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Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

When Patrick Collison, CEO of electronic payments company Stripe, helped kick off our second-year strategy course at the Stanford Graduate School of Business this year, he observed that this has created one of the most profound differences in decision criteria between leaders in industrial-era and internet-era companies. So is Facebook.

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Shape Strategy With Simple Rules, Not Complex Frameworks

Harvard Business Review

Successful companies shape their high-level strategies by relying not on complicated frameworks but on simple rules of thumb. It illustrates how simple rules can help companies shape strategy in an uncertain environment. Strategies often falter in execution because of insufficient coordination across the organization.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Traditional companies therefore rely on two strategies. Both strategies, however, create cultural incompatibility within the organization.

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Why Is an App Worth as Much as a Small Oil Field?

Harvard Business Review

While on the surface, the dirty business of fossil fuels is nothing like Silicon Valley, many in the oil business have moved beyond the standard net present value (NPV) model for assessing the merit of investments. Mergers & Acquisitions Strategy Tech industry' Where would you drill if you had money to spare?

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Only the CEO Can Make the Big Bets

Harvard Business Review

And using net-present-value estimates for "beginning" ideas is nuts. Because they know they would get laughed out of the room if they were to advocate for a hunch. Skating to where the puck is now is not being customer-driven. It's being customer-reactive. And yet we continue to do the same thing and expect different results.

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How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business Review

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. After all, if you’re trying to sell a product or strategy, you need to be able to demonstrate that it is both practical and high margin. The Refresher: Net Present Value.

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In a survey of 79 PE firms managing more than $750 billion in capital, we provide granular information on PE managers’ practices and how firms’ strategies relate to the characteristics of their founders. In particular, no paper examines detailed levers of value creation across financial, governance, and operational engineering.

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