Risk, Information, Time and Money (in 20 Minutes) by Dan Milstein

1. Risk, Information, Time & Money (In 20 Minutes)
Dan Milstein
@danmil
Hut 8 Labs
Tuesday, December 17, 13

2. First Principles = Win
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3. 1. Opportunity Cost
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4. Hut 8, Two Offers
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5. Client A:
PSD’s -> HTML
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6. $20/hour
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7. 8 hours of work/day
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8. Client B:
BIG DATA
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9. $200/hour
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10. 4 hours of work/day
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11. WHAT DO WE DO?!?
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12. Math
200 * 4 = 800
20 * 8 = 160
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13. Opportunity Cost:
$640/day
per person
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14. This is happening
at your startup
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15. 10 people, 1 year
Series B Valuation:
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16. $20,000,000
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17. $20,000,000
or
$0
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18. Opportunity Cost:
$8,000/day
per person
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19. $8,000/day
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20. Axiom 1:
It’s not all luck
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21. Axiom 2:
Teams that fail, work hard
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22. Be terrified of:
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23. Working on wrong things
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24. Don’t worry about:
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25. Working hard
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26. EVERYONE GETS THIS WRONG
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27. 2. Information & Money
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28. What if clients hide the rate?
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29. Spend a week researching
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30. That week makes us money
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31. Like, real money
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32. +
Information
Decision
Money
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33. 3. Risk & Information
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34. Chained Risks
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35. 1) Can we build it?
2) Will people buy it?
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36. Two Startups
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37. A) Teleportation
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38. B) Enterprise CRUD App
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39. Teleportation:
try to build
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40. CRUD app:
try to sell
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41. What is different?
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42. Degree of Surprise
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43. Information = Surprise
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44. Claude Shannon
is a boss
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45. “A startup is a temporary organization
formed to search for a repeatable and
scalable business model.”
- Steve Blank (also a boss)
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46. 4. Information & Time
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47. Rates of Change FTW
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48. Velocity = Meters/Second
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49. Velocity = Distance/Time
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50. Revenue = Dollars/Month
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51. Revenue = Money/Time
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52. Information = Money
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53. Revenue = Information/Time
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54. Again, real money
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55. 5. Risk, Information & Time
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56. Here’s where it gets fun
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57. Example: Health IT
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58. Velocity (aka Revenue):
Organizational response to
changing nature of risks
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59. NOBODY GETS THIS
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60. In Summary:
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61. In the presence of extreme uncertainty, you make
money by extracting information from reality.
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62. In the presence of extreme uncertainty, you make
money by extracting information from reality.
The most valuable information is that which reduces
uncertainty about the largest in a chain of risks.
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63. In the presence of extreme uncertainty, you make
money by extracting information from reality.
The most valuable information is that which reduces
uncertainty about the largest in a chain of risks.
To acquire information quickly, the whole team must
constantly adjust its understanding of risks.
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64. 6. Fear
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65. Leaders & Fear
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66. “Vision”
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67. Go Forth and Win
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68. Putting Principles Into Practice
@hut8labs
http://blog.hut8labs.com
Tuesday, December 17, 13

69. Putting Principles Into Practice
@hut8labs
http://blog.hut8labs.com
Tuesday, December 17, 13

70. Putting Principles Into Practice
@hut8labs
http://blog.hut8labs.com
Tuesday, December 17, 13