Sublime

A word on rate of return as a strategic principle of business. I am not going to say that rate of return is a magic wand for every occasion in business. There are times when you have to spend money just to stay in business, regardless of the visible rate of return. Competition is the final price determinant and competitive prices may result in prof

The point I wish to make here relates not to technique — which other people know better than I do — but to the general principle of rate of return as the measure of the worth of a business. That idea was fundamental in my thinking about management problems.

the proper perspective on an investment is not what you have made so far, but rather the risk and reward ratio at any given point. The price you paid for a stock is irrelevant.

Gurley cast cold water on the proposal to go public, however, by asking, “Is it built to win?” He explained, “GM is built to last, but it’s got so much bureaucracy, it’s not going anywhere.” Maybe “built to last” was not the right criterion to optimize on.

You know why VCs are like this? It's not that they are bad people; it's the limited partners. And who are the limited partners? Our great institutions—Harvard University, Stanford University, UC Berkeley. So if you want to point up the chain of accountability, when those people stop measuring performance just based on the return numbers, things cou