Panem et Circenses: An Investment Thesis Inspired on Pagan Rome

Decimus Iūnius Iuvenālis must have had a full life. He was the poet who wrote the Satires, criticizing Rome by combining comedy and wit around 100 A.D. As a teenager, I read some of Juvenal’s work out of pure curiosity, enriching my premature codes of conduct with two expressions full of meaning:

  • mens sana in corpore sano: “You should pray for a healthy mind in a healthy body; Ask for a stout heart that has no fear of death (…) What I commend to you, you can give to yourself; For assuredly, the only road to a life of peace is virtue.”
  • panem et circenses: “Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People (…) anxiously hopes for just two things: bread and circuses”

The first has helped me follow a peaceful and righteous track for life. The second helped me understand the relationship of power, money, and the behaviour of the masses. But it was not until lately that I realized: panem et circenses can directly impact my investment decisions.

Here’s why.

First, some context.

A much deeper discussion is justifiable, but I’ll simplify to save time: when Juvenal was alive, the gladiator battles reached their peak, and any politician who sponsored a great spectacle would be reminded on coming elections. When those came, families received substantial grain portions from those who ran for Senate. Rome even tried to pass anti-corruption laws that refrained those tactics, but failed miserably. The common people no longer cared for history, politics, or heroism: they wanted food on the table, and some fun to forget the daily struggle.

What changed?

The average consumer, the one startups fight hard to conquer, is not very different today. Humans have not evolved too much, and most of our everyday decisions are unconsciously-biased and highly influenced by how quick arguments have been molded to win us. Believe me, there are hundreds of books about it 😉

Whenever I discuss a business model twist or analyze a new early-stage product, I think about panem et circenses and try to broaden its reach. This way, I can see how that startup will bring two sets of things to the user’s table:

  • Panem = food. Money. Complementary income. Goal achievement. Self-education. Food for thought.
  • Circenses = fun. The ability to bring fun to others. Sense of belonging. Self-deception. Happiness.

Those two lists go on and on, and I could write pages about those concepts. I’ll keep this post short and leave the interpretation to you, because it all boils down to this: if a startup is directly marketing and delivering at least one of those concepts properly, even if not explicitly, a further look is granted. It may be able to solve two pains we know are common to everyone.

Practice this on the next potential investments you face. Let me know how it works for you.

Preparing Startup Assets for a Future Exit

My last post allowed for some interesting discussions AFK. A particular one involved a roundtable of investors and entrepreneurs regarding three main topics:

1) who am I to propose a new definition for anything
2) what are the typical derisking practices any startup can use
3) how business assets and real options relate to startup strategy

I believe the latter deserves a deeper discussion, so writing this post helps me get rid of that burden.

Business Assets Can Be Planned from Scratch

Remember that time you were drafting your Business Model Canvas and felt kinda clueless when filling the “Key Activities” and “Key Resources” blocks? That’s you right there and then, still immature and unsure of what can be the most important assets of your early-stage startup.

The harder you think ahead those resources and activities, the better your view on what is really valuable for your business. The processes and resources that only your startup can develop and improve – really, only your startup – are not only the pillars of your business, but also the things that support your true value proposition. They are your most precious assets, and have to be polished until they are the very engine that differentiates your business from all others – then, scalability and repeatability may be only natural consequences.

Consider anything that may be of great value in a startup: a killer algorithm, a secured patent, an incredibly loyal group of early adopters, or a founding team who will create the next big thing. The end consumer sees only the consequence of that: the service provided by the startup. The key assets of a startup are useless if they haven’t been proven critical to materialize the business, whatever importance founders brag they have.

Invest time planning ahead for your startup’s most important business assets.

The Best Business Assets Become Real Options

Real options can be defined as the alternatives that bring management flexibility. The concept is not commonly found on the vocabulary of entrepreneurs, but is widely used in venture capital and private equity. When a startup consolidates a product, achieves tactical or strategical advances for its assets, or simply marks the territory with a positive market move, it may be buying flexibility to pursue new future directions for the business.

For early-stage startups, real options are like breadcrumbs you leave behind when you pivot: they are backtracking paths you can follow back if everything blows up on your next move. It is so because when you’re grasping towards validation, it’s very hard to see farther than your closest objectives – and they’re often more tactical than strategic. When you leave plan-Bs around, it’s much easier to secure previously abandoned directions that are now promising – compared to the disastrous pivot you just spent months on trying.

If handled carefully, an unsuccessful pivot may be pocketed and saved for a better time. And as startups mature, the planning for real options can help prioritize on where to pivot next.

Startups: A Remixed Definition

Startup acquisitions usually involve one strategic business asset or real option. The most common are:

  • Client portfolio, mostly in B2B startups and important to big enterprises that wish to expand to the longer tail of revenue profile.
  • User base, mostly in B2C startups that present an above-average user growth – an example is Whatsapp, that grew in 4 years what Facebook took almost 10 years to grow.
  • Growing revenues and/or profit, simply because it’s cheaper to buy now a startup that’s growing fast than after it has grown even more.
  • Geographical dominance, mostly when a global startup is expanding to a new country and it’s cheaper to acquire the local leader than to invest in a regional operation from scratch.
  • Patents or products that are technologically advanced and provide the buyer an open path to diversify, or to make a strong stand before competitors.
  • A killing team that may operate a new business unit and oxygenate a big company wishing to innovate.

If you’re a startup founder, analyze the assets that will become one of those exit motivations. If you’re an investor, forward this post to your invested founders. Remember: in the startup game, it’s all about strategy.

To close the post and reinforce the sentence you just read, I’d like to come out with a remixed definition of a startup, coined after a late night conversation:

Real startups are investment targets that develop and secure unique real options faster than my next raise

Can’t say I disagree.

Redefining a Startup: an Investor’s Perspective

A lot has been said about startups, and words of wisdom from countless experts, entrepreneurs, and investors have collectively built dogmas accepted worldwide. Steve Blank and Eric Ries are two consistent contributors of that knowledge body over the past decade, and their joint definition of a startup could be stated as this:


A startup is a temporary organization in search of a scalable and repeatable business model, designed to deliver new products or services under conditions of extreme uncertainty


Blank’s words before the comma, Ries’ right after. Beautifully complementary definitions, self-explanatory, and polished to perfection. But even so…

Interpretation is subjective

I’ve been approached by thousands of entrepreneurs looking for funding, and I’ve preached that same complete definition in response. Strangely, their typical reply to my gospell always denoted a lack of understanding on what exactly the terms on that definition really meant. This is why I always felt the need of a definition that tells them how to assess themselves as a true startup or not, and also to help them visualize startups their right path through investor lenses.

I’m not aspiring to pivot the original concept, just flip that definition coin to reveal what could be engraved on the other side. And this is what I came up with:

A startup is an organisation intended to derisk and maximize the value of business assets in record time

Let’s break down the key concepts.


Startups aren’t necessarily a formal company. On the other hand, we often find independent teams inside big companies working with a startup mindset. Therefore, organisations comprise groups of friends / researchers / professionals, recently incorporated businesses, teams inside big companies, using part-time or full-time schedules towards a common goal: create a startup together around the same product or service, either inside a company, as a spin-off, or as a formal company.


No matter how uncertain the product/market fit or how innovative the business model, investors have a bias towards lower risk and against extreme uncertainty. Hence, the best startups combine gradual decrease in risk probabilities with a consistent increase in potential returns. Great startups derisk their success over time, and the best way to do that is grow, grow, and grow… In addition, many risk factors can be detected, acted upon, and minimized with careful planning. Legal protection, patent applications, commercial partnership agreements, NDAs + non-compete signed with big competitors, letters of intention from potencial buyers, anything that can make sure a startup gets future revenue or has a safe harbor when / after launching.

Maximize the value

There is no purpose in a startup that doesn’t aim to increase its value, and that purpose is less rich and noble in proportion of how much waste a startup generates. When one stands for maximizing the value of something, it means to reach the utmost value one can achieve – and not accepting less. Founders who maximize the value of their startup assets stretch their bones in a daily fight to extract everything they can from their team, technology, management, and results.

Business assets

Any asset can be valuable in a startup, such as an innovative technology, a massive user base, a great founding team or a single approved patent. Even so, those assets are only attractive to investors and executives (as representatives of funds and enterprises) if they have a business application and provide competitive advantage to someone working the market – present or future. After all, if the startup’s business model proves not to be scalable and repeatable (or the management screws up), you can still liquidate those assets and get huge value in return…

That is a key aspect that armies of entrepreneurs forget or underestimate. Investors will only have their equity valued in 10x if founders are working hard to turn assets into business assets. Executives will only vouch for a startup that presents strategic features, technologies, customer base or teams that are usable in a turn-key fashion, or very close to turn-key. If startup S1 has less valuable assets than startup S2, but assets are more business-ready on the first, it may win the race.

Consider any kind of exit as a plan B, but as important as plan A: not ever needing an exit. Maximizing the value of business assets is mandatory on both scenarios.

Record time

Not much to explain here: a startup has to execute and grow as fast as it can, and much faster than its competitors. Be it swimming, racing, or whatever endeavor humans undertake to achieve greatness, record times are hardly broken (though some people struggle their whole lives to break those). It works the same for a startup: growing in record time means one is faster than all others.

Use it as a compass

How many entrepreneurs are able to fully abandon their biases, personal beliefs, and prejudices in favor of creating the best startup they can? Even though most startups are presented as potentially scalable and repeatable business models, that is frequently a premise and not a validation. In other words, entrepreneurs very often hammer their startup vision onto anything they see, because they believe they’re pursuing a scalable model – and not because it indeed is or will be. Unfortunately, Blank’s and Ries’ definitions allow that plausible mistake to happen and don’t hint on how to close that gap (not unless you look at all the methodologies / practices they’ve thoroughly described on their books and blogs).

My proposed definition serves as magnetic north to founders or corporate teams who wish to understand their potential return on investment. But most importantly – despite being funded or not, formal or informal – they can look at that compass, self-check if they’re off-course, and understand how much of a startup mindset they really have.

So if you’re running a startup, occasionally go through the checklist literally derived from the definition:

[    ] Are you actively working to derisk your startup?
[    ] Are you maximizing the value of your assets?
[    ] Are those assets business-oriented?
[    ] Are you doing all that as fast as you can?
[    ] Are you doing all that faster than similar startups?
[    ] Are all your actions, everyday, planned to answer “Yes” to all questions above?

Each negative answer to those questions screams “you’re not running a startup”. Are you? Then follow this recipe:

1. For every negative, ask the team “Why not?”
2. Write down the real reasons
3. Devise simple solutions to address each reason
4. Make it work.

I’ll tell you what: whenever your reason is “we don’t have enough money”, think of another reason. Every startup needs capital, but the best ones find alternatives that transpose those obstacles even without funding. And always remember… startups may not be your thing.

Getting it right, it’s like building a strategy SCRUM board. Believe me, it pays off and will make you a better founder everyday.