Julie Meyer's Philosophy - Build counter-cyclically

"Invest in others' success. Trust your instinct. You know more than you think you do."

"Invest in others' success. Trust your instinct. You know more than you think you do."

Julie Meyer is a well-known figure in VC circles, for her ongoing work at Ariadne Capital with dozens of start-ups, and from her time in the late 1990s as one of the central figures at start-up network First Tuesday. In this one-off opinion piece for silicon.com she explains why the downturn has merely made her see more opportunities... What's the old expression? Don't confuse brains and a bull market? Something roughly along those lines was running through my mind as I set out to put First Tuesday behind me (sadly) in July 2000 and take my vision for 'building Europe.net' to the next level. I would accomplish that by building a new platform, Ariadne Capital. At that stage I realised several things. I had really believed First Tuesday had an unbelievable window of opportunity in the summer and fall of 1999 (one which had closed by January 2000). Sure, it was essential we were properly capitalised, with the right DNA and leadership. Yet most of all I was hamstrung from executing, from being in a position to do what I knew how to do. I knew how to seize the opportunity, and it all boiled down to one thing: I must get out there again - forget that holiday - regardless of whether the market had shifted 180 degrees, to prove my success is market-independent, recession-neutral. I understand where the next curve is. My abilities are not tied to all boats floating on a rising tide. I had to take out a clean sheet of paper - together with business partners with integrity - and get out there and build what I know. A good friend of mine recently sent me a wonderful email explaining she and her future husband were quitting their jobs and moving to Italy to "ride out the recession". I thought for a second about the carefree nature of that, and longed for it for a second. Then I came to my senses as I realised my instincts have always been to build counter-cyclically. My experience has taught me in 13 years of living in Paris and London, since graduating from university, that you must invest and work diligently when others think there is no opportunity. When the markets return, and the masses flood in, the real opportunities will then be gone - but I will be ahead of the game at that point. This is why my schedule these days is super punishing. While others are vacationing in Italy, I'm scared I'm going to miss the next big thing. Call it an obsession. Working for a living can get in the way of having an impact, and making money, and changing the world. The only way to do the latter is to be committed to listening very carefully to what your instinct is telling you. Pay attention to small things which indicate large change is about to happen. Ask seemingly stupid and obvious questions. Invest in others' success. Trust your instinct. You know more than you think you do. Don't assume the guy who is running a £1bn venture fund necessarily knows more than you do. He/she may - or may not. In a similar way, at least to my mind, inefficient markets yield exceptional returns, but you have to be in a position to drive the efficiency to extract the returns. Europe is fundamentally inefficient, and therein lies the opportunity. Why build Europe.net? Because we know Europe is becoming more efficient but it is a 30-year plus project. But I can see the increase in the number of cross-border transactions, the more mobile workforce, the change in attitudes, the rising number of new economy networks across the continent since I arrived in London four years ago. And of course there's the new currency. I convinced the 100+ individuals who built the First Tuesday network with me in the summer of 1999 that "trust is efficient". I looked them in the eye and promised that if anyone made any money out of First Tuesday, we would all make money. Trust is efficient I overestimated my abilities to get all shareholders buying in to that promise. While First Tuesday did a huge amount to make Europe more efficient, I wasn't able to prove the business model of First Tuesday, only the cause which lifted its wings for a while. But great businesses use the efficiency of trust, whether directly or indirectly. It's not soft. It's good business. There's no mystery when you see an outstanding success story that defies all the odds. Take a look at Xansa. Listen to its leadership. You can hear the cadence of smart businesspeople who created the conditions of trust to maximize their best asset - their people. In return, they created a billion-dollar corporation. Anyone who thinks the outsourcing of IT to India is a new idea need only recognise Xansa saw this opportunity in 1978. They knew that there was an arbitrage opportunity and pursued it, to great effect. Trust is efficient. Leadership is about creating the conditions of trust. And the combination of building counter-cyclically, learning to listen to yourself, seeking out inefficient markets and investing in the success of others, leads to businesses that are both valuable and sustainable. Why do I keep on going? As a friend of mine says, that dog hunts. ** Julie Meyer is known as a founder and chief marketing officer of worldwide networking organisation First Tuesday, and is now CEO of Ariadne Capital. She has 14 years of combined venture capital investing, start-up operating and consulting experience.