Earlier quoted context omitted.

High return investment opportunities are limited in number and amount of cash which can be deployed into them. As cash under management grows a higher percentage of it gets invested into lower return investment opportunities which are better than risk-free rate, reducing the overall performance of the fund (relative, not absolute). Hypothetical: consider 100 startups each looking for $10m investment. One will return…

>High return investment opportunities are limited in number and amount of cash which can be deployed into them. As cash under management grows a higher percentage of it gets invested into lower return investment opportunities which are better than risk-free rate, reducing the overall performance of the fund (relative, not absolute). Larger funds supposedly being more risk averse COULD be a reason for less yield but i…

> If I have a billion dollars to invest I could invest it all in one fund or I could spread it out of a thousand small funds.

Assuming there are 1,000 small funds with an average rate of return higher than the large fund, sure.

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