www.altMBA.com

1. Ignoring Sunk Costs
The Art of Looking Forward….Not Behind

2. Sunk-costs are costs that cannot be
recovered once they have been incurred.

3. “I can’t stop now,
otherwise what I’ve
invested so far will be lost.”

4. This is true, of course, but
irrelevant to whether one
should continue to invest in
the project.

5. Prospect Theory
• States that people are inherently loss averse
• People weigh losses twice as much as heavily as gains

6. …a loss of $1 is twice as painful
as a gain of $1

7. the combination of a non-neutral
reference point and loss aversion
is what leads to irrational behavior

8. Poker
you bet on your hand as it exists at the
moment (and its potential for the future).

9. Many people will stay in because
they’re “pot committed” --- they figure
they’ve already risked so much to be in
the game that it can’t hurt to bet a little
more.

10. Stock Market
holding on tight to bought shares as the
market slumps in the desperate hope that
the shares will rise in price again.

11. President Bush staying the course in Iraq

12. “A current withdrawal
would dishonor the
memory of those who
have made the
ultimate sacrifice for
the sake of liberty.”

13. • How We Are Dealing With Sunk Costs

14. Our Story
• Last year, I started a company called Figure2 Management . I’ve had 10
years experience working in the music industry…. managing artists, video
production, event production, and promotion.
• Figure2 was created as a full-service music marketing agency specializing
in using big data to connect artist with opportunities.
• We believe that data has the potential to not only make up for the revenue
lost from physical sales, but it can actually surpass it.Our theory is that by
using data created through streaming services such as Spotify, TIDAL,
Pandora, etc...you can determine how an artist should tour and leverage a
much larger, data-driven digital advertising market and create opportunities
for collaborative marketing and mobile engagement for brands.
• My first project has been to
develop the hip hop artist, Derek Davis, aka Drizzy D.R.O.

18. The Change Agent
• This past week, we were able to connect with the mobile
hardware developer OnePlus through a video contest they
held through their online forum which boasts 600,000 users.
• Drizzy made it to the finals but was not chosen Earlier this
year, we were able to raise $25,000 in investment capital.
• We signed the artist to a 25% management contract.
• A portion of the investment money has gone towards
photography, video production, relocation costs, publicity &
marketing, lawyers fees, app development, and studio time,
which has exceeded $14,000.

21. The Dilemma
• We have other artists on our roster that could
generate revenue through touring and record
sales, but none of them have the innovative story
like The Press/Play Hotline. Our challenge is
making the decision to continue forward with
Derek as our primary artists or move our focus to
less innovative acts with more revenue
generating potential.

23. The Decision
• We have an app in development that will help
the artists establish lasting and meaningful
relationships with his fans, communicate with
them around the web, and hopefully sell far
higher-value products in return.