We talk a lot about the long term, but the long term doesn’t exist if the short term doesn’t work out. I look for teams that strike that delicate balance between optimising for a big vision and keeping a close eye on day-to-day execution.
Theories of mind
I’m fascinated by minds – they’re the foundation of everything we experience and do, but we’re far from explaining what gives rise to them or even how best to use them. I think we underestimate the role of emotion in this: we might try to be cold, rational beings, but we are evolved organisms with emotions that play an important role in thought and behaviour.
To me, acknowledging and exploring this fuzzier side gives us our best chance of making good decisions and living well. Recently, I’ve enjoyed Lisa Feldman Barrett’s work on this. She debunks the idea of basic, universally experienced emotions, instead suggesting that we ‘construct’ our emotions in the moment, interpreting bodily signals through the lens of past experience, culture and language.
Weirdly, I got into this subject through investment. To understand a business, you need to understand why customers like it and why employees give it their best efforts. To understand an investment, you need to understand whether management is aligned, the interests and beliefs of other people valuing it and, of course, your own biases. And to successfully make and hold investments for the long term, you need all the above, as well as trust and psychological safety with your team, clients and portfolio companies. Each part poses big questions that psychology and related subjects can help us answer.
Exceptional and efficient
It takes exceptional people to build exceptional businesses. I admire teams that see clearly and can both zoom out to articulate a coherent long-term vision and picture of their industry and zoom in on the significant details of their company. I worry when it seems like people are playing a role or presenting things in a way that I don’t think reflects reality, and I get enthusiastic about teams that seem honest with themselves and with investors.
Many of the private companies we invest in have yet to make a profit. That’s OK – our style of investment exists to generate returns for our clients by funding innovations and business models as they scale. That’s particularly motivating and potentially profitable when firms work to fill a large and unmet societal need, but only if we properly judge between opportunities. Good unit economics and capital efficiency are key inputs to this – they are basics that we can’t lose track of.
Location
Edinburgh, Scotland
Favourite books
Lisa Feldman Barrett: How Emotions Are Made
Marcus Aurelius: Meditations