The 60/30/10 Bet Filter
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 7
- Confidence
- —
As a venture partner, Caspar Lee uses a weighting to judge why businesses succeed: roughly 60 percent is being in the right market, 30 percent is the team, and only 10 percent is the unique idea. The consequence is that obsessing over a perfect idea is misallocated effort, because you cannot predict the future. He pairs this with a poker-style separation of decision quality from outcome: successful people are showered with credit for what may have been bad decisions that met a good market, and the aim is not to perfect each decision but to make many, be right 60 to 70 percent of the time, and keep moving. Ship before it is perfect, and meet far more people than you will ever transact with.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Weigh the market first
Before anything else, ask whether this is the right market at the right time, because Caspar puts roughly 60 percent of the outcome there. Timing and market pull do more work than founders like to admit.
Watch out Retrospective success stories almost never credit the market. He notes that successful people hand out advice as if their decisions caused the result.
- 2
Judge the team second
Around 30 percent sits with the people. In his own ventures the test is whether the operators are genuinely passionate about what they are doing and whether they are better than him at their part.
Pro tip Ask what unique thing each side brings. He describes a good partnership as both people being able to say the venture does not exist without the other.
- 3
Discount the idea to roughly 10 percent
Treat uniqueness of concept as the smallest input. Caspar's objection is to the standard advice of thinking until you arrive at the perfect idea, since nobody can predict the future.
Watch out Do not read this as ideas being worthless, only as being badly over-weighted relative to market and team.
- 4
Release before it is perfect
Apply the same weighting to your own launches: do not try to make the thing perfect before it goes out, because that is not going to work. He applies it to startups and, in the conversation, to over-engineering a video hook.
Pro tip If you are stuck perfecting the opening, film the thing and speak from the heart instead.
- 5
Aim for a 60 to 70 percent hit rate
The goal is not to be right every time but to make decisions and be right most of the time, which is enough to keep you moving in the right direction while you make mistakes along the way.
Watch out Expect real losses. He accepts that mistakes are part of the model rather than a sign the model is wrong.
- 6
Separate the decision from the outcome
Judge choices on the information you had at the time, not the result. He uses the poker player who is happy about being bluffed off a hand, because a player who can never be bluffed will call people who genuinely have the better hand.
Pro tip When someone credits a founder's genius, ask whether the market or the timing did the work.
- 7
Increase the number of shots you take
Meet far more people than you can transact with. His fund invests in around one percent of the deals it looks at, but still tries to meet as many entrepreneurs as possible so both sides learn something.
Pro tip Rejections are the countable input. He cites sales training where the target is 99 rejections and people quit early because the yeses arrive first.
In the wild
Caspar started being offered investments because founders wanted a creator on their cap table. Not knowing what a good venture deal looked like, he ran them past Sasha Kaletsky, then at Harvard Business School, who rejected most and asked to co-invest in the good ones. Sasha realised founders would take creator money over generic money, so they assembled a collective of YouTubers, musicians and actors and invested in around seven companies. One of them, the gaming platform Faceit, eventually merged and sold in a 1.5 billion dollar deal that returned everything the group had put in across all seven.
→ A single position returned the entire portfolio, and the track record seeded a 20 million dollar fund against a 10 million target.
Discussing why perfect decisions are the wrong target, Ali raises the marketing principle that a share of campaigns are meant to fail, because if none of them do you are not being innovative. Caspar agrees this is exactly the point, and Ali immediately applies it to himself: earlier that day he had failed to film a video because he was overthinking how to perfect the hook, when he should have shot it and spoken from the heart.
→ The stalled video is a direct cost of optimising for a perfect decision instead of a high decision count.
Common mistakes
Hunting for the perfect idea
Idea quality is roughly 10 percent of the outcome, so time spent searching for a unique concept is mostly wasted against time spent on the market and the team. You cannot predict the future well enough for the search to pay.
Copying advice from successful people
People who win are rewarded as geniuses even when their decisions were poor and the market carried them. Take their advice as one data point, not causation.
Expecting a rule for when to quit
Caspar refuses to give a general quit-or-persist rule, since quitting might be the best thing you ever do and so might not quitting. Each situation has to be analysed on its own rather than resolved by borrowed advice.
From the transcript
“a successful business is 60 the right Market 30 the team and 10 like the unique idea but everyone's like just think come up with…”
“the answer is not to try and perfect every decision it's just to make decisions and even if they write 60 or 70 of the…”
“don't try and make it perfect before you release it”
From the episode
Caspar Lee: How He Built A 10+ Million YouTube Following In His 20s (And Why He Quit)
Caspar Lee