When the Tide Goes Out You See Who’s Swimming Naked

Each month, “Ammirati on Innovation” episodes will look at ways
that the disruptive-startup mentality is spreading beyond young
entrepreneurs to big established corporations. Serial
entrepreneur, venture capitalist and Carnegie Mellon B-school
professor Sean Ammirati, who sits at the intersection of these
high-change dynamics, provides insight.


Episode 11


In this episode, Sean says he hasn’t been on a plane for almost
four weeks – and that’s unusual because he is always on a plane
to somewhere. So he has been able to have dinner with his wife
and kids, and it’s been incredible. He says it puts life in
perspective, and that’s the most important thing.


Sean says that his roughly 30 companies are negatively impacted
by COVID-19 – but he says that’s secondary to health and safety.
He says everyone is working from home.


Sean says he authored a book called “The Science of Growth,”
where he looked at pairs of companies and asked, why did one
company take off and the other one didn’t. Why is a third of the
internet running on top of WordPress? Why are people driving
Teslas and not Fiskars? Why do people have a Facebook account and
not a Friendster account?


Sean says he wouldn’t want to be in the hospitality business
today – or the travel business. He quotes Warren Buffett as
saying, “Only when the tide goes out do you discover who’s been
swimming naked.” Sean says he typically uses that in board
meetings when it feels like companies are swimming to close to
the knife’s edge. He says it’s true of a global company, and it’s
also true inside a 10 person company. He says he’s pretty proud
that his portfolio companies are doing a pretty good job of
making sure that they’re doing the right thing.


Sean says what some companies are doing over the last five years
in terms of share buybacks to inflate their stock. He says there
are companies who had really good offers to raise money three
months ago and held out to try to get a 5% higher valuation.









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