The Criticality of Timing and The Big Lessons From History

The Criticality of Timing and The Big Lessons From History

In the world of investing, timing is everything. Scott Belsky, a seasoned seed-stage angel investor, understands this concept all too well. Since 2010, he has been focused on helping early-stage companies in various sectors, including consumer, marketplace, and the ever-evolving "transformation by interface" space. Belsky's expertise lies in crafting the first mile of a product, structuring design-driven product teams, blending copy and user experience, optimizing defaults, and considering ego analytics, among other fascinating aspects.

But investing isn't just about the numbers and strategies; it's also about the narrative. Positioning a product is as crucial for the team's perspective as it is for external marketing. The story of a product matters, and Belsky admires teams that value initiative over experience. He believes that the art of business lies in the things that don't scale, while the science of business focuses on scalability.

Navigating the messy middle is where Belsky truly shines. He supports mission-driven teams that prioritize design and exceptional product experiences while solving real problems and connecting and empowering people. The best teams, in his opinion, leverage existing forces to their advantage. They possess remarkable imagination but remain grounded in the present. These teams are driven by empathy for those suffering from the problem they aim to solve, rather than being fixated on one particular solution. They maintain an optimistic outlook on the future but remain pessimistic enough about execution. And above all, they are never satisfied with the current state of their product.

Now, let's shift our focus to the broader lessons we can learn from history. When studying history, there are two types of lessons to be gleaned. The first type revolves around specific events, such as what a person or country did right or wrong, which ideas worked, and which strategies failed. While these lessons have their value, they are limited in their applicability to the future.

The second type of lesson we can learn from history is the broad behaviors that repeat themselves across multiple fields and eras. These lessons have a higher degree of usefulness for the future. One such lesson is the significant progress we have made in combating diseases. Compared to our pre-industrial ancestors, we are far less affected by diseases today. If we were to experience the same death rates they did, societal shock would ensue. However, it is essential to recognize that this progress also presents unique challenges, as we have witnessed with the COVID-19 pandemic.

Carl Jung, a renowned psychologist, introduced the concept of enantiodromia, which suggests that an excess of something gives rise to its opposite. This idea resonates with the concept of balance and the need to manage both optimism and pessimism. Surprisingly, it is often the optimists who fail to make it out of the short-run problems alive. They succumb to broken hearts when their optimism doesn't align with the reality of the situation. The key is to survive the short-run problems to enjoy long-term growth. It is crucial to realize that both optimism and pessimism have their place and can coexist harmoniously, leading to success in the long run.

Another lesson from history is that everyone sees the world through a different lens, influenced by their experiences and social circles. This lens can create blind spots, leading individuals to reject ideas that challenge their worldview. The desire to believe that we are thinking independently and possess a comprehensive understanding of how things work often blinds us to alternative perspectives. Incentives further exacerbate this phenomenon, causing even smart individuals to embrace and defend ideas that range from goofy to disastrous. Understanding this aspect of human nature is essential when analyzing historical events and their impact.

It is rare for significant events to have a single cause, as the world is a complex and interconnected web of various factors. As Henry Luce, the founder of Time magazine, once said, "Real history is the story of lots of things happening at the same time." To truly comprehend the significance of an event, its long roots must be understood. Events rarely occur in isolation; they have ancestors that contribute to their eventual occurrence. This interconnectedness makes it challenging to assign blame or admiration to a single person or group and highlights the difficulty in drawing specific lessons from major events.

Moreover, the biggest risks are often the ones that catch everyone off guard. These unexpected events instantly shift the world in a new direction and have far-reaching consequences. Surprises leave us vulnerable and shake our beliefs, making us paranoid and pessimistic. Interestingly, the risks we often discuss in the news are rarely the most important risks in hindsight. For example, the surge in car travel after 9/11, as people avoided air travel, resulted in more excess car deaths than casualties from the actual terrorist attacks. This demonstrates the need to reevaluate our perception of risks and prioritize preparedness for the unexpected.

In conclusion, investing and understanding history both require a nuanced approach. Timing is critical in investing, and success lies in finding the balance between optimism and pessimism. History teaches us valuable lessons about human behavior, the interconnectedness of events, and the importance of preparing for the unexpected. To apply these lessons to our own lives, here are three actionable pieces of advice:

• 1. Embrace a growth mindset: Continuously strive to improve and learn from both successes and failures. Be open to new perspectives and challenge your own beliefs to avoid falling into the trap of narrow-mindedness.

• 2. Cultivate empathy: Truly understanding the problems faced by others is key to creating impactful solutions. Empathy allows us to connect with people on a deeper level and develop products and experiences that address their needs.

• 3. Prioritize preparedness: Recognize that the most significant risks are often the ones we least expect. Stay vigilant, anticipate potential challenges, and have contingency plans in place to minimize the impact of unforeseen events.

By incorporating these lessons and taking proactive steps, we can navigate the complex world of investing and draw valuable insights from history to shape a better future.