For decades, the success of companies around the world was built on a foundation of “continuity, conservatism, and tradition” (p.19). In environments that were largely stable, the wisest strategy was to pursue “small, incremental, step-by-step innovation” (p.19). That approach made sense when markets evolved predictably and competitors moved at a measured pace.
Today, however, the context has shifted dramatically. With the pace of technological advancement accelerating and barriers between industries collapsing, no sector can be considered stable or insulated from disruption. As the authors emphasize, “there are long-term trends disrupting every sector” (p.269).
When Past Success Becomes a Liability
In this new reality, established companies face an inherent disadvantage: their own past success can become a liability. The same mindsets and practices that once fueled growth—careful planning, cautious risk-taking, and slow consensus-driven decision making—now act as brakes on innovation.
When opportunities arise, hesitation often means missing the moment. When experimental projects underperform, leaders may be reluctant to acknowledge failure and reallocate resources, causing the most promising initiatives to be underfunded. And when every project is pressured to deliver short-term financial results, truly transformative ideas are denied the long runway they need to mature. In effect, legacy ways of thinking can trap companies in cycles of incrementalism at precisely the moment when bold, decisive innovation is required.
Inside the Venture Mindset
The Venture Mindset “…teaches you to spot new opportunities, nurture the right talent, foster a culture of innovation, and take calculated risks in order to achieve extraordinary growth” (p.7). Ilya and Alex draw from their respective experiences—as the founder of the Venture Capital Initiative at the Stanford Graduate School of Business and as an innovation practitioner—to share the principles that venture capital funds use to de-risk investments in innovative startups. These principles reflect a radically different way of thinking about growth and risk than what most established corporations are accustomed to.
At the core of this mindset is a recognition that innovation cannot be managed through traditional corporate approaches to planning, budgeting, and risk management. Instead, venture capitalists operate within a framework where “failure is a must, due diligence is put on its head, dissent is encouraged, ideas are rejected in their myriads in search of a single winner, plugs are pulled, and time horizons are extended” (p.7). This may sound chaotic to corporate leaders steeped in continuity and control, but it is precisely this disciplined embrace of experimentation that has allowed venture-backed firms to become the engines of some of the world’s most valuable and transformative companies.
Nine Principles for Innovation
By rethinking what it means to take risks, venture capital funds have built systems that allow bold ideas to surface, be tested, and either scale quickly or fail fast. This disciplined openness to uncertainty has proven far more effective than incrementalism when navigating disruption. The authors argue that established organizations can and must borrow from this playbook if they want to remain relevant in a world defined by volatility and technological acceleration.
The venture mindset is built on nine principles that together reframe how to pursue innovation: make many small bets and treat failure as a source of learning; build diverse networks to uncover ideas in unlikely places; invest upfront to prepare the mind and test assumptions; create a large pipeline where most ideas are quickly rejected but the best are examined carefully; put people above process, backing resilient “jockeys” over perfect “horses”; promote disagreement to counteract herd thinking and surface contrarian insights; allow flexibility by staging commitments and pivoting when needed; reward value creation by growing the pie so all contributors share in the gains; and think long term, resisting short-term pressures in order to nurture transformative opportunities.
Failure to Innovate: Lessons from Xerox and HP
We see striking examples of how rigid mindsets can prevent companies from innovating, even when the opportunities are right in front of them. Xerox, itself a product of venture-style thinking in its early days, famously failed to capitalize on many of the groundbreaking inventions developed at its Palo Alto Research Center (PARC)—including the computer mouse and the graphical user interface. At the time, Xerox leadership dismissed these innovations as unrelated to their copier business, a narrow view that left the door open for others like Apple to commercialize them.
Similarly, Hewlett-Packard overlooked the potential of Steve Wozniak, failing to recognize him as a “jockey” of exceptional engineering talent. When he proposed the idea of a personal computer, HP declined to back him, missing out on what became one of the defining technologies of the modern age.
Success Through Bold Experimentation
By contrast, companies that embrace the venture mindset show a willingness to experiment, accept failure, and double down on what works. Netflix exemplifies this approach by greenlighting a wide range of shows and canceling those that do not resonate with audiences. Over time, this strategy has produced a steady stream of hits that keep the platform competitive.
Google and Amazon embody the same principle. Jeff Bezos captured it best after the failure of the Fire Phone: “You can’t, for one minute, feel bad about the Fire Phone. Promise me you won’t lose a minute of sleep” (p.53). In other words, each failure is simply the cost of uncovering the next success.
As The Venture Mindset reminds us, the process of disruption often unfolds in the way Ernest Hemingway described bankruptcy in The Sun Also Rises: “Two ways. Gradually and then suddenly” (p.269). Innovation often appears to creep along slowly—until, in an instant, the old order collapses, and those who failed to prepare are left behind.
This book reminds leaders that waiting for certainty is the surest path to irrelevance. To thrive in a world where every industry faces disruption, organizations must adopt the principles of the venture mindset—placing many small bets, fostering diverse networks, rewarding value creation, and thinking long term. The urgent call is to build cultures where failure is not feared but mined for insight, where talent is given priority over rigid process, and where bold experiments are encouraged. Those who commit to this way of thinking will not only survive the sudden shocks of change but will be positioned to lead the future.
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