When sir Isaac Newton published his Principia in 1687 he defined laws of motion and gravity that described a world that was wonderfully predictable. Every action had a reaction, the motion of every body, regardless of size, could be accurately predicted if one knew its mass, position, velocity (speed and direction) and the forces exerted upon it. But, unfortunately, Max Planck, followed by Einstein, Heisenberg and a host of others ruined the clarity by introducing us to the field of quantum mechanics in which nothing was certain anymore. Everything became related to probabilities.

We live in a world that is driven by probability. We know that at any moment, an asteroid could descend from the heavens and terminate our humble existence as it did the dinosaurs, but yet, we rest in the comfort of knowing that the probability is so low that we might as well get out of bed and go to work. It's not the certainty that comforts us, it's the probability.

My observations about business are the same. Think of me as the Heisenberg of business, certain that it's not about certainty, but rather about probability that we must be concerned.

For many years, in my courses on entrepreneurship, I have taught my belief that a business plan is a waste of time for a startup, there's simply too much that you don't yet know, to bother with a detailed plan of your future and there are much better ways of spending your time, namely, talking to customers. In essence, what I am teaching is that when your company is tiny, the probability distribution of potential outcomes for any given action is so broad that it's impossible to forecast what will eventually happen.

And, this is where venture capital comes into my story. When startups raise capital, with a business plan, they are attempting to predict a future that they cannot know. But, if funded, they have essentially made deal that is based upon those predictions. From the venture capitalists' perspective, none of this would be a problem since many already understand this, and most don't bother reading the plans anyway. But the problem that I observe is not with the investor, but rather with the entrepreneur that took the investment.

My observation is that the entrepreneur often feels bound to the plan that was used to secure the deal. And as such, often makes bad business decisions, for example, attempting to force growth ahead of the market, which frequently burns cash and leads to an unfortunate need for additional capital, and we all know how that story ends.

So, the lesson is simple. If you're lucky enough to fund your startup, then once you put the cash in the bank, you need to pay more attention to your current reality than to your prior commitments. Your investors will actually praise you for achieving cash flow neutrality sooner, as opposed to hitting some arbitrary sales target while depleting your cash. Forget about the deal, and focus on running your business like a business - where profit and cash are kings.