Ben Siscovick at IA wrote a thoughtful post on the value of Experience. It stemmed from his recent conversation with Fred Wilson. It’s a good and thoughtful post that I recommend reading, especially for folks who are learning the venture business. I agree with his statement 100%, and would really emphasize the importance of great mentorship (although I think that is really scarce). Below are a few other comments:
1. I think experience has a couple vectors. One is time, the other is volume of experiences. I would argue that a few things allow for younger investors to gain more experience today than in years past. First is the rapid flow of information. We can watch the rise and fall of companies and the issues entrepreneurs face so much more easily (even if it’s superficial) than in past times. Second, if you are a seed investor, you get a non-superficial view into more companies more quickly than the standard 2-deals/year pace of a VC. This volume can really help to accelerate learning.
2. The second vector of experience is time, and it has no shortcuts. But I would argue that even more experienced investors don’t necessarily learn the lessons of time because they don’t know how to evolve or they lose the motivation/hunger to win. Some investors are successful for a period, but don’t have sustained success over multiple economic cycles and multiple technology innovations. Actually, the number of investors who really have done this are very very very tiny.
3. Which leads to mentorship. Again, I think there are two vectors here. The first is whether the person has great wisdom to impart. Are they part of the very small group of folks who have great mentorship to offer through both their time in the business and volume of experiences? But that’s not all. The other requirement is willingness to mentor. Do they care? Are they introspective enough to process their experience, reformat it for the current environment and share it with a younger investor? Are they flexible enough to understand when some of their experience may no longer be relevant and admit that? Really really rare to find great mentors like this.
4. I’m curious to hear what Sarah says, but one other way to augment experience is institutional memory. So you can benefit not just from the experience of a few great investors but the collective experience of a franchise like Bessemer over time. I think there is something important here too, but I haven’t experienced it first hand since I’ve been at relatively young firms.