Becoming a VC has had the same effect for me as getting an MBA – it’s provided me with a label that has opened some doors. But a label is different from substance, it’s thin, and sticks to the clothing you’re wearing. Under the clothing is you.
I’d never been a VC before and it felt very much like a very fast race, but where I was learning the event and the course as I went. So much to learn about the business of evaluating embryonic, wildly ambitious businesses as well as learning the mechanics of investing other people’s money.
Then again, this is a lot like every job I’ve ever had. In every startup I’ve been in, we were creating an entire new category in the market. No one had a playbook, no one had studied this before. Yet, we had a business to run, and customers to keep happy. We wrote the rules, we led our teams, in real time.
About 15 years ago, right after business school, I worked for a high powered management consulting firm in Boston. I managed a small group of undergrads, and we worked with large firms on tough strategy problems. It was intellectually rigorous and obsessively methodical. It was very much about the essence of management: establish a plan, direct a team, measure results. You operated with a playbook you carefully constructed as you went along.
My team? All recently minted undergrads, and so, so much smarter than I was. At various points I managed Steve Levitt (yes, Freakonomics), Glenn Berger, Russ Wilcox, and Greg Sands. But all I was focused on was how their smarts compared to mine, and as a result I quickly lost my ability to direct them. I lost my ability to let my experience and perspective provide a framework and direction. My ego, fed with insecurity, became this huge obstacle to success.
In about 18 months, it was clear I was failing. I was repeatedly counseled “forget about how smart they are, they need the direction that your experience can provide them”. But I couldn’t. I’d like to say I failed “spectacularly”, but there’s never anything spectacular about consulting firms. I failed quietly, by being told I would have three months to find a new job.
With hindsight I realize I lacked the confidence to accept what I knew and didn’t know, I thought I had to know everything, and if I didn’t, I spent a lot of time and energy trying to create the illusion I did. All that energy got wasted and prevented me recognizing and embracing their talent, and I couldn’t focus on the pleasure of enabling and directing their effort and success.
So in the first few months in my role as a VC, I had almost an out-of-body experience. I could see where I could go back down that path of ego-as-obstacle – so much I didn’t know, so many people who knew so much more. But this time it was different. I had the accumulated scar tissue to “let go”, to seek and embrace that line where I knew what I knew and where I didn’t.
This time there was an added twist. This is an industry where a very few people have made enormous amounts of money by helping to create groundbreaking new companies. But the other 98% of us? We haven’t. That “aura” is thrust upon you, projected on you by the people who seek your advice and your funding. It’s easy to let that define you, to let that inform the ego you present to the outside world.
So, I love knowing that if I’m lucky, I will meet and work with people smarter and more capable than I am. I also love knowing that I haven’t yet made billions in this business. I still believe I’m really good at it, and enjoy it. But it’s a heck of a lot lighter meeting with entrepreneurs and co-investors, comfortable in the skin I am wearing. We’re all a lot more effective, and at ease.
So, I love having no ego in this business. For me, ego is different from being smart, experienced, and helpful. You can be all those, but you can be those in a way that meets people in their comfort zone on their terms, not yours.