‘Orthogonal’ Thinking and ‘Going Nuclear’ as a VC

One of our investors recently mentioned to me the difference between “orthogonal” and “linear” thinking.

By the former, I think of it as: multi-dimensional, creative, having disruptive potential. By the latter, I think of: logical, incremental, thoughtful (but almost obvious).

I think entrepreneurs are predominantly orthogonal thinkers. My partners and I often mention how entrepreneurs truly do see the world differently. They see the same pieces of information that the rest of the world does, but for some reason, they’re able to project further into the future and see potential that others cannot.

The challenge with backing entrepreneurs is that the orthogonal point of view can often create blind spots and irrational exuberance  So, as a VC, you have to work hard at enabling entrepreneurs to “go for it,” but at the same time, give advice as to when you think they’re going off the reservation.

Believe it or not, VCs have very little day-to-day power. We can influence people and situations, but we aren’t at the companies every day. Sure, we can give up on companies and force a shut down, or we can fire people (I call these the “nuclear options”).  But, you in practice rarely use those options without the entrepreneur’s consent. There needs to be a lot of trust there in the relationship.

It’s ironic, but venture capital means you have power but that you rarely use it. You really in the end have to let entrepreneurs do what they want. And, if they fail, you have to give a helpful ear and give them a hand. And, when they succeed, you hope they stay humble and hungry.

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