Back yourself

When nobody else likes the deal but you. That’s how you win big.

Fred Wilson of USV, from his post “Negative Social Proof“

Over the years I’ve reviewed literally thousands of businesses for investment, whether for the active investment company I worked in for 16 years. as an angel investor, or for my personal account. Though therefore pretty experienced at assessing business value and investments, much of what I have learned over the years comes from studying the titans of the field, such as (to me) the greatest of all, Warren Buffett.

Another investment titan is Fred Wilson of Union Square Ventures, who also writes a daily blog. The quote above really resonated for me and the lesson behind that for me is simple.

Back yourself

As Fred notes, whether through research, instinct or a combination of the two, the greatest investment returns come from when you (correctly) assess that the opportunities are where others choose not to or fear to tread.

However, beyond research and instinct, the issue is often that we feel more comfortable “following the herd”. When we think of investing where we are confident but where others don’t see it the way we do, we can often back off if we allow self-doubt to creep in. I know, I’ve done it.

So, for me at this stage in life, I have learned to invest less but invest more in where I see something others don’t, or (equally valuable) where others see it but choose not to go against the herd. Two examples:

1. I am selective about businesses I take on as clients and will only do so if I see something the client doesn’t see in terms of “what’s next”. Though I rarely take a “skin in the game” stake in client businesses (I normally work on a long term retainer), I love to support them through to the point where they see their full potential then realise it, so in these cases my “investment return” is feeling fulfilled from playing a part in their journey!
2. I am convinced that #WFA (Work from Anywhere) is here to stay. I believe that in large cities a hybrid trend of 2:3 (two days at home, often Monday and Friday, 3 days in the office) will take hold, and perhaps even 3:2. Over the next decade, I am certain that high streets of suburban areas will see a renaissance as people spend more time close to home. I’ve therefore bought a house in one of those towns that I feel is ideally situated and am moving there next month. I then intend to get to know the area, slowly and patiently, with a view to investing in multiple businesses in the “high street” as demand grows.

In short, I “back myself” both in terms of the client I love to and choose to work with and with where i have bought my next house to live in.

Where do you back yourself?

PS I did not invest in Amazon or Google or Expedia in the early days, despite being hugely involved as an early stage customer (at a business level) in those days and being sure they would become dominant. Oh well, “..regrets, I’ve had a few, but then again..”