You're Holding Yourself Back and Don't Even Know It, SVB Collapse and Venture Markets
What a wild quarter it has been!
Between the Silicon Valley Bank collapse (and now First Republic Bank on the edge , with the stock now down 95% for the year to date!), ChatGPT taking over and the further fragmentation of our world with US-China tensions increasing, it’s been a lot.
Yet, I’ve been encouraged by a recent read about Jeff Bezos’ approach that I’m implementing to balance out the constant that is change:
“Focus on what DOESN’T change”
Jeff Bezos, known for his long-term value focus once said, “I very frequently get asked about what’s going to change in the next ten years, and almost never – what’s not going to change”.
For Amazon, Jeff identified what won’t change in his customers’ demands to be the following:
more selection, at speed.
And he’s been focused on doing just that, for the last two decades in building out among others, Prime and the selections offered on Amazon.
Innovation comes from changing trends but long-lasting products and businesses come from capitalizing on what doesn’t change.
So while we’re all jumping on the bandwagon of AI, let us not forget our core that keeps us grounded. That brings me to some of my favorite hits from the last quarter:
(1) ARE YOU A BUSINESS LEADER IN DENIAL?
Why is it that some leaders see an obvious, big scary thing coming at them and deal with it, but too many of them don’t?
With Global Best-Selling Author and risk expert, Michele Wucker who coined the term “The Gray Rhino”, we discussed the Silicon Valley Bank debacle and after-effects, the power of stereotype threat mislabelling women to be ‘risk averse’, and how leaders should be thinking about yikes, risk.
3 key takeaways:
1. A shift from “identifying” to “mitigating” risk is necessary
Traditional risk management focuses on identification, ticking a box exercise, when what’s more important is response. Who is accountable for each response item, and how is mitigation measured? Are your risks mis-priced with the ever-changing market?
2. The Black Swan theory vs. The Gray Rhino
“Unprecedented” is too easy a cop out. Too many leaders abuse the Black Swan theory (as popularized by Nicholas Nassim Taleb) to explain in fact, many circumstances that should be expected caused by negligence or denial. Nicholas himself has said that the pandemic was not a Black Swan event, and just like the unravelling of Silicon Valley Bank, there were tons of “Gray Rhinos”, obvious risks that were not addressed.
3. No, board diversity did not kill Silicon Valley Bank
The much maligned article below has certainly been put to task. Michele’s view? “That’s crazy. Research shows you that diverse decision-making groups do a better job. Having a good balance of risk attitudes, risk tolerances, risk fingerprints i.e. the background that you bring to making those decisions is important. The more diversity you have, the more likely you are to be able to have a good structured debate that helps you to reach the right decisions. But what’s important to ask is of course; how are these conversations structured? How is decision-making made, and is there accountability?”
Tune in on Spotify , Youtube , or our Episode Page .
(2) YOU’RE HOLDING YOURSELF BACK FROM YOUR OWN POTENTIAL
A ping on your phone takes you out of a conversation with a friend. At the office, a colleague interrupts your work on a project. At home, screens intrude on time with your partner.
Your goals don’t get done and it feels like someone (or something) is constantly pulling you away from what you really want to do.
Why does it seem we’re no longer in control of our attention or our lives?
How different would your life be if you were “indistractable”?
Hint: according to Investor and Best-Selling Author, Nir Eyal, we need to start looking within as to the discomfort we’re escaping with our distractions, and yes, do away with ‘To-do’ lists!
Tune in to this episode on Spotify , Youtube , our Episode page .
(3) ON VENTURE MARKETS
Yes, there’s been a “SAAS-cre”, where valuations of Software-As-A-Service companies have taken a dive, for some, as high as 60%. The froth of 2021 and yes, late into 2022 is now being corrected, but has been rough for many startups.
“It was pretty certain that if founders hit their milestones, they’d be able to raise their next round. Now we’re not counting on that. We’re saying, think of this as your last check, and build your runway,” —Jenny Fielding, Founding Partner of early-stage VC, Everywhere Ventures (formerly The Fund)
Some key observations on how she thinks outliers can stand out:
1. Discipline matters now
Manage those burn-rates. While as of April ‘23, valuation compressions not seen in the early stages (pre-seed, seed), some rounds are taking longer to close. Stay lean and focus on the core milestones that will take you to the next level.
2. Be forward-thinking
When I asked Jenny about her 100x investment outliers like Headway backed by Andreessen Horowitz, now reportedly valued at $1Bn, this is what she had to say “These founders have a view of the world that may not yet exist. They’re looking at where things are going, not where they are”.
3. You’re already resilient: make it your superpower
Jenny adds how so many of her great founders do not come from a “cookie-cutter” life. In fact, many of them had a rough life and did not have the privilege to attend the likes of Harvard or Stanford. That creates drive and resilience. In fact NFAP’s 2022 analysis has shown that immigrant founders have created 55% of American unicorns! The immigrant hustle is so real.
And a bonus message for investors: This is a great time to invest if you’re not a market timer. There will be a shake-out, but this is the time to also get in early for the billion-dollar opportunities. This is the time to make sure founders are adequately funded.
Tune in on Spotify or our Episode Page .
ON THAT NOTE, A SPECIAL OPPORTUNITY FOR YOU!
Join me IRL in Austin, because yes, I’m still bullish on investing into female founders, and the next generation funds that invest in them.
As part of my firm, Beyond The Billion’s partnership with Brown Advisory, together with American fashion and jewelry designer Kendra Scott, we’ll be hosting an intimate LP-GP Gathering. Roundtable for funders only, panel open otherwise. Hit reply— few slots left!
Have a great rest of your week, I appreciate you being part of my inner circle.
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