Pattern Recognition

Last year I was providing an update about what I do, what I work on, and how I add value to the firm I work for, and my overall job description. In a long winded explanation to my friend Andrew Weissman, he stopped me and clarified what I do in a single phrase; pattern recognition.

This concise explanation of providing value has stuck with me. This means being category, niche, topic, and genre agnostic and combining a number of factors both tangible and not, into how I view companies, individuals, and projects. Since early stage investing means the product or idea changes dramatically over time, having a clear thesis and honed pattern recognition is helpful. I take no credit for this as it was developed and matured over time by Brad, Fred, and Albert and even lives online at the USV Our Focus page. It is an organic and dynamic thesis that has changed, and continues to adapt.

Much like experience, you have to live through certain things to get it, see things from many angles to understand it, and the more real cases you see, the more experience you get. There is no shortcut or way around this fact. I learn more about this process every day from my friend and colleague Andrew Parker. Andrew has honed his own pattern recognition skills that come from his world view. In a clear and concise conversation I can understand how he views a product or service and we can constructively debate the pros and cons. It is helpful not only in building up my own pattern recognition, but also in thinking through and clarifying points I may not have thought about.

When I first joined Union Square Ventures my goal was to optimize the partners time. I now add pattern recognition to the always on optimizations I try to provide.

Phin Barnes is a friend and Principal at First Round Capital, and summarized this value add nicely;

Different from a partner I also try to decide if I think a specific partner will share my view and if together, we can build passion for the business across the investment team. Each week I participate in pitches with the partnership and spend time talking to them about the deals they are reviewing. I dig into the questions they ask and understand each business that they are evaluating and what is driving their point of view on each investment decision. When I read a plan or meet with an entrepreneur, I usually know how each partner will react to the pitch, what areas they will be excited about and the concerns they will have about the model, the market and the team.

Phin goes on to describe junior VC people as gatekeepers, which I agree with. In some ways a junior VC extends the bandwidth of the partners and optimally helps them do more, faster.

The best way for me to separate the signal from the noise is to develop and work on pattern recognition.