Capital Reinvestment
What is the best way to proportion time and capital between core operations and experimental activities?
| Amount | Reinvestment |
|---|---|
| 70% | Core business |
| 20% | Adjacent |
| 10% | Experimental |
Reinvestment formula taken from Google.
Risk vs Reward Analysis
- Quantify predictions of domain experts with a deep understanding of the job to be done
- Understand how value flows from first principles
- Size bets by documenting thought process to establish probabilities
- Time beats timing
- Delay gratification
- Avoid excessive risk
tip
The best way to win is not to lose.