The Predictability of Human Behavior and the Power of Storytelling in Venture Capital

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Aug 12, 2023

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The Predictability of Human Behavior and the Power of Storytelling in Venture Capital

Human behavior is a complex phenomenon, influenced by a multitude of factors. However, recent research conducted by a group of leading Northeastern University network scientists has revealed a surprising finding - human behavior is 93 percent predictable. This study, led by Distinguished Professor of Physics Albert-László Barabási, focused on analyzing the mobility patterns of anonymous cell-phone users.

The researchers discovered that despite the significant differences in travel patterns among individuals, most people are equally predictable. The predictability refers to the probability of foreseeing an individual's future whereabouts in the next hour based on their previous trajectory. Interestingly, this 93 percent predictability holds true for both individuals who frequently travel long distances and those who tend to stay close to home. Moreover, the regularity and predictability of movement were found to be consistent across various demographic categories such as age, gender, language groups, population density, and urban versus rural locations.

One might assume that spontaneous individuals would disrupt the predictability of human behavior. However, the research findings suggest that such individuals are largely absent from the population. Regardless of time and distance, individuals tend to follow a simple pattern and exhibit a strong tendency to return to locations they have visited before. While this might seem obvious, it is still fascinating to see how a significant portion of human behavior can be accurately predicted.

Now, let's shift our focus to the world of venture capital and the power of storytelling. Introducing Not Boring Capital, an $8 million venture fund that invests in companies with compelling stories and helps amplify their narratives. Led by Packy McCormick, Not Boring Capital primarily invests in Seed through Series B companies, with occasional pre-seed and growth-stage investments. McCormick's unique approach combines his expertise in investing with his exceptional writing skills, creating a powerful flywheel that enhances both aspects of his work.

Within the verticals of investment, fintech holds a prominent position for Not Boring Capital. This sector has seen the highest number of investments (6) and the highest amount of dollars invested ($525k). The fund's investment strategy can be divided into three categories: Core, Explore, and Growth. The Core investments have the potential to deliver significant returns and constitute about 75% of the total dollars invested. Explore investments are smaller in size but provide opportunities to secure a seat in the next round or increase deal flow. Growth investments, on the other hand, are later-stage or safer options with a lower ceiling but a higher floor. These account for approximately 20% of invested dollars and have the potential to collectively return the fund once.

The success and growth of companies like Apple highlight the transformative power of time and strategic investments. In 2011, Exxon was the most valuable company in the world, with a market cap in the low-$400 billion range. Today, Apple's market cap stands at a staggering $2.4 trillion, nearly six times higher. Not Boring Capital recognizes the potential for exponential growth and aims to leverage its unique approach to investing and storytelling to drive similar success for its portfolio companies.

Packy McCormick, the driving force behind Not Boring Capital, has always had a passion for three things: meeting and talking to smart people, reading and writing, and investing. These pillars form the foundation of his work and allow him to bring a fresh perspective to the venture capital landscape. By engaging with intelligent individuals, immersing himself in knowledge through reading and writing, and strategically investing in companies with compelling stories, McCormick has created a symbiotic relationship between his interests and his professional endeavors.

In conclusion, the predictability of human behavior and the power of storytelling in venture capital are two intriguing concepts that intersect in unexpected ways. While human behavior may be 93 percent predictable, it is the remaining 7 percent that leaves room for innovation, growth, and the creation of compelling stories. The success of Not Boring Capital lies in its ability to identify and invest in companies with unique narratives, utilizing the power of storytelling to amplify their impact. For aspiring investors and entrepreneurs, here are three actionable pieces of advice:

  • 1. Embrace patterns: Recognize the predictability in human behavior but also seek opportunities to break free from established patterns and create something truly unique and innovative.
  • 2. Master the art of storytelling: Craft a compelling narrative for your company or investment to captivate the attention and imagination of your audience. A well-told story can make all the difference in attracting investors, customers, and supporters.
  • 3. Foster symbiotic relationships: Look for opportunities to connect with like-minded individuals who can enhance your knowledge, skills, and network. Collaboration and mutual support can create a powerful ecosystem that fuels success.

By integrating these actionable tips into your approach, you can navigate the complex landscape of human behavior and venture capital with greater confidence and strategic insight.

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