a business plan fallacy

  • Wed, May 01, 2019 - 10:09am



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    a business plan fallacy

So this particular line was frowned on when I was flogging one particular company way back when:

If 10 trillion is sloshing around in world markets and just 1 percent flow into this new thing – Bitcoin price doubles.

That’s the “if 10% percent of the market goes into my product” business plan fallacy.  Nobody with two functioning brain cells would ever fall for such a thing.  You get kicked out of the VC meeting if you try that particular trick.  🙂

Seriously.  It doesn’t fly at all.  You have to have an actual reason why people will buy your product.  Pretending that money falls like rain equally on all products and, through the law of probability, 10% of the money will fall on your product – well its just silly.  Each individual in the marketplace makes their decision carefully – they don’t have infinite money.  As a result, money isn’t like rain.  People have to see value before they allocate cash, so you need to make some kind of value case, not a probability case.

A recession will happen at some point.  And then we will know how bitcoin performs.

My guess is, as with all recessions, money will tend to flow away from risk, and toward the places that help people pay down debt, buy food, and make their rent payments.