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- Lee Tom Perry
(from PERRY, L.T. The Capital Connection. In: Academy of Management Executive, 1988. Vol II. No. 3. pp. 205-212)
by Miriam Garvi
Of all the research interviews I have done, one particular conversation still stands out in my mind. A serial entrepreneur, founder of a VC company and keynote speaker at many a growth event described himself as an «enlightened despot» whose leadership style was based on a fondness for what he called «doers» - meaning people who would execute strategy. Needless to add that in his world there were clear boundaries between «thinkers» and «doers», between the elite who could read the strategic game and lay out the next move and those who were to implement decisions and report back on their effect.
In other words, any real thinking should only be done by those behind the scenes?
As I was tracing the origins of the venture capital phenomenon, I became aware of how easily something is labeled «the solution», endorsed by those institutions which will give it credibility, and of the strong impact that such labeling will have on business and policies (see chapter 7 in my dissertation).
It is interesting to note how little attention is given to understanding a problem and the real causes of observed symptoms in favour of cure-all remedies. The promotion of microcredits, laureated with a Nobel peace price, illustrates this trend in a different setting.
Are cure-alls becoming the new religion? As long as someone is conveniently labeling the solution no one is asking us to think for ourselves. We are urged to buy into «inconvenient truths» and endorse whatever is promoted as the next panacea for growth, world poverty or for saving the planet.
But if we choose to put our faith in ideas and technologies that are placed on a pedestal, we will inevitably be deceived. Because real solutions demand that we go beyond the symptoms and ask ourselves why a particular choice is important and what goals are fulfilled in the process. There is no easy way out for true progress.
by Miriam Garvi
The other day I read about another initiative in alleviating world poverty. It seems that every new initiative these days involves the diffusion of some kind of golden recipe - as in ‘alleviating poverty through technology’ or technology saves the world. This time, the recipe was microfranchising: “The idea is to replicate sound business models and, consequently, to provide microentrepreneurs in developing countries with training and the necessary assistance for success.”
I could write about how such initiatives reek of a neo-colonialistic attitude where the Westerner knows how money is made and so our models of thinking are imposed on other populations without regard nor appreciation for their cultural settings. But today I will draw the parallel to what is happening in other areas of business life. In my study of venture capital, it became clear that a streamlining way-of-thinking is dominating business thinking today. By streamlining I mean these kinds of ready-made formulas, of ‘best practice’, of ‘business recipes for success’, of ’success factors’ - whatever we choose to call them - which are imposed on new ideas, snuffing the flame. As I wrote in the final pages of my dissertation, “it would be a loss indeed if venture capital [or micro finance for that matter or any other service aimed at promoting new initiatives] would mean the death of visions and ideas that can change our conception of the system. Without them, there would be little new to refine and we might never come to enjoy what we have yet to discover.”
It is time we start thinking about the implications of snuffing out the visionary flame with pre-made, easy-to-replicate business models that are designed with one thing in mind: namely how to streamline a business concept so as to maximize its perceived value on a financial market.
by Miriam Garvi
The other day I was walking around among the glass skyscrapers of Hong Kong.
In business ideals of competition and growth have been put on a pedestal. Markets are redefined so we can claim to be the best or the biggest at something - but what that something is is of little importance as long as we can claim the position. We take great pains to belong to the beautiful people, that exclusive crowd of world citizens who can walk through life in luxurious air-conditioned gallerias with marble flooring where the daily pains of the unfortunate are far from sight. Great image, but what’s our contribution to the world?
Some fifty years ago, venture capital pioneer Georges F. Doriot raised a challenge as he was teaching future business leaders at the Harvard Business School: “Do we want to build or merely enjoy what others ahead of us have made possible? Really, how can one enjoy anything if one is not building for the future of others? Remember that our happiness is in direct proportion to the contributions we make.”
In the era of image, we seem to have forgotten all about legacy - forgotten about the strong imprint that is made when somebody is dedicated to making a difference even when there is no instant pay-off in sight. Such pioneering initiatives inspire us to find our own way of making an enriching contribution.
Image is exclusive and lies in the eyes of the beholder. Legacy is a challenge for each and every one of us and it is there for the taking.
by Miriam Garvi
Here are some favourite anti-quotes (from the dissertation Venture Capital for the Future) taken from the world of venture capital:
«You can be brilliant and have bad products and still succeed.» (CEO of international VC fund).
«Ten years ago, I applied for a job advertised in the newspaper. There were 180 applicants. After four weeks had passed I called the guy at the recruitment agency in order to find out how things were going. He said «Sorry, it didn’t work out.» Why not? «Well, there were so many applications that I split the heap of papers and threw away half of them. I said: they’re unlucky! And who the %&¤& would want to hire somebody with bad luck?» The point is that when we screen who should manage our investment it’s like betting on who we believe will be lucky!» (investment manager).
My question: Is this venture capital or speculation capital? If so, what entrepreneur would like to offer his or her venture up for speculation?