The process of taking large investments is widely different from making small ones.
Large Decisions
Most large decisions in life we take, we try to minimise the uncertainty, following textbook examples of taking decisions (All our knowledge about patterns, thinking, planning, education, process, execution, base rates, feedback, Overfitting, etc), we know the payoff is also large but could be significant loss making if we are heavily wrong. Example: Decisions like Marriage, starting a business with huge chunk of your capital , buying a home with a chunk of your savings, Finding an excellent business partner or mentor, building really close long term relationships.
Obviously luck still has the final call, still we can’t escape such decisions
(There is a 100% certainty few decisions are sure to be there is everyones life, they are bound to come)
This framework is very well applicable for decisions which are irreversible, have high cost in terms of money, risk, safety and are big for someone individually.
Small ones
While other kind of decisions we can take VC type approach least bothered about the probability only payoff’s, we experiment, take decisions without thinking & focus on actions . Someone hiring 10 employees vs 1 employee (Rory sutherland) will take very different approaches.
Arguments
Problem in most arguments is conflating the two. Remarkable thing is, high cost decision for someone it is low cost for someone else (risk doesn’t transfer equally). Like for a large company building flats (Over time they have experimented, iterated and have developed a lot of experience, conditional on they survive, etc), however for most people buying a flat it is a significant chunk of there savings. In that case, It makes sense most people go with a developer who has an excellent reputation and who has survived. While some investor, for whom one flat is like another part of his multiple flats he owns, may go with a newer developer or will be more flexible to experiment.
Most people are playing different games (Conflation is a terrible idea, yet very common).
Another one your Twitter persona could be remarkably different from your individual one in real life, considering if you think your relationships in real life are valuable. In fact Most people on twitter (Social media) are generally in the VC kind space (There are obviously exceptions)
Investing 5-10% of your capital in a company with is remarkably different from investing less than 1%, considering equal longer horizons.
Trading opportunistically for some income vs repeatedly with leverage is very different
Similarly, many paradoxes or tradeoffs arguments which happen in fact are not tradeoffs, they are different models being used for different situations, are useless arguments. The games being played are very different.
Exit Strategy 