Saturday, January 10, 2015

A Venture Capitalist Mindset

Seeing things via VC’s lenses can help digital leaders & professionals manage opportunities and risks with priority, agility, and resilience.  
Digital leaders and professionals have to equip themselves with all types of growth minds and innovative thinking. Either you are a corporate executive or an entrepreneur; a business strategist or an IT manager, venture capitalists seem to be a group of professionals who win big, but also risk a lot, what can you learn from a venture capitalist mindset?

A portfolio’s mindset: Venture Capitalist (VC) manages portfolios of investments, continually evaluating individual and aggregate investments in terms of value, risk, and reward. VCs do not have a single or small set of assets – they have a number of (potentially diversified) portfolios.  Each portfolio has goals and metrics unique to that portfolio –investments are not compared across portfolios. Visibility into each investment is established to provide ongoing investment health information as well as enable understanding overall portfolio health.
An analytic, systems and risk intelligent mindset: There are both opportunities and risks for every investment. VCs have to apply systems thinking to make an objective assessment of their investment portfolio. Venture capitalists identify and evaluate investments in a way that drives enterprise value in terms that business leaders understand. They need to continue to make an objective assessment of their investment: Are they diversified?What is the relative health (risk, value, strategic importance) of each of the portfolios? What investments, or even portfolios, should be shut down? What investments, or even portfolios, should I direct more assets to? What, and where, are there talent gaps? How can I better communicate to and partner with the business to improve my portfolio’s value? What opportunities am I currently missing? Can categorizing portfolios work: (run the business, grow the business, compliance/regulatory, and innovation)
A Priority Mindset:  Ask any entrepreneur or VC, they would say, investing or running a business is a thorny journey, there are many roadblocks, distractions, or hassles on the way. Hence, a priority mindset to stay focused identifies promising big ideas for investment – ideas that will accelerate bold change. Some ideas may need to be incubated to allow time and effort to develop the idea and prove relevance and value. CXOs or managers with the VC-like mind will continue to prioritize and adjust the strategy, to leverage growth potential. The portfolio review and analysis is periodically performed by evaluating financials, schedule, and risk. They ask tough questions via VC’s lens:
– Can identify where budget, talent, and other resources & assets are focused vs. neglected.
- Can define portfolio strategies to make a smart investment.
– Can establish intended objectives, financials, and risk profiles in the portfolio
- Can leverage new or variations of existing processes and methods, such as agile,
- Can move ideas through their life cycle to achieve first to market
- Can achieve portfolios agility to anticipate and respond to changing market conditions
- Can attract talent with entrepreneurial talent, technical skills, and business savvy as well.
A good Venture capitalist’s mind is innovative and systematic as well, either you are a corporate executive or a high potential digital professional, learning to think as a VC will help you manage opportunity and risk more strategically and systematically; setting priority appropriately and unleash your talent or business potential with resilience and agility.


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