April 2024

Binary thinking is a trap that we all fall into. Recently I was asked: “are you technical?” - I hate that question. I honestly didn’t know how to respond. I know what the person was actually asking: do you have a computer science or engineering degree or do you write code? In his mind, if my answer is “no” to those questions (which it is), he’ll immediately believe that I cannot and do not understand how software (or hardware) gets developed and works, what devs and other engineers do on a daily basis, or how “technical” concepts like gradient descent or backpropagation work within deep learning. He’d not know that I taught myself how to write HTML and host websites on Geocities in the 90s, that I studied neuroscience and advanced statistics extensively and see the parallels to neural networks, or that I have worked closely with PMs and Devs to ship product. Thinking in binaries can be a useful heuristic, but does not fully appreciate the nuance or full story of a person, thing, or idea.

Thinking in binaries as an investor (or any decision-maker) is dangerous, and can lead to groupthink and missed opportunities.

“I like fintech, but I don’t invest in consumer apps”

^ probably some VC who turned down a meeting with Zach Perret when he was working on a consumer budgeting app that would later become Plaid

Rex Salisbury of Cambrian recently called out investors, saying: “Fintech VCs need to stop saying they won't invest in lending companies.”

Our society has clearly become increasing polarized, and room for nuance in public discourse is scarce. VCs believe (often rightfully) that the only way to stand out is to be contrarian and spew bold claims on Twitter. I wholeheartedly believe there are other ways of standing out and being a good investor (in the eyes of those you serve: founders and LPs). Understanding there is nuance and gray area in every opportunity and subsequent decision demonstrates you can 1) grapple with complexity and uncertainty and 2) are humble and can admit when you simply don’t know.