In this episode, Isaak and Bruno tackle a more analytical question: how do you stress-test a business plan? How do you estimate the uncertainty within it? How do you avoid “stacking assumptions”? How do you stay abreast of changes that happen while you’re developing your business case or even after you’ve “pulled the trigger” on key decisions based on what a previous version of the business case suggested?

Bruno and Isaak, two engineers with a business-minded approach, discuss the complexities of innovation and modeling in entrepreneurship. They stress the importance of developing models that are detailed yet not overly complicated, emphasizing the need to test assumptions and reduce uncertainty. The conversation highlights the risks of over-intellectualizing complex systems and using powerful simulation methods without a deep understanding of underlying distributions. Isaak notes that assuming unknown distributions is better than pretending to know them, and that iterative design and modeling can help reduce uncertainty. The hosts also touch on the topic of business planning, suggesting that the fixation with the plan is often the problem, rather than the lack of a plan itself. They encourage entrepreneurs to focus on understanding relationships between elements, such as revenue formulas, and to use simulations like Monte Carlo methods to stress-test models. Isaak emphasizes the importance of having difficult conversations and iterating through design and modeling to reduce uncertainty. The conversation concludes with a discussion on prioritizing main physics over refinements, focusing on the big picture rather than getting bogged down in details.

See also the blog post with tips for market-size estimation modeling .