“In this respect the teachers of new religions have always had a considerable advantage in attacking those ancient and established systems of which the clergy, reposing themselves upon their benefices, had neglected to keep up the fervour of faith and devotion in the great body of the people, and having given themselves up to indolence, were become altogether incapable of making any vigorous exertion in defence even of their own establishment. The clergy of an established and well-endowed religion frequently become men of learning and elegance, who possess all the virtues of gentlemen, or which can recommend them to the esteem of gentlemen: but they are apt gradually to lose the qualities, both good and bad, which gave them authority and influence with the inferior ranks of people, and which had perhaps been the original causes of the success and establishment of their religion.”
Apart from some useful technical information, my emerging learning from this course on Venture Capital at Aalto University is that the venture capital world, and startup culture in general, is intensely sexist and it doesn’t seem to care.
I’ve been embedded in geeky tech culture my whole life, so I’m very aware that this has been a long problem. I remember big LAN parties with 100+ people, and it was notable that <10% were female. As an optimist I always thought the trend was in the right direction. These days, female geeks hold their own space in the culture to a far greater degree than previously. Use of language which threatens and enforces patriarchy seems to be the current battlefront. It is now more acceptable than not to call people out on their use of language.
Learning about the world of venture capital has revealed a vast untapped land of rampant sexism to me. It first twigged when the lecturers talked about venture capital being all about who you know. This revealed a certain introspection, to the US market in particular. Then I noticed that all the language was gender exclusive - all hypotheticals referred to founders, VC partners, VC investors, all being ‘he’. When I checked the text book, I discovered that it too is a domain for men only.
It was coincidental then to read a critique of Paul Graham, a VC I have long admired for the innovative Y-Combinator startup incubator model. It seems that not only is the brogrammer culture alive and well, it is reacting against change.
Y-Combinator, claims to be data-driven. The lecturer claims that he and his colleagues work hard to put aside selection-bias when hearing pitches from founders. But I refuse to believe that the only people having good ideas, worthy of investment, trial, and hopefully growth, are white males under 35. Also, more likely than not, American.
There is a certain irony to this being my key learning from this course, as a white male under thirty (not American).
The pattern of investment strikes me more as a failure of the dominant VC model and startup culture, than a failure of society to produce innovation from a diverse set of people.
Here we are in Helsinki, Finland where I am doing one of my MBA subjects by exchange at Aalto University. The course takes just two weeks, and is quite fast moving and I’d like to capture some ‘point in time’ thoughts before they drift.
At this point I am more interested in learning about venture capital, rather than commenting on the cross cultural experience. That will come no doubt, especially when it comes to group assignments!
There are two lecturers: one a practical, rugged American who has been a VC, been an entrepreneur, and an angel investor; the other is Finnish and from an academic background researching VC. They are very different yet complimentary. The delivery format is a very traditional, with theory forming the backbone of the lecture as delivered by the Finn, but punctured by narratives from the American. It works well.
As a broad overview however, venture capital in the traditional American sense seems more pragmatic and brusque than I imagined. Essentially the aim is to raise capital from investors, invest in companies, have input into how they are run, and then sell them quick. The quick turnover is what I find interesting. Although the average length on an investment may be 5 years or more, the aim is to get in, scale up, and sell out quickly. That means that VC is only going to work when there is a large potential market. Thus VC targets a much narrower segment than I expected, although angel investors and seed incubators fill in the gaps.
A further observation is that the VC model funnels control through them - investors, and entrepreneurs often only connect through the VC. It also means that the investor is the customer, not the entrepreneur or the users of the service. I wonder whether this model will be disrupted by crowd sourcing, where funds are instead provided by actual customers through pre-purchases. Another interesting aspect is that the VC receives management fees on the invested capital, often around 2% pa, as well as a share of the future profit on a sale. The incentive structure is built strongly around reputation as well as scale.
It is certainly lifting the veil on a world Iv’ve long been interested in, but not known much about.
This week I am at linux.conf.au in Canberra, the first two days of which are various thematic mini-conferences before the main program commences on Wednesday. Today I attended my favourite of the mini-conference streams: Open Government.
At previous conferences my interest, due to my job at the time, was focussed on community services groups and smoothing the process of integrating data transfer and access. Today however, my mind took a different tack due to my immersion in the world of the Anglican church in Adelaide.
I was struck by the similarity of the problem set faced by the public service, and the Diocesan Office where I work. There is a distributed and somewhat loosely coupled organisation surrounding it. There are silos, spheres of influence, pressure to extract more value from limited resources. More than that though, there is a commitment by the people there to do something more for society - to serve a public good. Thus the discussions were not only around efficiencies - the desire to create a better society was ever present.
Similarly there is a ‘value commitment’ (to use a tepid management term) in working for the Church, and a desire to strengthen and grow it not just through the prudent use of resources, but actually helping it achieve its purpose.
I want to do a quick list of takeaway insights and ideas of relevance before I forget them tomorrow and next week:
- More than just opening data, Government can be considered an API. It is like a platform for building and growing society. Therefore the emphasis is on low cost, standardised, open transactions to encourage growth at the periphery.
- The temptation is to tax and regulate, but those brute force methods have huge hidden costs. Where there is a problem, see if the existing system is causing the ‘pinch’ and try to resolve it there.
- It is all very well to collect and store huge amounts of data and information, but its value is usually not increased at the center of the organisation. It is better to release, even if there is no obvious utility at the time.
- If you are risk averse (as Governments often are) find a way to outsource the risk. Have a hack fest, or competition.
These are things I think have relevance to our approach at Diocesan Office. The Diocese as a platform is particularly interesting, as it harks back to the reason for forming one in the first place.