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August 20, 2011 07:15 pm GMT

Don't Follow The Crowd

WrongEditor's note: Jules Maltz is a General Partner at Institutional Venture Partners (IVP), a late-stage venture capital firm based in Menlo Park. You can follow him on Twitter @julesmaltz.Whenever I'm about to make a new investment, I always think about the 2x2 matrix I learned from Andy Rachleff, a former partner at Benchmark Capital. The idea is that if you make a new venture investment (or start a company), you can either be "right" or "wrong" and you can either be "consensus" (following the crowd) or "non-consensus." Everyone knows that if you're wrong, you're not making any money. But the interesting part of the chart above is that being right and consensus isn't great for your returns either. The big money, as any horse racing handicapper can tell you, comes when you're right and you don't follow the crowd.

Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/t4_-Tt52mD4/

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