That is, winning is all about the moves. And moves, in turn, are all about the situation. Contrast this to today’s Silicon Valley fashion of “pattern matching” which seems the opposite — all about the players and not so much about the moves.
Consider Blippy, a bad idea if there ever was one, which created a $13M VC sinkhole for a service to share credit card receipts on your social network. Let’s look at the founders: two recent Stanford engineering grads and an experienced entrepreneur, Philip Kaplan (most famous for bubble-era website, F**kedCompany).
How about Cuil? (Pronounced coo-il.) Cuil launched in July, 2008 claiming to be the next Google with superior indexing and operational cost advantages. It seemed clear to me (and the world) that from the start, Cuil wasn’t any better than Google. They burned $33M in VC and entered theTechCrunch deadpool in Sept, 2010. Let’s look at the founders: three ex-Google engineers, two of them PhDs and one from Stanford.
When pattern matching is the rage, when the moves are so obviously bad, and when the players so clearly match the pattern, I’d argue that Blippy and Cuil broke Fischer’s law. They weren’t about the moves; they were about the players.
I used to joke that if you wanted to raise money in Silicon Valley you should be aware that VCs see people in one of four buckets:
- Made me money before.
- Made someone money before.
- Went to Stanford
- Everybody else
Now, make no mistake, the team is has always been a key factor in venture capital investment. But I think the historical approach was to see the team as de-risking element for the idea. Put differently, we are investing in a market opportunity and we would like to isolate as much risk as possible to the market opportunity. How do we do that? By getting an experienced executive team to reduce execution risk, by hiring experienced engineers to reduce product development risk, etc. That is, as VC founding father Don Valentine used to say, “great markets make great companies.”
(Asides:  Irony alert in the above video where Don tells a bunch of Stanford graduate students it doesn’t matter where they go to school and  note further that Valentine was a pithy quote machine, coming up with such classics as “I am 100% behind my CEOs up until the minute I fire them” and “all companies that go out of business do so for the same reason – they run out of money.”)
Somehow I wonder if things haven’t gotten upside-down of late: where the players matter more than the moves. I’d argue that Silicon Valley used to be about the moves (the strategy and market opportunity) and VCs sought experienced players as a risk reduction technique. Now, it appears to be about the players and the implicit assumption that those who match the player-pattern can win any match, regardless of the moves.