one night cop Taking his typical evening walk around the neighborhood. As the sun sets, he strolls slowly down the street, alert for potential dangers. Soon, he stumbles frantically under streetlights, regularly coming across professionally-dressed men who kneel and watch between cracks in the sidewalk.
He desperately offers $100 to passersby to help him find his misplaced keys. Relieved to see law enforcement, he called the police for help and explained that he urgently needed to return to his family. Together they search every nook and cranny of sidewalks, gutters and roads under the light until they are empty. The person they called for help likewise gives up after finding nothing under a streetlight.
Frustrated and disappointed, the police officer finally asked: Are there other places they could be?
The man replied, “Well, I actually lost them in the park across the street, but the light here is better.”
This story encapsulates a concept commonly known as the streetlight effect. Although its origins can be traced back to his 13th-century Turkish fable, the concept has evolved from a joke about people who have lost their keys to a scientific explanation for observer bias, in which the observer only sees what he expects. has been repeated throughout history. The point is that you can spend a lot of time looking for something, but if you’re looking in the wrong place, you’ll never find it.
Unfortunately, in the early days of venture capital, no one told us this story. So I immediately started looking for the easiest deal his flow. It’s Hong Kong. I had a strong personal network and brand in the Hong Kong area, so I had no problem finding a local entrepreneur looking to market Fresco his capital for funding. I spent my days meeting new businesses who were happy to come to my favorite coffee shop on Hollywood Road in Hong Kong. I soon realized that my schedule was very packed, but I was little excited about my future investments.
At the end of each week, I sat and wondered where the time had gone.
You can spend a lot of time looking for something, but if you’re looking in the wrong place, you’ll never find it.
Invest time where the things you are looking for are concentrated
I was spending time meeting with local entrepreneurs, but the strategy was not paying off. In Hong Kong there was clearly a light shining in front of me, but I had a feeling the key was in a park somewhere across the street. I knew I had to stop taking it easy and look at the flow of transactions outside of Hong Kong. Business along with her partners began spending time researching the major hubs of entrepreneurial and tech activity where entrepreneurs seeking funding are concentrated. We also looked for companies that have achieved great success in the last decade (unlike Hong Kong, which is in the early stages of its journey as a startup ecosystem and has not had many successful venture-backed businesses). Then I hit the road.
My partner and I have spent time in cities such as San Francisco, Austin, New York, London, Beijing and Singapore. I spent most of her first five years at Venture her Capital on planes (mostly middle seats in economy class, to be exact). On each business trip, I was energized by the stories of entrepreneurs in each region I visited, and was overwhelmed by the number of promising companies I encountered in each location. My days were just as packed, if not more, than my time at home. However, unlike my experience in Hong Kong, each day of the meeting presented an exciting investment opportunity that I was eager to explore. I had a real deal flow! I had to get on a plane and go get it.
As a new little fund, my budget was tight, so I hung out on friends’ couches and stayed in cheap Airbnbs while traveling. I could never feel like an outsider, especially when it came to navigating the San Francisco Bay Area. Who knew that could swell to hours during rush hour? afternoon? On one trip, I picked a midpoint between meetings and splurged on a cheap motel in Daly City, hoping to cut travel time. Arriving with suitcases, the hotel was across from a junkyard full of nothing but old school desks and the Daly City was affectionately called ‘The Daly Shitty’ by the locals.
When I was on the other side of the investment table, it certainly wasn’t quite what I had originally envisioned, but I was looking for opportunities, trying to find diamonds in the rough and the next big thing. was fun and exhilarating. But we invested a lot of time in developing new sources of deal flow.
