They are just trying to raise some quick start capital, without having any well defined idea what so ever
Is that a smart thing to do? The advice is based on the assumption that they have an actual idea for their business. Lacking that, how far would you expect to get even with capital?
It can be a smart thing to do; it depends on the situation. If I’m able to successfully run a lot of different kinds of businesses and am willing to choose what business I start based on what kinds of businesses venture capitalists are willing to fund, for example, I may be eliminating my primary comparative advantage by being specific about the kind of business I want to run. (Of course, I can also reframe this as a two-phase operation: in phase one I gather information about what kind of business it’s best to propose, and in phase 2 I propose it specifically. It’s just that sometimes phase one and two occur within five minutes of one another in the same conversation, and the results of both are discarded for the next conversation.)
Lacking that, how far would you expect to get even with capital?
Further than they would of gotten without the capital, but still ultimately nowhere. edit: or they might end up hiring some really bright guy—by dumb luck—that will set the plan straight.
See, the advice is very solid if the businessmen are ultra intelligent people who need to be told to think more. But by the sound of it, the businessmen are not very bright people who can’t come up with any workable idea and don’t understand that other people can. The best advice in these circumstances is—come up with a plan or go do something else if you can’t. edit: i.e. i mean, it is assumed politely that they have a plan, which they fail to convey. But it is typically the case that there is no plan in the first place, and often, not for lack of trying. In person one needs to be polite, but when we discuss people’s behaviours we should try to be as close to reality as possible.
Is that a smart thing to do? The advice is based on the assumption that they have an actual idea for their business. Lacking that, how far would you expect to get even with capital?
It can be a smart thing to do; it depends on the situation. If I’m able to successfully run a lot of different kinds of businesses and am willing to choose what business I start based on what kinds of businesses venture capitalists are willing to fund, for example, I may be eliminating my primary comparative advantage by being specific about the kind of business I want to run. (Of course, I can also reframe this as a two-phase operation: in phase one I gather information about what kind of business it’s best to propose, and in phase 2 I propose it specifically. It’s just that sometimes phase one and two occur within five minutes of one another in the same conversation, and the results of both are discarded for the next conversation.)
Further than they would of gotten without the capital, but still ultimately nowhere. edit: or they might end up hiring some really bright guy—by dumb luck—that will set the plan straight.
See, the advice is very solid if the businessmen are ultra intelligent people who need to be told to think more. But by the sound of it, the businessmen are not very bright people who can’t come up with any workable idea and don’t understand that other people can. The best advice in these circumstances is—come up with a plan or go do something else if you can’t. edit: i.e. i mean, it is assumed politely that they have a plan, which they fail to convey. But it is typically the case that there is no plan in the first place, and often, not for lack of trying. In person one needs to be polite, but when we discuss people’s behaviours we should try to be as close to reality as possible.