Being Honest About Intellectual Honesty
The Hard Truth About Soft Truths
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Today's post will be brief. I've got some exciting things coming in the next few weeks, but I wanted to take some time to think through a conversation I've now had with several people over the last week or so: intellectual honesty
Intellectual honesty is something that is surprisingly difficult. For a combination of reasons: incentives, misunderstanding, ego, public pressure. When people are placed in situations where there isn't as much objective reality (i.e. either something works or it doesn't) it can be quite easy to slip into intellectual dishonesty. Investing in startups is a place without as much objective reality.
I've written before about the prominent place that storytelling has in venture:
"Storytelling can quickly become a slippery slope if it's not coupled with significant amounts of intellectual honesty and a spirit of humility. Both of which are things the VC world could use a lot more of."
The Fluffiness of VCs
This week a Techcrunch article came out entitled: A Gen Z VC Speaks Up: Why Gen Z VCs Are Trash. First off, it's funny that this article sparked some of my thoughts this week. If I'd made my whole post about this article it would have been the 3rd week in a row my post was about a controversial internet thing after Adam Neumann and Bun's hiring mentality.
Secondly, I'm surprised that Techcrunch would run such an offensively generalized title. I know dozens and dozens of people who fit in the Gen Z age group who are VCs, and are phenomenal. I've met VCs who are Boomers and are trash. So the generalization is unfair. But here's one key point that I chatted with several people about:
"There aren’t true “thought leaders” in the space either. Everyone’s top aspirational VCs don’t have insightful takes or meaningful Twitter posts — just retweets, shameless self-promotion and the occasional ask for food recommendations in whichever city they’re visiting."
I don't think this is unique to "Gen Z VCs." This guy obviously has beef with specific people. There are a lot of VCs who are focused more on promotion and marketing than on actually being thoughtful about the investments they're making and the technology they're supporting.
I liked how one of my friend’s put it after reading that Techcrunch article:
"Hot or new takes seem to be exclusively anonymous twitter accounts or obscure substacks, while anyone public seems limited to wikipedia regurgitation or neutral opinions. People are trained to prevent getting caught in the internet crossfire."
So You've Been Publicly Shamed
Cancel culture and online public shaming is an insane tapestry of good and bad. And there is a much broader discussion to be had beyond venture. But I often come back to the ideas in the book "So You've Been Publicly Shamed" by Jon Ronson, that help me think about people’s social incentives online.
That might seem like a strange book to reference when talking about the intellectual honesty of VCs, but hear me out. Venture is already a difficult attribution business; what really matters? What makes you successful? Hard to say. Public persona is literally half (if not more) of the battle. How people perceive you in venture can dictate who wants to take your money, who wants to give you money, and who wants to work with your companies.
So being wrong can be terrifying. And being wrong in public? Forget about it. VCs often feel obligated to craft this story of who they are as an investor. Ronson talks about this idea in the book:
“The way we construct our consciousness is to tell the story of ourselves to ourselves, the story of who we believe we are. I feel that a really public shaming or humiliation is a conflict between the person trying to write his own narrative and society trying to write a different narrative for the person. One story tries to overwrite the other. And so to survive you have to own your own story.”
Everyone tries to own their own story by being a part of the good narratives and distancing themselves from the bad ones. Some VCs have crafted their story by being irreverent and contrarian but by and large what's the safest way to live life as a VC? Again, from Ronson's book:
“We're creating a world where the smartest way to survive is to be bland.”
Same idea as my friend's response to the Gen Z article: "avoid getting caught in the internet crossfire." That’s why VCs are so meme-able; they’re normalizing. Fitting into a particular behavior pattern. VCs are incentivized to avoid being wrong, combative, or (ironically) contrarian. Most VCs would prefer their "contrarian" bets are only contrarian for as long as they're in stealth.
And these aren't just character traits, there are strong incentives. Whether it's founders taking your money, LPs giving your money, or people wanting to work with you; there is a tangible cost to being wrong. So instead of being intellectually honest VCs will craft their story to satisfy their incentives.
I Can Move The World
Archimedes is quoted as having said, “give me a place to stand and with a lever I will move the whole world.” The same is true of incentives:
"Give me a big enough incentive to offer the world and I'll change their minds about anything."
Another way of putting it?
"It is difficult to get a man to understand something when his salary depends upon his not understanding it." (Upton Sinclair)
This is similar to an ongoing conversation about money in politics. I always think about a Town Hall a few years ago where a high school student who had survived a school shooting asked Marco Rubio to commit to not taking any more donation money from the NRA. His response was, "people buy into my agenda." I think that's an example of intellectual dishonesty.
Ignoring your incentives don't make them go away. Are we incentivized to learn from our mistakes? Are we incentivized to invest in the most impactful businesses? Are we incentivized to collaborate with our partners? Or are we not?
What Does This Mean For Venture?
At some point I'd like to go deeper into the idea of conducting post-mortems; honestly evaluating what happened when something got wrong. There is a huge benefit in being able to improve your processes by reflecting on how they've performed in action.
But for now I'll leave it with another co-opted quote, this time from Peter Thiel. In his book Zero to One (have you heard of it? 😉) there is a famous line that illustrates his view of contrarianism. When Peter Thiel interviews someone he likes to ask the following question: What important truth do very few people agree with you on?
"This question sounds easy because it’s straightforward. Actually, it’s very hard to answer. It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rare, but courage is in even shorter supply than genius."
I like that question. Even before that, people should ask themselves more often "what do I believe?" And then expand to consider what they believe that others disagree with. But there is another question I think more people should add to their arsenal:
"What's something you believe strongly that you're probably wrong about?"
Venture investors know that most of their investments will fail. But being able to talk about it and learn from it when that unavoidable reality occurs should be more normalized.
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