143. Adopting a VC Mindset: How to Achieve More by Thinking, and Communicating, Like a Venture...
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Introduction
- Stanford Executive Education offers on-campus SE Suite programs to refine leaders' approaches and stay ahead in the ever-changing landscape.
- Matt Abrahams, a professor at Stanford Graduate School of Business, introduces the podcast's guest, Ilia Stev, founder of the GSB's Venture Capital initiative and professor of private equity and finance.
The Venture Mindset
- The Venture Mindset is a new mental model for leaders to make smarter and quicker decisions, especially in uncertain and disruptive situations.
- Venture capitalists have developed this mindset after facing decades of failures and uncertainties.
- By thinking like venture capitalists, leaders can become better decision-makers, even if their work is far from the world of venture capital and startups.
Embracing Failure
- Venture capitalists are "failure champions" because they understand that constructive failure is sometimes necessary for success.
- A story is shared about two entrepreneurs who received funding from a venture capital firm for their gaming company.
- Despite the game's failure, the investors, including Excel Partners, decided to continue supporting the founders due to their strong teamwork and resilience.
- This support led to the development of Slack, one of the most successful companies in the world.
Decision-Making in Venture Capital
- Venture capitalists start by identifying numerous opportunities and then quickly narrow them down to the most promising ones.
- Successful venture capitalists ask the question "Why should we not proceed?" rather than "Why should we invest?"
- This approach allows them to focus their efforts on potentially more profitable opportunities.
- Venture capitalists communicate differently among themselves by using negative questions to ensure efficient and quick decision-making.
Applying Venture Principles in Personal and Professional Life
- The "Why should we not proceed?" mindset can be applied to personal and professional life to drive efficiency and generate new ideas.
- Venture mindset principles can be applied to job hunting after being laid off.
- Saying no more often can be valuable, as venture capitalists say no 100 times before making an investment.
- Saying no allows for focusing on the most promising opportunities and leveling up abilities.
Lessons from Teaching Venture Capital
- Venture capitalists think long-term, considering lifetime income and happiness.
- Don't rush into decisions, especially career-related ones. Think long-term, not short-term.
- Be willing to say no and see the long view.
- Thinking differently:
- There are many ways to approach problems, and some are more efficient than others.
- Venture capitalists encourage students to think outside the box and look at problems from different angles.
- Building a meaningful network:
- The right time to build your network is yesterday.
- Focus on increasing the number of meaningful contacts and diversifying those contacts.
- Venture capitalists have more diverse connections on LinkedIn compared to corporate innovators.
Passionate Communication
- Diversify your network to include people from different industries, educational backgrounds, and geographies.
- Question the way you make decisions and think, and challenge yourself to do it differently.
- Use elegant and descriptive language when describing things you are passionate about.
- Mix the traditional mindset with the Venture mindset when describing things you are passionate about.
- Use language that everyone can understand, but also add your own unique perspective.
The Final Three Questions
- The guest, Matt, is asked three questions.
- The first question is about how writing his book, The Venture Mindset, has changed his approach to work and communication.
- The second question is about a communicator he admires, and why.
- The third question is about the first three ingredients that go into a successful communication recipe.
- Matt has become more positive about failed research projects, viewing them as necessary for successful research.
- He has also made an effort to network and talk to new people whenever he travels.
- Matt admires Winston Churchill for his ability to communicate simple truths and controversial thoughts in a way that everyone could understand and be fascinated by.
- The first three ingredients for successful communication are listening, listening, and listening.
Conclusion
- The Venture mindset involves understanding everyone's opinion to effect change in the world.
- Listening is crucial to understanding others' opinions and responding effectively.
- Stanford Executive Education programs offer insights from Stanford GSB professors and bring together top leaders from around the globe.