We are keeping with the theme of Angel investors following yesterday’s post about John Sechrest. I got connected to Angela Jackson through Helga Waage of Mobilitus, a startup from Iceland that is growing at an impressive pace and has an office in Portland, Oregon. Angela brings a decade’s experience placing 30+ angel investments (multiple sectors) and a serial entrepreneur family history to Portland Seed Fund. She has advised hundreds of entrepreneurs and seed‐stage companies across a broad spectrum of industries at AB Jackson Group, and also oversees the Portland State University Business Accelerator, with 25+ resident bio-tech, technology and clean-tech companies. She is current President of the Portland chapter of Keiretsu Forum, the largest angel network in the world, and was Chair of the state’s premier angel investment event, Angel Oregon, in 2010. I am looking forward to hearing her survivability story as an Angel investor and what keeps her doing what she does and also learn about how she got started, or more importantly why she got started as an Angel Investor.
Angela and John, are at the core of building startup communities. There are a bunch of people of Iceland who are doing the same things as what Angela and John do, but they have not followed through in getting the story told. I believe strongly that there are many success stories in Iceland, maybe not Billion $ exits but through Angel and Seed Funding companies reaching a point of self sufficiency where the Entrepreneur has created something of value. There are many local businesses and services that have been around for many decades and they all once were a startup. The city of Reykjavik or Akranes or Akureyri were once startups in their own right.
Coming back to our theme of the conference Building Antifragile Startup Communities, I read a very interesting blog post titled “Antifragile Book Notes” by Taylor Pearson for the “Antifragile” book by Mr. Taleb, who has accepted to be on live broadcast through the Internet during the conference on June 4th provided the technology works and we are able to make the technology work fingers crossed. Anyways, coming back to the book, there are two ideas that falls squarely into Angel investing, Entrepreneurship and Startups, they are:
The Barbell Strategy
A dual attitude of playing it safe in some areas (robust to negative Black Swans) and taking a lot of small risks in others (open to positive Black Swans), hence achieving antifragility. That is extreme risk aversion on one side and extreme risk loving on the other, rather than just the “medium” or the beastly “moderate” risk attitude that in fact is a sucker game
Antifragility is the combination aggressiveness plus paranoia— clip your downside, protect yourself from extreme harm, and let the upside, the positive Black Swans, take care of itself. We saw Seneca’s asymmetry: more upside than downside can come simply from the reduction of extreme downside (emotional harm) rather than improving things in the middle.
An example is Mark Cuban’s investment strategy. He keeps most of his assets in cash (robust, not going to crash with the market) and it allows him to move quickly when he sees large opportunities (anti fragile).
Options, any options, by allowing you more upside than downside, are vectors of antifragility.
If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favorable outcomes when they occur. (The key is that your assessment doesn’t need to be made beforehand, only after the outcome.)
Option = asymmetry + rationality
The mechanism of optionlike trial and error (the fail-fast model), a.k.a. convex tinkering. Low-cost mistakes, with known maximum losses, and large potential payoff (unbounded). A central feature of positive Black Swans.
Central to optionality is Taleb’s assertion that prediction in the modern world is impossible. Instead of trying to predict what is going to happen, position yourself in such a way that you have optionality. That way whatever happens, all you have to do is evaluate it once you have all the information and make a rational decision.
If you have not read the book, I highly recommend it as I have done before many time 🙂
- Learning to Love Volatility: Nassim Nicholas Taleb on the Antifragile (thepppeconomy.com)
- How Iceland Got Its Own Tech Conference (arcticstartup.com)
- Antifragile system design principles (wired.com)
- Getting Stronger through Stress: Making Black Swans Work for You (edgeperspectives.typepad.com)
- Some Angel Data on Investing (hydeparkangels.wordpress.com)
- Tipping The Scales: Women Angel Investing Reaches All-Time High (forbes.com)