The safer and smarter way for VCs to bet on startups

The venture capital (VC) business is often described as a high-stakes form of gambling. And right now, nobody’s in the mood to bet much on anything.

Indeed, uncertainty reigns as recent global events and economic disruptions have stalled much of the American economy. It's natural for VCs to feel hesitant or start pulling back on potential investments during such turbulent times.

I understand these instincts. But what if I told you that technology exists to make betting on startups safer and smarter than ever? Essentially, VCs could have access to better odds and inside information – the kind of information that gamblers crave.

Given that advantage, now would be the ideal time to aggressively place bets while the rest of the market is panicking. This isn’t just theoretical.

An emerging form of?artificial intelligence?(AI) could dramatically alter the practice of venture capital investment, a business largely driven by a combination of gut and analytics.

The vision is that VCs will be able to identify startups predisposed to succeed and that founders will be able to skip their growing pains right off the bat.

It’s fascinating to consider the potential impact of current economic challenges on the investment world. It's even more thrilling to speculate about how this could promote American innovation and speed up technological advancement in society and business.

The Promise of Lean AI

These are lofty dreams. Yet that’s exactly the promise of?Lean AI—a potentially revolutionary tool in venture capital.

If you think about the typical tech startup or even a cutting-edge consumer brand – both would pride themselves on being data-driven and highly efficient when acquiring customers.

Any startup launching today would pride itself on being laser-focused on managing its key performance indicators—pulling every lever to bring down its cost per whatever matters.

They’d boast of running hundreds, if not thousands, of A/B tests to perfect their message or product.

They quickly try a different marketing tactic or sales channel if things aren't working. They pivot the entire business model or offering without hesitation if they aren't working.

Moving fast and breaking things is a startup religion, and it’s often celebrated as ruthlessly efficient compared to the plodding nature of legacy companies.

Eventually, most startups get there—to something resembling a viable business model—maybe even a fast-growing one. And they feel good about what they see as a disciplined, prudent process in getting there.

Yet, in most cases, the process costs a lot of time and money. There’s a reason it’s called a burn rate, after all.

And given the state of the economy right now, only some companies can tolerate this kind of undisciplined approach. It’s hard to see the always-pivoting startup being seen in the same light.

Blaze through trial periods

Proponents of?Lean AI ?ask – what if we could skip all that? What if a startup could ‘know’ its business model and operating costs immediately without hiring tons of people to figure all that out?

Just imagine if a VC could pick and choose which startups don’t need to pivot this way or that and don’t have to spend gobs of cash and loads of hiring.

Impossible, you might think. Some things require trial and error. Except that machines don’t.

We are seeing an emerging form of AI that can solve these problems. We’re not talking about massive, change-the-world AI (like robots that take over our jobs). We’ll get there someday.

For now, we’re talking about a lean form of AI that can be designed to help startups blaze through their trial periods.

Algos always wins. Founders can start running their companies with higher predictable odds of becoming the next tech startup unicorn.

Just imagine the great companies we’d discover. More importantly, envision how this could thrust technology, brands, and whole new industries in years, not decades.

At a time when people will be hungry for jobs and innovation, now is the perfect time for founders and VCs to embrace Lean AI .