Milkrun and the monday morning quarterbacks

I’ve seen so many ‘monday morning quarterbacks’ chiming in, to say they always knew Milkrun would fail. But here’s the thing: when you say you knew it’d never work, nobody in venture capital cares.

Venture capital doesn’t get to invest without significant risk. That’s what the “venture” bit of the name means.

If the unit economics of the startup are still largely a hypothesis, it’s venture capital. When there’s actual data, it’s not venture capital, it’s just capital, and you should go to the bank for a business loan.

Of course it seemed unlikely that Milkrun would ever work, and yet VCs invested anyway. That’s because VC is not about ruling out ideas on the grounds that they’ll probably fail.

The job of a VC firm is to choose the team which is most likely to succeed — despite the terrible odds — because of the huge potential returns if it DOES work.

Do you think AirBnB looked like a great idea likely to succeed in the first few years? Uber? Atlassian? Canva? CultureAmp? SafetyCulture? UpGuard? Bugcrowd?

Big ideas are never likely to work.

Until they do.

I didn’t invest in Milkrun, because I wasn’t presented with the opportunity, and I haven’t seen the investment docs. But I have a lot of respect for the people at the VC funds who backed Milkrun and I’m confident in their ability to understand the unit economics of a business.

Milkrun didn’t fail because nobody saw it coming, it failed because it chased an audacious goal, as hard and as fast as it could.