An investor’s authentic fit

My friend Sundeep Peechu from Felicis Ventures went on a tweetstorm yesterday evening. I really liked what he had to say so I’m sharing it in whole below:

“There are many many ways to invest successfully. You have to find something that fits you authentically. Here are a few common ones.

Team lens: key skill – lifetime of reading people – understand founder motivation/unique ability better than most.

Product lens: key skill – great consumer instincts – typically comes from being an early adopter nonpareil or an avid seller.

Market lens: key skill – unique insights on what’s next. Thinking like an entrepreneur and developing original ideas.

Traction lens: key skill – gathering data/selling – network like crazy, know when something’s breaking, reverse pitch founder.

Follower lens: key skill – building long term relationships that allow ability to invest with other successful investors.

Most successful investors use a combination of these but there are many that use just one.”

I think that Sundeep’s tweetstorm is very insightful. You need to be very strong in at least one of these dimensions to be a successful investor. But even the most successful investors don’t have each of these skills. Instead, they learn from experience which one or ones give them their edge, and trust their instincts in those areas. They also rely on the other lenses for supporting evidence, but their decisions are driven by their evaluations in those lenses where they have the strongest edge.

Personally, I rely primarily on the team lens. Specifically, I evaluate what founders say and do in areas related to, as well as areas that may at the surface appear unrelated to their startup. I then analyze these signals to understand how they think and what motivates them.

After team, I also rely on the market, product, and follower lenses in that order.

The traction lens is the one that least fits me.