Relationships Over Research

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Research has been the bedrock of my professional career. I’ve often said that I invest from a position of “fear,” recognizing how strong the competition is and how essential it is to own a “right to win” if you are going to play this game. For much of my career, research was my “right to win” - enabling a “prepared mind” in obscure vertical markets that others lacked experience or interest in learning, providing some incremental edge that has enabled me to stay afloat as an investor over the last decade.

Much of my early career as an investor was defined by what would later be called “Prepared Mind Deep Dives” - essentially a powerpoint outlining our POV on a specific market opportunity. Those fancy powerpoints were incredibly powerful. They were a testament to the work we were willing to do behind a thesis, with numerous VCs admitting that they weren’t willing to do the same amount of work to 1) understand the market, 2) meet the customers, and 3) source/diligence all the relevant opportunities in the space. They would rather just join us on our journey. In many ways, those powerpoints were a sign of the sweat and commitment we were willing to put into a thesis and that provided an edge over the competition.

Over time, however, the advantage of those powerpoints has faded away. As I speak to other VCs on their adoption of AI, one of the primary use cases is getting up to speed on these obscure sector opportunities. All my experience toiling on desk research can now be automated. The work necessary to turn that into a fancy powerpoint goes from hours to minutes. What might have taken me 200 hours can likely be done in 2. The powerpoints we can make just aren’t as powerful as they used to be because everyone else can produce fancy powerpoints outlining a regurgitated thesis on the market. We used to distribute our research more externally and have pulled back from this a bit, recognizing that by putting our ideas out there, it makes it even easier for others to replicate our work. What does a firm that has defined itself on traditional research deliverables do to show its edge when those deliverables are democratized and commoditized?

But our firm has never been about just traditional research. We aren’t just reading reports about what is happening, we’re developing relationships to figure out what will happen. These reports were really just the output of the insights we gleaned from the relationships we developed with our thought partners (whom we lovingly refer to as “Bridgers”). As research deliverables get commoditized, I believe the strength of the relationships we have with these partners has evolved into the defining characteristic of our firm. And I’m far less worried about relationships being disrupted by AI than research.

While we’ll still have plenty of powerpoints that we put out, spending time with these industry partners has become one of my favorite parts of the job. I love the people in our industries. They are real-world demonstrations of how exceptional our country and its economy can be when properly executed. A few months ago, I was meeting with the former CEO of a nearly $40B company. I was flying back from Chicago to meet my wife/kids in Tampa for Spring Training (Go Yankees!) and this individual was gracious enough to make some time for me. We sat dockside for a few hours eating fish tacos, drinking Arnold Palmers and swapping stories - I loved every second of it. Not only is this person extremely successful, insightful and influential, but above all, he’s genuine, humble and appreciative. Here’s a guy that has had to kick and claw for every inch of his career and all he wants to do now is find ways to give back. He’s not doling out “expert calls” to the highest bidder; he’s trying to find the right folks to partner with and forge real relationships with. There is so much to learn beyond industry context when you get the chance to work with folks like that. We left that meal committing to find more ways to partner with one another. I love interactions like that and I’m fortunate that I get to spend more and more of my time with individuals like him that are not only deeply endowed experts in our industries, but the legends who built them.

This is where the core competency of our firm is shifting. We had staffed our firm for research, but have evolved into a firm anchored on relationships. With that, I’m now asking myself:

• What are the lessons we’ve learned from these individuals that aren’t indexed on the web?

• How can the industry leaders we work with help us define an opportunity and bring it to life?

• How can we align and mobilize our industry partners to provide unfair advantages to the companies we back?

• How can we create more value for our industry partners to attract, retain, and reward them?

• How can our firm evolve to optimize the potential of these relationships?

• How can we lean in on relationshpis, not just research?

These are the questions I’m asking myself on a daily basis.

More to come on how we’re doing this at Equal Ventures, but if you are an executive in Energy, Insurance, Retail, or Supply Chain, we’d love to get to know you. AI is an incredibly powerful tool, but we know that it’s the strength of our relationships with folks like you that will define our firm.

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PS: Make sure to check out our Commerce Capital Summit and Climate Capital Summit! Our industry summits are some of our favorite opportunities to spend time with our existing industry partners and forge relationships with new ones!