HBR On Strategy

To Make Better Decisions, Think Like a Venture Capitalist

Apr 2, 2025

Ilya Strebulaev, a professor at Stanford Graduate School of Business and co-author of "The Venture Mindset," discusses how businesses can benefit from thinking like venture capitalists. He explains the importance of accepting failure while pursuing impactful investments. Strebulaev highlights the advantage of fostering a culture of disagreement to enhance decision-making, suggesting strategies like appointing a devil's advocate. He also emphasizes how agility and innovation in large organizations can be improved by embracing diverse opinions and refining decision-making practices.

24:44

Episode guests

Ilya Strebulaev

AI Summary

AI Chapters

Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Embracing failure as a learning opportunity is crucial for growth, allowing organizations to foster innovation and experimentation.

Transitioning from a culture of consensus to valuing constructive disagreement enhances creativity and decision-making effectiveness in uncertain environments.

Deep dives

Embracing Failure as a Core Principle

A fundamental aspect of a venture capitalist mindset is the willingness to embrace failure as part of the growth process. This mindset encourages business leaders to view failures as learning opportunities rather than mere setbacks. An illustrative example is that venture capitalists expect most of their investments to fail, with successes being the anomaly that defines their portfolios. By focusing on the potential home runs and letting go of less successful projects, organizations can cultivate an environment that supports experimentation and innovation.

Intro

2min

Adopting a Venture Capitalist Mindset for Corporate Growth

3min

Navigating Consensus in Venture Capital

7min

Optimizing Decision-Making: Insights from Venture Capital Practices

2min

Venture Mindset in Corporate Decision-Making

14min

Venture capital firms notoriously embrace risk and take big swings, hoping that one startup will become a monster hit that pays for many other failed investments. This VC approach scares established companies, but it shouldn’t. Stanford Graduate School of Business professor Ilya Strebulaev says that VC firms have proven best practices that all leaders should apply in their own companies. He explains exactly how VC’s operationalize risk, embrace disagreement over consensus, and stay agile in their decision-making—all valuable lessons that apply outside of Silicon Valley. With author Alex Dang, Strebulaev cowrote the new book The Venture Mindset: How to Make Smarter Bets and Achieve Extraordinary Growth and the HBR article “Make Decisions with a VC Mindset.”

Key episode topics include:

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

· Listen to the full HBR IdeaCast episode: What Venture Capitalists Can Teach Companies About Decision-Makin g

· Find more episodes of HBR IdeaCast

· Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org