Turning right and investor bias
When I first moved to New York I’d literally walk into people on the streets. In South Africa, we drive on the left-hand side of the road, so when walking and somebody else walks towards you, you both step slightly to the left in order to avoid each other. This happens unconsciously and instantly.
In New York, people step to the right. So there I am, new to the city, stepping left while others are stepping right and causing human traffic jams wherever I go. New Yorkers lived up to their reputation in voicing their frustration that I had resulted in a momentarily lapse of them having to acknowledge another persons existence. For a while, I had to consciously remind myself “right is right” whenever someone approached so as to step correctly.
Today, I happily walk around the city as a fellow New Yorker, oblivious to other people’s existence, sipping on a matcha and texting. Avoiding human crashes like a pro.
I think of this experience often when I’m sitting down with founders to hear about their startups. What unconscious biases am I filtering this conversation with? What assumptions am I making about the person that is sitting in front of me based on how they look, their gender, race or age? What about their market? Or approach?
This happened to me yesterday when sitting in on a pitch. In less than 3 minutes of listening, I thought to myself “I do not like this” and my mind wanted to shutoff, stop listening to the pitch and do something else. It was then that I remembered “right is right” and was able to become more aware of my thoughts and what biases are being triggered so as to make such a quick assessment and potentially write off a founder and their startup. By the end of the meeting I was still unsure about the founder but was intrigued enough to want to meet with them again.
In investing, ideas and founders that fit nicely into boxes and conventions are most often not the ones that result in breakaway success. Sleeping on other people’s beds (AirBnb) never sounded like a good idea to most and neither did an open source, distributed, peer-to-peer form of money (Bitcoin).
That’s what makes betting on the future so tough. You have to suspend your disbelief using limited data to go on, and be aware of your own biases (positive or negative) in interpreting that data before making each investment decision. It’s uncomfortable yet rewarding at the same time.
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