What Rehab Is Teaching Me About Making Bad Investments

For as long as I can remember, I have been an enthusiastic participant in sports.  To be clear, I'm not a great athlete (in fact, I'm the only one of the five Flybridge General Partners that wasn't a varsity athlete in college), just good enough to participate passionately and aggressively like the prototypical weekend warrior.  During any of my amateur sports efforts — whether competing in mini-triathlons, tackling hard ski runs, or trying to jump the wake while Water-skiing — I've always enjoyed pushing myself and approaching the task fearlessly.

This week, for reasons that will become clear shortly, I was reflecting on why it is that I am so fearless as a competitor, even as I've gotten older.  I came up with two reasons.  First, I'm not afraid of losing or failing and, second, I'm not afraid of getting hurt.  The former is probably because winning has never my ultimate objective, but rather the fun of competing and the enjoyment of achieving some level of mastery. 

And I've probably never been afraid of getting hurt because I've never gotten hurt.  I've been simply very lucky.  That is, until 6 weeks ago when a collision during a Saturday morning pick-up basketball game caused my ACL tendon to rupture.  My luck ran out.

That's why I'm typing this blog from bed, with my left leg strapped into a continuous motion machine, barely able to propel myself on crutches, and in excruciating pain.

During my recuperation period this week, one question I've been contemplating is – when I'm back to full strength, will I return to sports with the same aggression, or will I have lost some of my fearlessness?

Ironically, it is the identical question I struggle with as an investor.  Vinod Khosla once said it takes 7 years and $30 million in losses to train a venture capitalist.  Although I haven't lost $30 million of my LPs' and partners' money in my 7 years as a VC, I have made my share of bad investments.  When I look back on my struggling deals and do my post-mortem with my partnership (something we do during our annual strategy offsite), I point to the mistakes I made and errors I'll try to correct the next time.

But I think I now appreciate that Vinod's point is something broader than being a good VC requires learning from failure.  It also requires the fearlessness to pick yourself up after failure and take high risks again and again.  Not losing confidence in your ability to judge good people, good opportunities and good markets is the key to transforming those early failures into more consistent successes going forward.  Vinod and other legendary VCs still make their own investment mistakes 20 years later, but they remain fearless in willing to plunge forward to back the next big idea and great entrepreneur. 

With this challenging economic environment, VCs are facing more than their share of failure – and there's more to come.  Let's hope for our industry's sake that we VCs all bounce back with the same spring in our step that I intend to have 6 months from now on the basketball court.

10 thoughts on “What Rehab Is Teaching Me About Making Bad Investments

  1. Drug Addiction Story
    Elizabeth was just 13 years old when she had her first drink – this is a story of her descent into drug addiction. After that first drink, she found she liked the way it made her feel, so she had a couple of more. Before long, she experienced her first time being drunk, and the door had opened.
    This story of drug addiction usually paints a very similar picture from addict to addict. They share many aspects of their stories and they often share tragic endings.
    Elizabeth soon progressed to smoking pot after school, and before long she was using it every day often smoking before school as well. She found it difficult to find enough money to buy her marijuana, so she began taking money from her mother’s purse when she wasn’t looking. It made her feel horrible, so she smoked the pot to help her cope with her guilt.
    Drug addiction is no laughing matter. This isn’t a comedy; it’s more of a dramatic story about losing control once and not being able to regain it back.
    When Elizabeth was 17, a friend offered her some methamphetamine. By this time, she was known as a party girl and wasn’t about to tarnish that image. She snorted the white powder and was transformed. She became more than the life of the party; she became THE party. People wanted to be around her because she was so much fun. She couldn’t believe it took her so long to find this amazing high.
    Have you ever had someone tell you a story you just couldn’t believe? Well when you hear a story about drug addiction, it’s all too true and all too believable. It happens every day.
    At 19, Elizabeth had a baby. She wasn’t sure who the father was, and the baby was born addicted to crack. The doctors knew this and her son was taken from her before she was even released from the hospital. Despondent over this loss, when she did leave, she immediately sought out her dealer and got high.
    The story of drug addiction is painful to read and painful to tell. For those people who are affected by drug addiction, it’s almost excruciating.
    Twenty-one year old Elizabeth was arrested for possession of drugs for the third time in one month. She is put in jail to await trial. The judge orders her into a rehabilitation facility. She attends for the required treatment time and, once home, uses drugs after just two days. At 22, her parents are planning her funeral. She was found in her basement dead from a drug overdose.
    The story of drug addiction is often bleak and depressing. The tale is told over and over again all over the world. It’s sad because it’s preventable. Don’t let you or a loved one be another tragic story of drug addiction.

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  2. you probably had the ACL tear, same time as I did. MY surgery was done on Feb20. surgery is the easy part , its the recovery that takes too long. I am an avid runner and have run marathons. like long distance biking and skiing.
    THe same question arises in my mind too. Will I return to active sports? but to tell you the truth, incidents like these make you a better human being and teach you to take life as it comes.being competitive is one thing, but understanding life is another.its a different spectrum altogether.
    Get Well Soon.

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  3. Hi Jeff, i hope you get better soon, you have an invitation to play some basketball here in Costa Rica.
    Great life size parallel. What about having “rehab” workshops for VC’s and entrepreneurs

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