2010 was a big year. Witnessing my kids’ meteoric growth. Coaching lots and lots of baseball games. Raising a venture fund. Building a terrific team. Creating a portfolio – and a partnership – with more than a dozen great founders and teams. Cementing my transition from Wall Street guy to angel investor to venture capitalist. Making lots of great new friends and acquaintances. Reaching four-and-a half decades on this earth. A year of growth and achievement in many important ways. However, such progress also lays bare the work still to be done both personally and professionally, and I enter 2011 with a long list of to-dos.
Notwithstanding my “successful” year, I have done more than my share of stupid things. If you’re going to play the game and take risk, on occasion you’re going to get burned. This transcends the cold-hearted analysis of investment returns; I’m talking about strategy, tactics and execution, and myriad aspects of interpersonal communication. Mistakes were made. Lessons were learned. At 45 I often feel as if I have as much to learn as my 13 and 10 year old boys. The older I get the more humble I become. The sheer cockiness of youth has long worn off and reality has set in. And the fact is, damn, being right in everything I do more often than not is really, really hard. I guess that’s why batting .300 is considered great.
As I enter 2011, here are a few areas – both personally and in business – I’m going to be focusing on :
Brutal honesty. I’m a little bit of an anomaly in that I both dig the quantitative disciplines yet really like soft people-stuff. However, as much I focus on this I still can be so much better. Clarity. Transparency. Brutal honesty. Forcing myself to have the difficult conversations upfront and not waiting for a “better” time. There seldom are better times than the present. Brutal honesty can be hard and painful to deliver, but in the end it is generally best for all parties. But man, it is hard. Just gotta do it.
Better expectations management. Establishing relationships with potential partners needs to evolve over time and be done in thoughtful, deliberate manner. I have seen myself get caught up in the excitement around an idea and let passion outstrip due diligence and process. While there is a fine line between thoughtfulness and decision paralysis, I certainly never suffer from the latter. I simply need to take a deep breath, harness my enthusiasm and do what I need to do to make a thoughtful, fully processed decision. If I lose the occasional deal due to thoughtfulness, that’s ok. Better to take the time (or, invest in lines, not dots, in Susterian parlance) and feel great about it than to be too quick and feel out of control.
Continued investment in the ecosystem. Though IA Ventures is less than a year old, we have spent a bunch of time investing in the Big Data ecosystem. Fact is, we have to do much, much more. This will be one of my key personal goals for 2011. Teaching more. Spending more time on college campuses and at Meetups. Writing more on domain-specific topics. While we have a focus on data-intensive technologies and applications, we are huge supporters of entrepreneurship and the early-stage ecosystem in general. We need to continue to invest in young people with boundless energy, fresh ideas and a willingness to take risk. Wall Street and consulting is easy. Entrepreneurship and working in start-ups is hard. Take it from me, I took the easy route. After having spent 6+ years working with those who pursued the road less traveled, I can tell you I have immense respect for the self-confidence and doggedness of those who have answered the challenge. I’d like to foster even more of that kind of behaviour.
Refinement of the venture craft. When I embarked on the transition from angel to VC, I’ll be the first to admit that I couldn’t have imagined the magnitude of the differences between the two. I continue to learn every day, and as mentioned before, the education has been humbling. That said, we are constantly experimenting with new models of incubation and supporting entrepreneurship, and my sense is that we are in the second inning of an extra innings game. Local incubation is one thing. But is remote incubation possible? What are the criteria? What kind of team is necessary to feel comfortable funding an incubation outside of our home town? At IA Ventures we have a strong incubation culture, with the firm belief that being close to businesses at the edge of innovation keeps us sharp and constantly thinking of new ways of cracking markets. Yes, incubations are time consuming, but the potential rewards are vast in both the medium and long-term. We want to be known as a home for edge-case thinkers, where today’s edge cases eventually become the norm as markets and technologies shift and those ahead of the curve capture massive market share. Risky? Indeed. But using a measured amount of capital for such activities is the way we roll at IA Ventures. Only thing is we haven’t begun to consider all the ways we can express such views and risk appetite in our investment process. 2011 will be a big year for us in this regard.
More alternative data. My home field. However, when I say “alternative” I mean a hybrid between online and offline worlds. Places where there are barriers to data collection and aggregation but where once normalized and digitized, the data can be monetized in myriad ways. I have started to see many opportunities in this realm over the past 12-18 months, and will be spending more time looking at opportunities where our deep data analysis and data monetization expertise can be linked to those with access to troves of differentiated and powerful data looking for a home. That home is with me.
Mobility and hyper-local. Seems like two hackneyed and over-played areas, right? Well… It’s still early days. We’ve seen (and backed) some interesting companies in both areas, but feel there is much more value that can be created through a disciplined, data-centric approach to the market opportunity. PlaceIQ, MyCityWay and Yipit are merely three examples of early-stage investments IA Ventures has made. We are on the cusp of closing an incubation in the hyper-local realm and are actively looking at other opportunities in the space.
Reducing friction. It’s all about creating the optimal user experience; give the people what they want. With BankSimple, it’s a super user-friendly, transparent, hassle-free banking experience. With NewsCred, it’s customised news streams. hyper-targeted based upon areas of interest. With Sulia, it’s the ability to target precise groups of highly reputable commentators in one’s areas of interest. This is a theme that we see going on and on and on.
This list is by no means exhaustive but you get the idea. This is MY list and not that of my IA Ventures pals; they have their own goals and areas for development. Lots has been done, lots more to do. I am thankful for my family, my colleagues and for the opportunity to have worked with so many great people in 2010. 2011 should prove to be even better.
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