Risk, uncertainty and profit
by Frank H. Knight · first published 1921
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3recommended by
6HN commenters
2009–2026first – last mentioned
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…event this is all a flimsy normative sentiment. Beauty standards are determined first societally, then by entrepreneurs. The profit motive is intrinsic to a world of uncertainty (see Frank H. Knight's Risk, Uncertainty and Profit). It is wholly neutral. There is nothing wrong with pursuing profits, even though a lot of people have an anti-capitalist bias and are convinced it's demonic. I mostly agree, except in the sense that…
on “How bad are things?” ↗…boardgames is risk and there's also the category of uncertainty which you can't manage (because you don't know the probability distribution or the fact that something is possible/could happen at all). See "Risk, Uncertainty, and Profit" by Frank Knight for a much better explanation of risk vs. uncertainty than what I can muster. I think it's noteworthy that entrepreneurship theory from economics tends to be build around the idea that…
on “Don’t Tell Your Friends They’re Lucky” ↗Most of the books I read are from authors long dead (current one: Risk, Uncertainty, and Profit, by Frank H. Knight, highly recommended). They don't need the money.
on “How I bypassed Amazon's Kindle web DRM” ↗…wrote the 1980s VC post] When I think about building entirely new markets, I don't think the risk is the quantifiable risk that you're thinking of. It's what Frank Knight called "uncertainty" (Knight, "Risk, Uncertainty and Profit", http://www.econlib.org/library/Knight/knRUP.html). I prefer to call it "unknowability", but the concept is the same. The unknowability of new markets is what makes them so valuable. If it were just…
on “VC investment vs. Gartner hype cycle” ↗…like the Peter Drucker quote about it. “The only thing we know about the future is that it will surprise us.” — Peter Drucker and, “The future is fundamentally different from the past.” — Frank Knight, Risk, Uncertainty and Profit (1921)
…to systematically eliminate risk, therefore it is highly valued as a source of stability for most companies who deal with financial instruments. Knight has some thoughts on systematic risk in his book Risk, Uncertainty and Profit.
on “The Most Expensive Place To Put A Computer” ↗