Steve Blank

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ESADE Business School Commencement Speech

Steve Blank

Unfortunately as we’ve learned from recent experience, using Return on Net Assets and IRR as proxies for efficiency and execution won’t save a company when their industry encounters creative disruption. Today billions of dollars that companies could have invested in innovation are sitting in the hands of private equity funds.

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Why Companies are Not Startups

Steve Blank

A consequence of using these corporate finance metrics like RONA and IRR is that it ‘s a lot easier to get these numbers to look great by 1) outsourcing everything, 2) getting assets off the balance sheet and 3) only investing in things that pay off fast.

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Intel Disrupted: Why large companies find it difficult to innovate, and what they can do about it

Steve Blank

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. Here are four reasons: First, companies bought into the false premise that they exist to maximize shareholder value – which said “keep the stock price high.”

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Pioneering Women in Venture Capital: Kathryn Gould

Steve Blank

I was on the way to my lifetime IRR of 90%. Two companies I helped start in 1992, DCTM and Grand Junction Networks both became Stanford business school cases and very valuable, successful companies. I loved the business, and I was good at it. But then, trouble.

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Fund Raising is a Means Not an End

Steve Blank

What is an IRR? The day you raise money from a venture investor, you’ve also just agreed to their business model. Here’s a simple test: If you’re the founder of a startup, go to a whiteboard and diagram how a VC fund works. How do the fund and the partners make money? How long is a fund’s life? What’s a win for them?

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Fund Raising is a Means Not an End

Steve Blank

What is an IRR? The day you raise money from a venture investor, you’ve also just agreed to their business model. Here’s a simple test: If you’re the founder of a startup, go to a whiteboard and diagram how a VC fund works. How do the fund and the partners make money? How long is a fund’s life? What’s a win for them?