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Greed Will Mark the Turnaround, But Quietly

Posted by Bob Warfield on October 30, 2008

This morning I watched a video of Kleiner Perkins Uber VC John Doerr giving his advice for startups.  It’s good advice, but it left me flat.  Why?  Because there’s nothing new or insightful there.  It is the diary of a very smart and experienced business person who is scared and doesn’t know what will happen next, so they’ve broken out the standard list of prudent measures that smart business people take.

Fred Wilson says the conventional wisdom will be wrong, whether it is fund managers or VC’s talking.  He quotes Max Levchin about the desirability of ignoring everyone and being contrarian in times like these and goes on to say:

Listen to everyone. Read everything you can. And then come to your own conclusions. It is better to be contrarian in times like these. But do it wisely and don’t bet the farm.

I will admit, this sounded to me like the first stirrings of greed, but greed in a good way.  For it is greed and not fear that wil mark the turnaround.  Fear will keep us bottled up and focusing on tactical execution and cash conservation.  That’s what Doerr’s 10 points are.  Greed is about looking for opportunity at this time instead of hunkering down and wishing it would be over.  Only greed can turn around the vastly negative sentiment that grips so many and leads to a self-fulfilling prophecy.

Where fear is concered, as Fred Wilson says, “It’s amazing to see how everyone is saying the same thing.”  I see the same, don’t you?  The advice from all these VC’s so far has been nearly identical, until this piece from Fred.  He is beginning to talk about the smarter move: 

When everyone is doing the same thing, consider doing something different to gain an advantage.

At the same time, do it quietly until you’re sure it’s working.  And don’t bet the farm.

Isn’t it interesting that the real superstars, the Warren Buffets of the world, are not paralyzed with fear?  Buffet has been aggressively buying the most troubled sector, financials, for a little while now.  And now here is Fred Wilson, sitting in the middle of the Big Apple, financial sector meltdown ground zero, making some positive noises.

This turnaround will be led by a little bit of greed and a lot of hope.

What can you do differently?

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