Expected Value
topic on 5 shows · 7 statements across 7 episodes
Founder's Journal 
the Knowledge Project 
Capital Allocators 
the a16z Podcast 
20VC
7 statements about Expected Value, every show
Simkin: Uncorrelated businesses scale profit linearly and variance sublinearly
“Our businesses being uncorrelated means that over the long run, I expect my profits to increase by the expected value of each of these businesses, but my variance, my standard deviation only to go up by the square root of the number of Businesses or exposures …”
Pujji: Mid-career VCs mistakenly apply rigid expected-value frameworks to all founders
“The middle ones in my experience, you know, it's sort of the hammer and a nail thing, right? It's like, if you're a hammer, everything looks like a nail. So everything they look at us through the expected value of how big could this be? If I put a dollar in, w…”
Duke: Parsing close-call options is impossible and a waste of time
“All we've determined is that they're close, and even if we could determine it, it's a bad use of our time. Because they are so close that you're probably going to be kind of about the same happiness either way, at least in expected value, and so you should pro…”
Koppelman: The expected value of unwritten creative ideas is zero
“The expected value of not doing the work is zero. Like there's no question about the EV of just thinking I'd like to write and not writing.”
Marks: Investors Cannot Rely Solely on Expected Value Calculations
“And so we can't just invest on the basis of the probability distribution and the expected value. We also have to take our own tolerances and predilections into account.”
Gordon: Great investors optimize for expected value, not loss avoidance
“And Mark, I think great investors think about expected value, not loss avoidance.”