- Venture Capital
Is This The Black Swan Moment To Solve Big Problems?
As Sequoia Capital put it, “Coronavirus is the black swan of 2020” and as the Kauffman Fellows team was discussing this, we believe Sequoia’s statement may carry a lot of truth. Over the next few weeks — months, and possibly years, we will learn more about the second-order effects of COVID-19. But every single one of us, friends, family, and loved ones will be impacted in some way. Sam Altman, recently wrote, “there are going to be entire history books written about this coming week”. And so, it is in this time of great uncertainty, we send our thoughts and best wishes to you and your loved ones.
At the same time, we also know that young companies are the job creation center of the world. 95% of the net new jobs created in the US over the last 20 years were from companies less than 5 years of age. Airbnb, Uber, and Square are just a sample of the many great companies that were forged in the middle of a downturn – and these companies alone have created over 45,000 jobs and created value for millions of customers globally. In this tough time, the innovation ecosystem is more important than ever before.
We also know that, historically, VC fund vintages during economic downturns tend to outperform. So, will this black swan turn into a black swan of opportunity for the next great generation of entrepreneurs? In the age of globalization, is this an opportunity to bring us all together to fight for a single unified goal?
How can we foster an enduring entrepreneurial climate during tough times?
Stay open for business (but not in person for now): the backbone of the innovation economy, and, the entire ecosystem, depends on founders and venture capitalists like yourself continuing to dream big and execute even bigger. Make it clear you are open for business. Share it on your website, on social media, or shout it (from a distance) from the top of your roof.
Coopetition: let’s continue to build relationships (through Zoom of course). The intimate portfolio discussions, insights, blogs, and thought leadership must go on. LPs, we haven’t forgotten about you. Continue to listen to emerging managers and continue to push the ball forward on novel investment theses – this is an unprecedented time where managers have an even greater responsibility to support themes that serve society, like climate and globalization. Remember, these managers will soon be the new face of venture capital.
Empathy: managers, LPs, and CEOs – we have the great privilege and responsibility of helping move humanity forward. At the same time, it’s important to recognize that we are all on the same team and that each of us has a very challenging role to play. Have empathy for the individual on the other side of the table.
At Kauffman Fellows, we aspire to achieve all three.
This is up to each of us. How we react to uncertainty, and how we rise to the occasion – will ultimately determine our future, together.