Thursday, July 19, 2007

Three Sealed Envelopes

BVP Operating Partner Christopher Risley recently had to relocate 3,000 miles for family reasons, forcing him to resign a CEO position and leave the company in the hands of its very capable President. Chris jokingly tells that (in the spirit of psychohistorian Hari Seldon of Asimov's Foundation) he left his successor three sealed envelopes to open each time he found himself at a complete loss as to what to do.

In the first envelope, the note reads, "Blame me."

In the second envelope: "Cut your burn and re-structure."

In the third envelope: "Prepare three envelopes."

(Before anyone cries plagiarism: Chris did disclose that it's an old joke.)

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  1. Anonymous4:06 AM

    Although David's version of my story is probably better advice it's not as crisp a joke. In the three envelopes I gave Tom were the following 6 words:

    In envelope #1: Blame me

    In envelope #2: Reorganize

    In envelope #3: Prepare 3 envelopes

    David's advice in envelope #2 to "cut your burn and restructure" Is just naturally the way a Venture Capitalist would remember it. :)

    BTW, Google found 384 citations for the intersection of "Three Envelopes" and "Blame me" but none cited a source. I have this vague memory it was Henny Youngman but I can't prove it. Anybody else know with certainty?

  2. I wouldn't necessarily call this a joke. I'd rather call it an aphorism or sententia.

    A two envelop-version was used in the motion picture Traffic (2000) as the new head of the US's war against drugs takes the office of his predecessor. According to that scene, the origin was Nikita Khrushchev telling it to Leonid Brezhnev. Latter being a protégé of and eventually replacing former as the Secretary of the Communist Party of the Soviet Union in 1964.

    As I first met the three enveloped version - extended with the re-structuring step - I thought it is an update better suited for our times.

  3. Anonymous8:17 AM

    A two envelope version of this story is also told about Baseball Managers... particularly Billy Martin and Yogi Berra, but it would certainly fit in almost any baseball or sports situation as well.

  4. Anonymous9:12 PM

    This company has gone through many # 2 envelops in the past. The capable President / CEO that both Cowan and Risley spoke about before, and kept him for 5 years was clearly incapable to many great employees well before Cowan and Risley discovered his inabilities, 5 years later! Yet, he used the # 2 envelop whenever he was about to be exposed. Many great employees left because of such #2 envelope in the wrong hands. Those who believe in the # 2 envelope of "restructuring and reorganizing" must have their head examined; that's exactly why a 10 year old company remains a "startup"! One achieves investment success by design and wisdom, while others achieve it by pure luck and surviving at all costs!!