John Doerr on Risk.

John Doerr on Risk. We were having a good conversation on types of risk yesterday in our weekly meeting at Ignition, and Jon Anderson tracked down some of John Doerr’s thoughts on risk…good reminders:

?So one of Kleiner’s laws has always been that you want to get the risk up front, out of the way early. You prefer to take technical risks (rather) than market risk. And when you stick to those rules of investing, you’ll have some investments that fail and some big swings at the plate that look in hindsight embarrassing, but overall you’ll maximize the probability that you can help entrepreneurs make really big, important companies.? —

“Market risk is the most deadly. Technical risk is the least worrisome.” — L. John Doerr, a partner is the Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers, as quoted by John Heilemann in “Letter From Silicon Valley – John Doerr is revolutionizing the high-tech business, for the second time” The New Yorker (August 11, 1997) 28-36

“Risk comes in four parts. There’s technical risk: can we split the atom? There’s market risk: will the dogs eat the dog food, or the fish jump out of the tank? There’s people risk: will the people who founded the company stick around? And there’s financing risk: can we get the money?”
— L. John Doerr of the Silicon Valley venture-capital firm Kleiner, Perkins, Caufield & Byers, quoted in the New Yorker, August 11, 1997

?There are four kinds of risk we have to confront in each deal. There is technical risk: Can we split the atom? There is people risk: Will the key players on the team stay together? There is financial risk: Can we keep the company well financed? And there is market risk: Can we get the dogs to eat the dog food? The most dangerous of these risks is market risk. Removing market risk is expensive?.. We are risk takers but we will take a technology risk over a market risk any day of the week.? — John Doerr, The Internet Bubble p. 74