The Leap Of Faith
Our family belongs to a jewish community in lower manhattan called The New Shul. Last night we celebrated our 10th anniversary and the co-founder, Holly Gewandter, gave a great talk about taking Leaps of Faith. The whole history of the community is one big leap of faith. They had no clue how to start a shul. Everything they did was counter to established norms. And yet, ten years later there's this large and growing community that is great to be part of.
Of course, as Holly was talking, I was thinking of different leaps of faith. I'm not much for religion to be honest. It's something I partipate in but not something I believe in.
But I very much believe in leaps of faith. Every investment we make, every person we back, every strategy we concoct in partnership with the entrepreneurs we back is a leap of faith. Wikipedia says that a leap of faith is:
I was on a call yesterday with another VC who asked me why we made our investment in Zemanta last summer. There's a blog post I wrote up that explains our thinking at the time, but I did not point him to it. I explained that we had a gut instinct about the technology, market, and team that made us think there was a substantial opportunity in allowing people to "write smarter."
There is no market for tools, beyond spell checkers and grammar checkers, to allow people to write smarter. There's no business model for a tool like Zemanta. There's no established track record of successful internet companies in Slovenia. In short, there was little to no empirical evidence to go on when we made our investment in Zemanta. And nine months later, there still isn't.
So I told the VC I was on the call with that if he was going to invest in Zemanta, it would have to be a leap of faith. Maybe he'll make it and maybe he won't. I still have faith in Zemanta and I still have faith in all of our portfolio companies.
You need a lot of things to be a successful venture capital investor. You need to understand the market you invest in. You need great networking skills. You need to be able to add value to your investments. You need an understanding of financial markets and how companies are valued. Those skills are neccessary but not sufficient. Because most of all you need to be able to make leaps of faith. And the right ones, of course.