Shah warns against discarding startup ideas solely due to low success probability
Dharmesh Shah · Frameworks to Become a Billionaire with HubSpot Co-Founder Dharmesh Shah | My First Million #197 · Jul 7, 2021 · at 1:06:23
HubSpot co-founder and CTO Dharmesh Shah explains his quantitative framework for evaluating startup and angel investment ideas on My First Million.
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“The common mistake people make is that they will look at the probability of success first, and almost exclusively as the high-order bit filter. It's like, oh, I had this idea, but the likelihood is like .1% that that's actually going to work, and so I'm not even going to think about what the potential could have been, or how passionate I may or may not be about it, and then they just kind of discard the idea. I think that is statistically unwise and an impractical move, and here's why, is that The way you should be looking at ideas is you kind of take the profit potential, like here's the possible outcome, multiply this, it's the EV, the expected value statistically of this thing.”
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