Humility in Venture Capital

Those who've followed my blogs for a few years will know that humility has been a recurring theme. Ever since the high scores in Grade XII exams and the resultant media exposure catapulted me into a position of local prominence, I have struggled to balance my feeling of having 'achieved' with the need to remain humble. As reflected in this post from 2013, I tried to argue that humility is important for a process of continuous learning. Lack of humility, I ruminated, would cause me to filter out uncomfortable discussions and contrarian viewpoints. However, as my professional and personal journey increased, I realised that it was an inadequate behaviour. I came across several self-assured and rather aggressive people whose display of supreme confidence in themselves caught the attention of people around them. Those who were meek and reflective simply didn't seem to have the same gravitas. That's when I started distinguishing between internal and external humility and wrote about it in this post from 2015. The idea was simple - I exist in service of an idea and, sometimes, I would need to demonstrate external arrogance, so that my idea can propagate. However, internally I should always be humble so that the process of continuous learning doesn't stop. In 2016, at the cusp of beginning my journey in philanthropy and venture capital, an incident that I talk about in this blog made me think once more about the qualities that I really value, and humility came up on top again.

Which brings me to the point of this blog, i.e. my continuing reflections about humility. As a funder, especially one backed by the generosity of a single individual rather than just financial returns-oriented investors, it is very easy to get carried away. Even though every such organisation (including mine) has many checks-and-balances and, in any case, I'm at a junior level, such organisational details are mostly unknown to those I interact with. Therefore, the perceived power I have to determine what we fund creates a strange (and unsettling) power dynamic in many conversations I have. A colleague put it well recently - in every conversation, both you and the grantee know that there's a hammer on the table and you can use it any time you want. The key is how to have an honest conversation despite that. There is a lot of hubris in what is called 'the investor community'. For example, a relatively junior peer at another firm gloated that entrepreneurs would "such my c**k" for funding.

The problem with such hubris is that it is only illusionary. Our perceived power comes only from our membership of a particular organisation; that power is as fleeting as our membership of the organisation itself. Our membership itself may be due to several extraneous circumstances that we can barely take credit for. In my own case, my entry into Omidyar Network was because of an internship posting that a friend forwarded to me. There might have been many others, far more deserving of the job, who just didn't happen to see such postings. I happened to be in the right place at the right time - that's very little to gloat about!

Second, I continue to see entrepreneurs as people to look up to. It would be very easy for them to do what I do. In fact, many entrepreneurs I know started their careers in similar organisations as mine. However, I continue to believe that I can't do what they do. Therefore, if I believe that I can turn up at a meeting and tell an entrepreneur how she should be running her business, I'm only fooling myself. At best, I can serve as a knowledge agent, using my networks and wider view of the market to suggest ideas to her. If I really knew so much about what makes a successful start-up, shouldn't I be an entrepreneur myself? Any arrogance, therefore, is merely a delusion.

Finally, I go back to my earliest thoughts around filtering out different viewpoints. Much of investing is to get a grip on different sectors. That is particularly true in my situation because I'm working in a nascent sector where the 'template of success' has not yet been established. Therefore, I need to treat every conversation as a learning opportunity. For that to happen, I need to approach it with humility. Anything else would make me a partially blind investor at best and an unsuccessful one at work.

New Year's Resolution

I welcomed 2018 with a sky full of fireworks around Lake Pichola in Udaipur. Brightly lit palaces, loud Bollywood music, serene waters and celebrations – all blended together to create a surreal experience. My mind raced back to exactly a year back, when I was on a beach on Phuket, with thousands of revellers from across the world, looking at another set of fireworks. A new year is a time of many emotions, but one that stands out is hope. The hope of a new beginning, to be more precise. This hope often manifests itself as a new year’s resolution. Expectedly, the internet around this time is flooded with memes about new year’s resolutions that people make and then abandon within a few weeks.

Why such resolutions fail is understandable. Having studied economics, the analogy with the time inconsistency problem is obvious. No matter what I today commit to, in future I will react primarily  to the incentives that I face on that day. This is not to belittle human resolve, but a resolve that is opposed to incentives will be difficult to keep. Therefore, I believe that a new year’s resolution should meet a few criteria. Firstly, it should be something that one cares about deeply, on a daily basis. This will give confidence that future preferences are not very different from today’s. Second, one must actively think about ways to create incentives to naturally achieve the resolution. The more the disincentives, the harder adherence will become. Thirdly, it should be something intensely personal. A publicly-declared resolution which eventually fails can undermine one’s self-confidence. I believe that positive reinforcement is important to lead a good life.

This thinking around resolutions drew from my experience of the last year. While I was in Phuket, I had once again fallen ill and felt that I should lead a healthier lifestyle. This was not on a whim, but reflected years of sporadic exercising. When I came back to Bangalore, I began exercising twice a day, four or five days a week. I experimented with different exercise patterns, different gyms and different times till I found my rhythm. Even now, I keep changing the mix to keep things interesting. I began eating more healthy things. I brought back the morning cup of hot milk, drew from the fruit basket at work, added curd and generally reduced over-eating. I experimented with different foods in different ways, at different times of the day. It’s been a great learning experience about continuous improvement. I don’t know if all of this has resulted in better physical outcomes, but I feel that I’m in a much better place mentally. I also feel quite proud to have kept a resolution.

I look forward to making a new resolution for 2018 and trying to keep it. I look forward to a year of experimentation and getting to know myself better. I’m quite full of hope and raring to go!