Consumer VC as Anthropology
Last week, I explained that as a consumer investor I focus on ventures built on emerging cultural phenomena. In response, a friend asked me: “in practice, how do you identify and understand new consumer behavior?”
That’s a very good question and one that I’m still very much in the process of answering. What is for certain is that identifying very nascent behavior isn’t easy, in part because it requires that we step away from our own existence and experiences (see the section on “the world behind my blinders” in my last post).
I’m very much looking for others’ thoughts on this question, but I currently approach it like an anthropologist would. By that, I mean that I try to use research methods (namely, participant observation and “cultural consultants”) and a state of mind (curiosity and empathy) that I believe are equally relevant in anthropology and consumer VC.
Insatiable Curiosity 💡
I don’t know many anthropologists, but I think it’s fair to assume that a deep driver of that calling is genuine and insatiable curiosity.
Similarly, an obsessively inquisitive mind is probably the hallmark of the consumer VC. It’s a fundamental motivation for what we do as a profession and what pushes us to dig deeper into a particular community, category, or behavior.
Curiosity is very powerful. So powerful in fact that if you’re like me, you subscribe to countless newsletters, have joined multiple group chats or Slacks on topics of interests, read books and watch movies non-stop. These data points are enriching, but they can also add many opportunities to get lost in endless and pointless rabbit holes.
We’ve all been there and it’s not pretty:
That said, I’m a big believer in the fact that curiosity can be guided and channeled in highly productive ways. At Secocha, it’s something that we try to institutionalize by doing a number of things.
I’ll mention one here. Every week, we meet specifically so that each one of us can share something new that we’ve learnt over the past week. It could be the content of a newsletter, book, podcast or movie, it could be a product, or it could be a discernible trend that one of us has identified. The point is threefold:
- we recognize in our process that curiosity is critical to our roles;
- we find a productive outlet for everyone’s curiosity and orient each other into promising directions;
- we make sure that everyone on the team knows of developments/trends/ behaviors of which they wouldn’t otherwise be aware given their personal interests and inclinations.
When properly channeled, curiosity pushes us to select an area of particular interest and to dig deep. At that point, research methods and empathy kick in.
Participant Observation 🕵️
Let’s start with participant observation.
Ideally, I like to place myself in a position where I can observe a new behavior first hand. Unlike an anthropologist, I am not able to immerse myself entirely in a community for months at a time and truly live among that community. Nonetheless, taking appropriate time to see participants of a community in action is absolutely necessary to identifying and understanding new cultural phenomena.
Thinking about the emergence of new behavior in connection with the growth of gaming? I can’t become a professional e-sports player, but I can play Fortnite, Roblox, or other emerging games, watch live-streamers on Twitch, meet players on Discord or other platforms, and truly engage with their cultural practices (for example by clipping my highlights and sharing them, or joining a video-game meme group).
That said, even with a good amount of participant observation, it can be difficult for an outsider like me to fully understand what is going on within a community and so the outcome often is:
“Cultural Consultants” 🤝
Enter “Cultural Consultants”. To put it simply, I need the knowledge and understanding of individuals who have special insights into a given culture to overcome culture shocks (see below). In their context, anthropologists call them “cultural consultants”; i.e., insiders of that culture who are willing to share its norms, codes, and subtext. They’re an incredible source of knowledge.
Applied to VC, it could be a relative, a colleague, a friend, someone I reach out to after some participant observation, or even a founder in the space. At Secocha, by design we have assembled a diverse team (in terms of age, gender, interests, education, and backgrounds) specifically because it allows us to learn from each other’s perspectives and have a small roster of in-house “cultural consultants”.
Regardless of who the consultant is: I take a lot of notes.
Going back to the gaming example, our team spent some time with gamers in a couple of age brackets to better understand what they do, what is on their mind, and what products excite them. We are also educated by each and every entrepreneur whom we meet and who are extremely deep into this space.
Empathy 👂
In the process of making observations or during conversations, I try to have as much empathy as I can. Importantly, empathy doesn’t entail losing objectivity or the ability to faithfully describe a behavior. It’s in fact a necessary condition to fully understanding the dynamics of a cultural phenomenon.
Empathy is hard because it involves placing oneself in a stranger’s shoes in a stranger’s land. It involves a culture shock and shouldn’t, therefore, be comfortable. But it’s precisely that discomfort that allows for true understanding and insights.
Dr. Louise Scoz Pasteur de Faria says it well when reflecting on the role of empathy in her ethnological work:
First we feel the cultural shock. We start to see their idiosyncrasies, their weirdness, their strange habits. All of a sudden we start seeing beauty. Kindness. Logic. We start questioning why we think what we think, why we feel what we feel, why we live how we live.
It’s difficult to assess how empathetic I truly am and so I may be missing a lot of things in my observations and conversations. But I hope that empathy is a little bit like memory (and so many other things) — you get better at it the more you practice it.
Wrap-Up
This was obviously a superficial presentation and understanding of research methods in anthropology (and other social sciences for that matter), but I find that they have very real applicability in consumer VC. Memorializing my thoughts on this will definitely help me going forward and hopefully prompt some of you to share tips and advice.
As always, keep the feedback and questions coming 🙏
