Mike has a good post that offers a bit of a history lesson on the late 90’s venture funding frenzy and how that drove absurd decisions.  In my brief stint at CMGI, I also experience first-hand some of the nonsense that Mike refers to.  He notes that some entrepreneurs who went through that period have battle scars that make them too timid to now, at a point when funding sources are back and start-ups can again take changes in the hopes that they can change the world.

The analysis is interesting and no doubt accurate, but I’m a big fan of experience and perspective.  I think that really smart entrepreneurs can see what worked and what didn’t last time — what made sense and what, in retrospect, didn’t make any sense at all.  Making smart, hard, risky decisions is what entrepreneurs do all the time, whether they’re trying to establish trust funds for their great grandkids or just trying to make payroll.  Sometimes it works, sometimes it doesn’t, but being confident enough to make them at all is what counts.

One nugget from Mike:

“Taking risks doesn’t mean raising more money than you realistically need. It doesn’t mean hiring 20 people to do what 4 can do just fine. And it certainly doesn’t mean taking massive losses in exchange for a small amount of revenue.”

Too true.  Run lean.