Finding the right balance between skepticism and openness is important for everybody. Being overly skeptical makes one curmudgeonly and to be too open is to be gullible. Neither is good.
It seems to me what is called for is an exquisite balance between two conflicting needs: the most skeptical scrutiny of all hypotheses that are served up to us and at the same time a great openness to new ideas. Obviously those two modes of thought are in some tension. But if you are able to exercise only one of these modes, whichever one it is, you’re in deep trouble.
If the balance is important for everyone, for VCs it’s the difference between success and failure. Any decision to back a tech startup requires a high level of openness to new ideas, but doing it well also requires an ability to quickly dismiss the ideas that aren’t going to work. If you’re too skeptical you don’t get any deals done (and founders won’t want to work with you) and if you’re too open you invest in too many blue sky ideas that don’t get off the ground.
Reading that Carl Sagan quote made me reflect on how to get the balance right. These are a few of the things we try to do at Forward Partners:
- Be reflective and self-aware – know that you are striving for balance, and keep an eye on yourself and how others are perceiving you
- Link big ideas back to use cases
- Avoid being nit-picky
- Always be prepared to explain an opinion
- Assess dependencies
- Write things down
- Welcome challenge
- Seek out contrary views
- Strive for high levels of objectivity
- Value correctness over consistency
- Have no pride
A lot of these apply to good decision making in general.