Investing should be the last career in life. It is destined to be very hard to enter this business with a shallow personal intelligence, social experience and business intuition.
The most feared thing in investment is systemic risk, and the same is true for entrepreneurship. The so-called systemic risk means that this kind of risk comes from the outside and cannot be controlled by oneself, but the cause of the risk is one's own misjudgment of the trend, or being too forward-looking, or being too egoistic.
Doing the right thing at the right time is the realm that everyone pursues. However, you never know whether the time you are in and what you are doing are exactly at that point, so conservatism, or relative conservatism, is often a more effective way.
Choosing investing as your career means that you must live your life with conservative values, viewing projects and people on the other side with the lens of a guilty presumption.
When dealing with friends, we must of course be upright and sincere; but in the face of tens of millions of investments and businesses based on their respective positions, interests are the focus of both parties' attention. It is a more important way to distinguish between friends and business. A professional and professional way, because when we face business, we are not a purely personal behavior, no matter whether this matter is operated by you alone, you can only represent the company, and your mistakes or success are all related to the company interests are closely related.
The so-called company, in Drucker's definition, refers to an organization that can create customers. Of course you have to provide the best possible products and services, but behind the scenes is a transaction between rational people. Trading is not hateful, the ass determines the head, and friendship is the lubricant of business, but it is not the key to business transactions.
In the process of business, our biggest confusion is the asymmetry of information. In addition to the situation of the project itself, what is more important is the other party's ideas, that is, the other party's intentions beyond the disclosure of data. This kind of intention, many times you can't get it in a rational way, through research and calculation, it more often comes from what Philip Fisher called "chatting".
Hebkorn defined negotiation as "using a person's information and power comprehensively to influence people's usual behavior and response within the tension of the structural network formed by multiple forces". He believed that the decisive factor in negotiation is information The quantity and accuracy; the second is the control of time, whether he is in a hurry or you are in a hurry; the third is strength, in other words, what kind of aura do you have. A subtle behavior, whether a sentence is appropriate or not, can affect the strength of the aura of both parties. Being neither humble nor overbearing is of course the best way, but many times we always easily write our intentions on our faces. How desperate you are to close the deal, how weak your company is, how little information you have, all these will be revealed in your gestures.
Therefore, because of the asymmetry of information, or because of the lack of ability to perceive information, or the inability to control inner anxiety, we choose to fall in love with each other——to show our admiration without any concealment, and to express our admiration with excessive sincerity. Tell the other party all your information, think about what the other party thinks, and do my best to find and design a solution to the problem for the other party. Of course, you can gain the favor of the other party by doing this, and even if you are lucky, you may get a few confidants who appreciate and love each other. However, many times the result is more --- you burn yourself, just illuminate the other side. Men and women can fall in love, but business is absolutely impossible. Your enthusiasm is often used by the other party, making yourself passive and defeated. "I used to illuminate the moon with my heart, but the moon shines on the ditch"!
The importance of negotiation to investment cannot be overstated no matter how you describe it. The investment target is too huge, and small changes can bring about huge differences, because there is no effective and precise method for value assessment itself, and price changes are purely determined by expectations and the ambiguity of future growth Judgment, and how subjective expectations are, one moment, one event, every bit, can have an impact on expectations.
Such emphasis on the importance of negotiation is not to elevate negotiation to the whole of business, or to deliberately obtain additional benefits from others. The significance of negotiation is that you can protect your own interests in an appropriate way, especially at the moment when the investment industry is too hot. The hot market has given rise to unreasonable expectations from the project side, and capital is already in the embarrassment of a buyer's market. Status, if you still use the current hotness to predict the future value, it is likely to bring disaster to the child. Yes, catastrophe!
In Graham's theory and Buffett's investment practice, apart from treating shares as part of the entire business, the most important point of view is the margin of safety. The basis of the margin of safety is the price. Never evaluate the current price with optimistic future earnings. Safety is the most important philosophy of investment.
The meaning of negotiation is more often not reflected in the price, it is still a necessary means to get things done smoothly. Your opponents are often veterans who have already had 1,000 contract negotiation experience. Their strong point is to observe the situation. Your unreasonable or inappropriate behavior and performance on WeChat longeon will inadvertently convey some wrong information, maybe That was not your original intention, but it gave him unreasonable expectations. When you need to try your best to reverse and explain afterwards, you have been deeply passive. In the end, you're either forced to compromise or blow things up completely.
In the investment process, majors account for up to 30% of the share, and the other 70% are character, education and knowledge. Of course, you have to practice the 30% to the level of proficiency, that is your craft, the basic vocabulary and mediocre skills, but the wonderful poems all depend on the skills outside the poem. A successful investor is a profession that is closer to that of an old doctor of traditional Chinese medicine. Seeing, hearing, and asking are the basic skills. Accurate judgments come from experience. Buffett said that good companies can be smelled, and that is what he meant. The technology has arrived, but the cultivation level is not enough, and you will not be a good investor either.
It seems that no profession has such a close relationship with human nature. Greed and fear cover almost all of human nature. Only in the face of sex and money can people lose control of their desires and lose ground. A qualified investor is a person who can control his own desires, a person who takes conservatism and pessimism as his code of conduct. "Don't be happy with things, don't be sad with yourself", after doing this, don't you look like a saint? Of course, that is the realm of Buffett, Munger and Fisher, but it is a benchmark that we must always look up to deliberately approach. We may not be able to get close to it in our whole life, but at least we must leave some traces of calmness on our faces, at least not leave too many traces of fear and greed, and traces of being tortured by anxiety. Like born from the heart, your expression betrays your heart every moment.
Throughout our lives, we operate trust. Trust is called by the German sociologist Luhmann as a simplification mechanism of social complexity. This is the case in society, and it is even more so among teams. The reason why it is called a team is the premise of trust between each other. If there is no basic mutual trust and mutual dependence based on trust, then the increased communication cost and the friction cost caused by poor communication will bring great harm to the organization. to great harm. Dialogue needs a foundation, values need recognition, knowledge and judgment ability also need basic cognition of each other, and team configuration is also based on a full understanding of each other. Similarly, excessive overestimation or narrow self-cognition can easily lead to trust lost. Because trust comes from the cognition of your consistent behavior, consistent narrowness, and consistent violation of common sense will cause the basis of cognition to deviate.
However, in many cases, the weakening of trust also comes from your miscalculation of the other party's ability. Maybe some things are not the other party's strengths, but you give them reliance for no reason. It was not what he owned, it was your self-righteous illusion. Just like falling in love, it is obviously an ordinary color, but in the eyes of admiration, it is full of spring.
1. "History doesn't crawl, it just jumps"
I am sure that this is an era in which geniuses appear in groups, just like the May Fourth period, like the PC Internet in the late 1990s, like Newton and Leibniz for calculus. That is the last 5 to 10 years. Therefore, the last 5 years will be the best time for entrepreneurship and investment as a promoter of entrepreneurship.
2. In venture capital, following trends is the beginning of disaster
In the second level of high liquidity, you can use the trend and inertia to operate, but in the illiquid venture capital industry, followers of the trend often become cannon fodder or others' successors. Every year, we experience about three to five trends, and no one knows which one will become a classic, and trends can be man-made.
3. Venture capital needs to be guided by conscience
Investment is between science and art, especially venture capital. Facing a start-up team with only a few people and that plausible vision, the reason why you are persuaded is largely not because of logic, but because of trust—based on you The identification with the cognition of the world. Munger said that "successful investment is just a by-product of our carefully planned and focused lifestyle", so character is the core competitiveness of venture capital. I often see some populist investors in the circle of friends, and I feel faintly worried. Because according to Krishnamurti's experience, wherever the level of wisdom is high enough, these messy things no longer exist. The three perspectives are sufficient conditions for entrepreneurs, but necessary conditions for investment. Therefore, Rogers said that outstanding investors should read two kinds of books, one is philosophy and the other is literature.
4. Pessimism is a vision
There is only one philosophy about investment, and that is conservatism. Whether it is Ben Graham, Buffett, or Munger, they are all investment masters who believe in conservatism. It can even be said that all successful investors are conservatism. The basic creed of conservatives is to "admit ignorance and tolerate uncertainty". The business world is also nonlinear and spontaneously ordered. This order can neither be known nor planned, just like Heisenberg's particle uncertainty principle Likewise, you cannot know both the position and the kinetic energy of a particle at the same time. The same is true for investing. Once you make a bet, it is out of your control. Too many factors can affect its direction and speed. Therefore, Buffett’s approach is to find an excellent entrepreneur, and then get out of the way and applaud him. .
5. Investing is an art about time
The time mentioned here is not a matter of timing. Timing is of course very important, "why now?", this is for projects; for venture capital, time is waiting to happen. The essence of venture capital is to plant the seeds of ambition and desire in what you think is the right trend. Therefore, patience is not only a basic skill, but also a quality. On the other hand, investment is also divided into big and small years. Just like Bordeaux wine, the production and taste of wine in different years are also very different. From my own experience, 13 years is a big year for investment, but 15 years may not be. This may have something to do with the concentrated emergence of patterns and technological breakthroughs.
6. Investing is not a one-man battle
In the past two years, the investment threshold has become lower and lower. On the one hand, there is a surge in entrepreneurship, and there are more good targets than before. On the other hand, fund raising is much simpler than before. But the low threshold also means that excellent entrepreneurs have more and more choices. Unless you are a star investor like Xu Xiaoping and Xue Manzi with their own traffic, otherwise, the chance of a good project falling on your head will be reduced. For an excellent investor, the important thing is not your ability to judge (there is not much difference in the ability to judge good projects), but whether you have the opportunity to meet the entrepreneur you like, from this The value of angles, institutions and platforms will only increase, not the other way around.
7. Resources are a curse
No resources, no way to start, too many resources, is a curse. Any entrepreneur who is old or successful, will often show off his resources intentionally or unintentionally, how many connections can help, and how many resources can be imported, but these things just become evidence of his speculative thinking. Innovation often comes from the fringes and flanks, and those resources are often what we need to change and destroy. Innovation and resources are often hostile parties. If resources can promote the progress of this society, then Venezuela, the United Arab Emirates, is the greatest country. Many people are lamenting that the price of oil is not as good as that of Nongfu Spring, and the price of coal is not as good as that of cabbage. How good this is for innovation and entrepreneurship. The world dominated by Li Ka-shing is destined to be unhappy.
The disadvantage of resources is that it is difficult for you to get rid of the mindset and path dependence in the process of accumulating these resources. At least until now, I reject those entrepreneurs who claim to have resources.
8. Perfectionism is the enemy of entrepreneurship
Perfectionism means careful sculpting, repeated scrutiny, just like Jia Dao, wandering under the moon, picking off several stems for "push" or "knock". Entrepreneurship is a war of speed. R&D requires leanness, and entrepreneurship requires decisiveness and strength. There is no right or wrong decision-making. It is better to fail quickly at low cost than to be perfect slowly. Looking back at dozens of investment cases in recent years, the founders of the few with problems are basically the type of slow and perfect.
9. Courage and ambition
Entrepreneurship is the entrepreneur exchanging your courage and ambition for resource support, while investing is nothing more than using your money to stand up for courage and ambition and bless them. Courage and ambition are what angel investors really value. Ambition represents pattern, and courage represents ability. Not only entrepreneurs, investors also need courage and ambition, even more. For entrepreneurs, courage and ambition are what they naturally need, but investors are often more forward-looking and lack courage in the face of seemingly outrageous ideas. The fact that domestic investment institutions collectively missed the PC Internet can be attributed to the overall immaturity of domestic venture capital, but when faced with cases such as Kuaidi Dache and Didi Dache, how many people dared to place an order.
Excellent investors play the role of allocating resources, and to some extent, use capital power to participate in the formulation and revision of social operating rules. Almost every organization advertises that it uses investment to promote social progress, but when it comes to the courage of entrepreneurs, it often has a lot of concerns. Over time, real innovation becomes less and less.
10. What makes you feel a little uncomfortable at the beginning will definitely make you very uncomfortable in the end
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