Getting a venture investment right is a lot of fun BUT I’m not convinced that you learn much from it, so it doesn’t do much to make you right again (other than maybe your personal brand) In my experience, you learn more from two other experiences First: having high conviction and being wrong When you’re convinced in your gut that a company is going to succeed, a failure will kind of rock your world Your “what happened?” Post-mortem will force a re-evaluation of your mental model on what is present in a future success Oftentimes there are important factors underweighted (or not present at all) in that model — for us, we’ve learned the importance of gross margin and repeat purchase the hard way, and now they’re paramount to our new opportunity evaluation Second: seeing other great investors be wrong There’s a great Howard marks quote I love: “you’ll never able to be right and alone unless you’re willing to be wrong and alone” — easy in theory, but in practice this is an emotional grind In 2018 when we signed our term sheet to lead the Liquid IV round, I called every early stage investor that I knew asking them to join the deal. These were the investors I looked up to, who I wanted to be like — much more experienced and in most cases better investors than I was. Every single one passed, on what would end up being over 10x in under 3 years If I hadn’t already signed the term sheet and committed to doing the deal, it would have been incredibly challenging not to walk away — after all, these people are so smart and must have known something I didn’t That experience of seeing these other investors be wrong showed that they are human, and gave me permission (emotionally) to disagree with the pack Being wrong yourself, or even disagreeing with the pack, can be painful and uncomfortable, but these experiences are ultimately the only way we grow
Learning from failures and unexpected outcomes is crucial for growth and development in the venture investment world. Embracing being wrong, whether in our own convictions or in contrast to renowned investors, can be a valuable teacher. It's the resilience and lessons from these experiences that shape our future successes. 🌟
The only real return is alpha! Hard to have differentiated returns/outcomes without differentiated perspectives or approaches. I sometimes view a healthy dose of fear from being contrarian as positive signal for some moves. Buying bitcoin at $5k at the start of the pandemic was a great example - basically no external signal saying to do it, but my desire to own the asset hadn't changed
Social influence is such a huge part of investing/fundraising. So much to navigate emotionally in those trenches, especially in the early stage when there are less data points, or when you’re looking at something innovative and highly different from what has been before.
Love this! Great insights you only learn from just getting in the trenches.
Great post Kiva Dickinson “ for us, we’ve learned the importance of gross margin and repeat purchase” 💯
awesome insight
It's true about most of life - you don't learn from success.
Love these thoughts Kiva Dickinson. Keep them coming
Great perspective!
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1moGreat points. If you’re a Howard Marks fan, I’ve had a couple of fun conversations with him: https://youtu.be/VF56c5jyGy4?si=Sj9XDXBH2JYLmD3R And https://youtu.be/BlmiqdZ7huM?si=DjdSCpHU9CXNj8ZN