Startup Cairns helps startups reach their summits.
Cairns are landmarks that guide climbers’ ascents. Mountain climbing is a treacherous endeavor. Having scaled high peaks in the Himalaya, Alps and North America and lost a good friend on a climb, I appreciate the rewards and risks of aiming high. Cairns have helped me reach summits and descend safely in ominous conditions. Cairns have occasionally helped salvage success from sketchy situations.
Entrepreneurs begin ascents when they start a business. High potential startups face long odds on steep, treacherous terrain. Improper pacing is lethal as more companies die of indigestion than starvation. Climbing too fast risks altitude sickness, too slow risks perishing in storms. Route finding requires experience and judgment. The optimal route is never a straight line yet straying left or right leads to precipitous falls off knife-edge ridges. Amid many false summits, the final hundred meters is often the hardest. A successful summit is only half the journey, and descents are more deadly than ascents.
Even experienced climbers often use guides when exploring new territory. Trusted advisors are invaluable helping founders scale high peaks.
Successful entrepreneurs and experienced investors use mental models (implicitly or explicitly) for perspective and pattern recognition. Over 40,000 investors clamor to Berkshire Hathaway annual meetings, known as “Woodstock for Capitalists,” to hear the wisdom of Warren Buffett and Charlie Munger. Munger used a “latticework of mental models,” a collection of frameworks drawn from many fields to guide investment decisions. While The Portable MBA has ballooned to over 700 pages, Munger claims “80 or 90 important models carry about 90% of the freight.”
Munger left us in 2023 but offered “my sword … to him who can wield it.” A cottage industry has emerged compiling mental models that inform life decisions. I commend The Psychology of Persuasion by Robert Cialdini; Thinking, Fast and Slow by Daniel Kahneman; Metaphors We Live By with George Lakoff and Mark Johnson; Predictably Irrational by Dan Arielly; Clear Thinking by Shane Parrish; The Art of Thinking Clearly by Rolf Dobelli; and Seeking Wisdom by Peter Bevelin.
The most important mental models for entrepreneurs and venture investors differ from those discussed by Munger in Poor Charlie’s Almanack or in the above books. Over two decades at NGP Capital, we collected and developed a set of frameworks relevant to entrepreneurs and venture capital.
Startup Cairns is a partial collection of these models. I will share more in the coming months and invite other experienced investors and entrepreneurs to share their wisdom.
Your comments are always welcome, especially on useful frameworks that have guided you as an entrepreneur, innovator or investor.
Best wishes on your journey. May you achieve all your summits!