Watch the Adaptation

I guess it is one of the most natural characteristics of human consciousness that we oscillate between imagination and reason. It is often said that wisdom it to be found not in the emotional or rational but rather, somewhere in between.

Respecting social distancing has not precluded an occasional solitary stroll and one thing that seems to be cropping up in my awareness is what is happening at the natural level. Whether birdsong is simply louder as a function of isolation or in fact the clarion call of a natural world that is enjoying the peace of a dehumanised ecosystem is not as important as the simple fact that something just feels different.

When I watched the news of some goats finding themselves into an inner city environment, I, perhaps like many, smiled. Natural adaption. If you look closely enough you will see the darker side of it as well as nature’s food chain, which in part has become reliant on its human cousin looks to more primeval ways of sustenance. Swans seem a little less serene on lakes.

As a Venture Capitalist, I have become more than familiar with adaptation. We just tend to use different words. Being agile and pivoting is in reality no more than a constant and necessary process of evolution. Innovation and evolution have aligned with the pace of change.

That economic historians will look back and may signal Adam Neumann ill fated real estate project as the peak of irrational exuberance is almost a certainty. But dont lose sight of the fact that, quite simply, we have done it again. We are not especially good learners as a species. After all, while not an economist, why should it simply be accepted that an economic cycle has an average duration of 7 years from boom to bust, or in this case 11+ years. It is a function of a broken system based around a monetary policy system which no longer has merit.

I love what I do. I get to meet some incredible people, hear both extraordinary ideas and often wildly misaligned expectations, and have to manage success and failure with equanimity. The compression of time that technology has brought about means that adapting an equanimous state is perhaps the most important human developmental requirement in our history. Some might simply call it humility.

So, adaptation and humility. Most of us are being forced to do the former, but I wonder to what extent we will be able to embrace the second as we navigate the Universal lifeboat. That the world of risk capital has seen a dramatic shift is now so well documented that I choose not to labour the points around valuation clips and longer runway. The expectation misalignment of a bottomless source of capital has evaporated to be replaced by the simple question as to when one might be able to breakeven.

The swingometer has gone completely the other way as fear is the universal currency right now, and likely to remain so, for a few months yet. One thing can be sure, the shift will not be permanent, it never is. My only hope is that when risk appetite returns it is both proportionate to the long term outlook that venture was established for and is allocated to those areas of the economy that need it most. It will be interesting to see what percentage of LP’s consider an uptick in healthcare allocations, and equally how fund structures evolve to embrace more fully the notion of patient capital.

I have been involved as a human for 49 years. I have been involved in the technology sector for 27 of those years. What binds those two comments is the observable truth that our adaptation is, in my experience, insufficiently tuned to prevent the inexorable paradigm of boom/bust. Dont be fooled that C19 is to blame. A trigger for sure, but in the same way we indulged excess on the upslope it will force us to embrace its sister humility on the down. Nobody is to blame for C19 but many will be forced to take responsibility for its consequences. It should not be forgotten that, in economic terms, it probably represents a crystallisation event for a previously teetering global economy.

We have been humbled. In a terrifying way, Adapt or, well, something else. Thankfully we dont have to do this alone, and I remain confident in the innate essence of human compassion to see us through these most surreal of times. When we surface, all I hope is that we are minded to remain humble.

I can be contacted on LinkedIn or through the contact page on the Izy Capital site


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